How to undo fee discounts

By Bryce Sanders | January 6, 2014 | Last updated on September 21, 2023
3 min read

All clients aren’t equal. Some get discounts while others pay full price. With the Dow Jones leaping to new highs it’s a good time to sit down with clients and discuss future pricing.

Common reasons for giving discounts include:

  • Competition – Clients shopped around. They’re convinced everyone provides a similar service and expect commoditized pricing. You granted a generous discount to win the business.

Read: 3 tips to explain compensation

  • Inheritance – An advisor left the firm and your manager reassigned a great account. The client was given a discount by the previous advisor. She understands she’s being reassigned, but you’re reluctant to change pricing in the first conversation. You “grandfather” the discount.
  • The blabbermouth – A very good client refers a friend. He makes the case why the friend should do business with you. He also told his friend he gets a great discount and you would extend the same courtesy to her. You agree because it’s found business.
  • We’re all in this together – When the Dow Jones declined from 14,164 to about 6,500 your client was anxious and called often. You knew how she felt because of the carnage in your own portfolio. You decided to discount her managed money fees, thinking you shouldn’t be benefiting when she was suffering.
  • Aggressive retention – A colleague leaves the firm to join a competitor and is asking previous clients to follow. You were reassigned a large account and offered a substantial discount to retain the assets.
  • Firm directive – Years ago senior management implemented a strategy to gather assets in low-cost investments or through aggressive initial discounting. Once in house advisors would get to know the clients and introduce other products consistent with their needs. You aggressively discounted to bring assets in.
  • The reader – A client walks into your office waving a magazine article that says he could get a discount just by asking. He was respectful and polite so you agreed.
  • The unknown quantity – Years ago you were new to the business and your prospect was aware of this. He was hesitant to become your client, citing the experience factor. To sweeten the deal you offered a discount.
  • Friends and family – Some people bring a smile to your face. They don’t ask for special treatment. We feel we should do something special for family members. You establish a family and friends pricing policy.


If you give discounts it’s likely you have clients in several of these categories. Some might be off limits: they get a discount and you have no plans to change.

Read: How to frame fees

Others might demand a high level of service and attention while paying extremely low fees, reducing your revenue to almost nothing. You still bear some responsibility for the consequences and should be compensated accordingly.

Consider discussing several points, based on the circumstances:

  • Experience If he balked about your minimal time in the business or assumed everyone provides the same service, discuss his investment successes and the attention and planning you’ve provided.
  • Climate “That was then, this is now.” If you discounted when times were bad, the climate has changed for the better. Time to revert to the firm’s posted pricing.
  • Credentials Have you earned additional professional certifications? Specialists are usually paid more than generalists.
  • Costs What costs do you incur running your business? Does the client benefit? Have these costs risen?

Read: Worry about value, not fees

Bryce Sanders

Bryce Sanders is President of Perceptive Business Solutions Inc. in New Hope, PA. His book “Captivating the Wealthy Investor” is available on