Discuss your services

You offer clients a variety of services, including investment advice, as well as tax and estate planning. But have you ever wondered which services they like the most and might even pay more for?

Here’s a break down.

  • Cash flow planning and debt management: Clients are willing to pay anywhere from $1,000 to $1,500 for services that include a cash flow plan to help them meet specific goals, says Marie DeLauretis, a CFP and financial divorce specialist at DeLauretis Wealth Management in Calgary.

    “But some advisors will waive those fees if a certain amount of assets, for example $200,000, is brought over,” she says.

  • Read: Canadians are world’s most active investors

    Divorce advice: Clients going through a divorce or separation appreciate your financial counsel. Plus your fees are usually less than what lawyers charge, says DeLauretis, who adds this service doesn’t replace legal advice.

    If you’re like DeLauretis and have a certified management accountant on the team, then you can “ask for retainers of $1,000-plus, depending on what type of expertise the client requires,” she says. “But if they only need one meeting, then you can charge by the hour—about $150 to $250.”

    Read: Advise common-law clients to plan for split

  • Actual documents: Clients perceive more value when they physically receive something, like a printed estate plan or cash-flow guide for retirement “that they can take away and refer back to,” says Paige Maclean, vice president, associate portfolio manager at Macquarie Private Wealth in Markham, Ont.
  • Estate and tax planning: Almost a quarter of clients— 23%—would pay you extra to do their estate planning, finds Advisor Group’s 2013 Salary Survey. The same percentage say they’d pay for tax filing. Yet only 21% and 14% of clients, respectively, say their advisors provide these services (see “Bring value with tax and estate planning,” below).

Maclean suggests advisors partner with the client’s existing accountant. “If we can work on the client’s behalf together, with his permission, it can add a lot of value. It keeps the client out of the high-level detail he may not understand, but gets an end result that works for him.”

As for estate planning, DeLauretis says clients usually only see the value after you explain it. “At first, they think it’s just about preparing the will, not realizing that pre-estate documents such as the enduring power of attorney, personal directive and family contracts are also necessary. Especially with blended families, people are blindsided by the complications that could arise.”

For instance, say the client’s a single mother with a business. Without a proper will, the children’s estranged biological father could get her business and other assets, as well as become guardian of the kids. She may not want that outcome.

Read: Upcoming estate law changes

  • Charitable giving or social investing: This is popular with Gen Y, says Shannon Lee Simmons, financial planner and consultant at The New School of Finance in Toronto.

    “What’s important to them is [the environment], and I’ve noticed this especially over the last five years,” she says. “They’re interested in learning about what their options are aside from ethical mutual funds.”

    She adds this can include “charitable donations, which are good for tax savings, or social impact bonds, which make them feel good about what they do with their money.”

    Simmons adds that clients interested in learning about ethical investments are often willing to pay a one-time fee between $100 and $200 to get information about the different types of products.

  • Investment planning: Wealthy clients see the value in paying 1% of their total assets for discretionary services. “They either have no interest in doing it themselves, or they’re worried about making the wrong choices, so they want someone to do it for them,” says Simmons.

    Most advisors require clients to have $250,000 in investable assets to make that 1% fee profitable.

  • Education: Simmons hosts quarterly seminars on investing, insurance products and debt management. She charges $25 to $30 per head and sessions are held in her office boardroom.

    She caps attendees at 20 to keep the event focused and ensure there’s time for Q&A. Simmons says her events usually sell out.

Bring value with tax and estate planning

Sybil Verch, a member of our Salary Survey roundtable and a vice president at Raymond James in Victoria, explains how she shows clients she’s worth what they pay her:

“One of my clients is in a fee-based account, and her husband was terminally ill. We met in mid-December, when he had only weeks to live. [From my questions,] I discovered a lot of the beneficiaries were in the United States, and that she was actually his second wife. Despite not being an accountant or lawyer, which I clearly disclosed, I said, “Here are some things to think about, and you should review them with your accountant and lawyer.” I suggested they sell some of his poor-performing assets in the current calendar year to trigger losses for that tax year [since they’d had high incomes].

“If he survived past the New Year, everything else could be sold as a gain in a new tax year—at a lower tax bracket because he was no longer working—and he could gift a bunch of his assets while still alive and avoid probate. Bottom line: I saved them about $100,000 in legal and probate fees, which is about five times what they pay me per year. They saw the value of my advice in an actual number, and my client never objected again at what I charge for portfolio management. She understands it also includes advice.

“In an annual meeting, we remind clients of what fees they’re paying, and also of all the things we’ve done for them year round. You need to spell out how that benefits them because they don’t know what you do day-to-day.”

Suzanne Sharma is the associate editor of Advisor Group.

Originally published in Advisor's Edge

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