Looking towards a future fee for service environment, practice consulting firm, Business Health, has outlined an eight-step process for advisers and advice practices to assist in reviewing the current range of advice services they offer.
According to Business Health in its most recent newsletter to advisers, there are two key points regarding the implementation of a fee for service model:
- How do you introduce it into your practice?
- If you already operate with a fee structure, how do you ensure it is fair for both the client and the practice?
In outlining the eight-step review process that address these questions, Business Health says the process principles remain the same, irrespective of whether the adviser operates within a risk-only specialist business, a pure financial planning firm or a holistic advisory practice.
While Business Health will be outlining these principles in more detail, the eight steps involve:
- Seek feedback in a structured, objective manner
- Revisit your value proposition (a ‘plain English’, high level articulation of what you do for your clients)
- Decide who your offer appeals to best (what do your best clients look like)
- Critically analyze your offer (what are the actual services you deliver to each of your client segments)
- Compare 4 and 3 (are you satisfied there is appropriate alignment)
- Understand your numbers (calculate what it costs to deliver each of your services and set your “fee” accordingly)
- Reinforce your offer at every opportunity (how well do you think you and your staff articulate the value you add)
- It is not set and forget (you need to regularly review your offer)
In discussing the underlying processes involved in these eight steps, Business Health Principal, Terry Bell, pointed out to riskinfo that while they apply very much to advice practices transitioning to, or re-evaluating their fee for service proposition, they equally apply to those specialist risk advisers who operate on a commission basis and believe they will continue to do so in future.
Business Health will be exploring each of these eight steps in forthcoming editions of its newsletters.
