Clients are willing to pay more when they feel they are receiving good value for their money. According to ThinkAdvisor below are the top ten reasons advisors are worth their fees.
1. A Person Answers the Phone
Rather than an automated voice message, when clients call you or your assistant answer. Under normal circumstances during business hours, the call is answered by a live person who knows the client and speaks with them respectfully.
2. Advisors Can Help Clients Find the Most Efficient Strategy for Charitable Giving
Advisors can assist with ideas for remembering the charity in their client's will or naming them as a retirement plan beneficiary. For example, writing a check is often not the best way to go. Donating appreciated securities enables clients to skip paying tax on some capital gains.
3. Advisors Can Recommend a Good Accountant
Although advisors are not allowed to give tax advice, they can recommend many CPAs.
4. Advisors Can Advise Them on Refinancing Their Vacation Home
Advisors understand the client's financial situation as well as their client's. Your firm may be affiliated with a bank or have a lending arm. You can act as the intermediary, smoothing the journey for your clients.
5. Advisors Can Help Clients Find Excellent Lawyers
Advisors have met several lawyers over the years, in different areas of expertise. If your client needs estate planning or other matters, you can suggest a few for them to interview, choosing the best fit.
6. Advisors Know How To Access Cash at Competitive Rates
Advisor firms likely offer home equity loans and asset-based lending. The rates are often far lower.
7. Advisors can recommend a good insurance agent
Advisors know several insurance agents. They may be able to get better prices after receiving a recommendation from an advisor.
8. Advisors can help clients with refinancing their rental property.
Because advisors can see the big picture, refinancing rental property is an area of client needs that requires attention. Advisors have access to their firm's mortgage specialists which gives them an advantage when assisting their clients.
9. Advisors Can Advise Their Clients' Friends
Advisor's client may have relatives who need help with saving money. Advisors can assist with simple financial planning advice, show them how to pay themselves first, and get their debt under control. Clients feel they helped their relative because you were in the picture.
10. Advisors Can Assist With Investing on Behalf of Client's Nonprofit
Upon learning a client has a foundation or a scholarship fund, advisors show them how money can be managed for long-term return, consistent with the restrictions in their bylaws.
How RIAs Defend Their Territory Through Service Expansion
While many advisors are extending services to clients that justify their fees, others are expanding their service offerings to combat value differentiation concerns and capture emerging opportunities.
Registered Investment Advisors (RIAs) are currently considering whether to extend their service offerings to increase their influence with clients. According to Cerulli Associates, "an industrywide shift away from brokerage, broader adoption of financial planning and popularity of independent business models are merging to break down the RIA channel's main differentiating factors." More broker-dealers are developing independent affiliation options, promoting financial planning, and increasing opportunities for advisors to conduct fee-based or fee-only businesses.
According to the research, 93 percent of advisors across all channels expect to generate at least half of their revenue from advisory fees by 2023. This is causing broker-dealers to introduce independent, fee-based businesses centered on financial planning, which has been viewed as largely unique to the RIA channels.
Over the next two years, the top areas of service are expansion trust services, digital advice platforms, and concierge/lifestyle services. To implement additional services, RIAs will need to reinvest in business through hiring, technology, marketing materials, or paying a third-party provider for outsourced support.
Cerulli Associates suggest that advisors either adjust their fees upward or implement alternative pricing structures to preserve profitability levels as they add services. These nontraditional fees can help RIAs offset increased costs of added services. RIAs should consider consulting strategic partners, such as RIA custodians, assets managers, and service providers. Strategic partners can help RIA navigate its choices, weigh the tradeoffs of expansion, and mitigate risks.
Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.
