There has been a lot of talk in the “pinks” recently about the pros and cons of charging for advice, whether or not that advice results in a sale. Looking at the comments on a recent article on this subject some advisers seem to have very fixed opinions on this subject and get very touchy if their “sacred cow” is attacked.


This is not really a new argument. Many years ago there was a clear polarisation in our industry into those who felt we could best help our clients by selling them appropriate products and those who felt the very word “sale” was beneath them. The reality though, whether we like it or not, is that we are all selling – even if what we are selling is not a product. When we take on a new client we are selling them ourselves and our business. We are selling what we can do to put them in a better position.


My own view is that the world in which we practise our profession has changed quite dramatically. If we have not changed with it, our business is in danger of dying. I am not simply talking about RDR here. I am sure we have all changed to meet the new requirements this year, and those who have not can no doubt expect a rather unpleasant visit from the FCA! But in my experience there are still many advisers whose thinking process is unchanged even though they now have an RDR-compliant business model. That thinking process so often includes an assessment of the “client agreed remuneration” which is still, in the adviser’s mind, the commission a product provider will pay.


We have to provide our clients with good value. If we do, in my experience, most clients are prepared to pay us what the service we provide is truly worth. This is particularly the case when those clients are business people, as are all of the prospects we introduce to the financial advisers who use our appointment making service.


But providing proper value must take into account what it is our clients are actually looking for, not just what we think they need. It would be very easy to lose a sale by recommending the best product in the world for a client’s needs, without first listening to what it is that client wants from us! My own experience is that a key element of a sales interview is being able to extract the right information very quickly from a prospective client which will allow me to show that prospect what it is I can do to help him and why I should become an invaluable member of his adviser team. When I am doing that I am responding to what my intuition and experience is telling me that client wants, as well as what I know he needs. Rarely do I then find a client is unwilling to pay my fee.


Only last week I was presented with pretty solid proof that too many advisers still think “old style” and have not adapted to our new business environment. My appointment making service found a managing director who wanted to set up a pension scheme for his staff. The adviser for whom we were working refused to meet with this prospective client because he did not believe he could earn enough by setting up a new pension scheme. He was not prepared to meet with the director to see whether the company would pay an appropriate fee for the advice. Given the company particularly wanted this pension scheme I think it most likely they would have been very happy to pay whatever was necessary. But this adviser was adamant he does not set up new pension schemes.


I thought this must just be the peculiarity of one adviser. Surely most advisers would be very happy to meet with a business prospect who was not only open-minded enough to meet with them (as are all the directors we introduce to advisers) but also had an immediate need for a financial services product! So I instructed my team to contact a number of other IFAs in the same area and offer them this meeting. Each gave us the same answer: “We cannot earn enough by setting up a pension scheme”.


Hopefully you and your practice do not fall into this camp. Hopefully you always respond enthusiastically to new earnings opportunities and can quickly work out how to ensure your practice earns enough from them to make it worthwhile proceeding. I strongly believe this is the skill we all need in this new world, and we are in great danger of becoming a dying breed unless we brush up on this skill very rapidly.