- Agree (48%)
- Disagree (48%)
- Not sure (5%)
Our latest poll may divide opinion.
We’re not seeking your view about whether it’s feasible to charge fees for risk advice. Rather – as recently advocated by Marc Bineham – we’re asking whether you think it’s feasible for risk specialist practices to adjust their business proposition to include a fee element within the scope of the services they have the capacity to deliver (see: New Opportunities for Risk Advisers?).
The thread of Bineham’s position is informed by his own experience as an adviser of many years, and more recently as a business coach.
Given the proviso to this conversation is that the risk specialist practice counts pre-retirees among its clients, Bineham’s message – one where he has ‘walked the talk’ during his successful advice career – is that there exist great opportunities to deliver ancillary fee-based services to the parents and children of pre-retiree phase clients, all of which are a natural consequence – a natural ‘next step’ – of the value already being provided by the adviser to their pre-retiree client.
As we’ve suggested, opinion may be divided on this proposition, but either way, we welcome your thoughts, and will report back next week…
This article has carefully selected a debate around advice fees to be charged to “pre-retirees”
That’s not the debate. The debate is will an under-50 mum and dad couple, on good incomes, with a large mortgage, kids in private schools, faced with an outlay of $3,000 to $5000 per annum for a top-quality life risk program, agree to pay fees commensurate with the quality of the strategy and the advice. My experience, and I suspect it’s the same for most advisers in the mum and dad market, is that I usually experience resistance at any fee over $900, regardless of any savings that may be available in a commission-less sale. And as we all know, we only need a case to go bad in underwriting terms and take ages to complete to completely erode away any advice fee for which we may have prior agreement.
Some advocates of fees-only life risk advice suggest the way out of this morass is to be able to demonstrate value, without actually defining “value” in a life risk sale environment. There are all sorts of ways to demonstrate value after establishing what exactly the client wants to do, but there remains the hard fact: demonstrating value, for a life event that may never occur, and which has a significantly increasing premium cost every year, is a hard sell. And most of us are honing our soft skills as we speak .
Of course if the fee was tax-deductible, that would be different. But every year Treasury finds a reason not to have financial advice fees as a fully tax-deductible expense, purely because it will result in the loss of input to Consolidated revenue.
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