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Michael Kitces #FASuccess Podcast: The True Value of Financial Advice with Jim Stackpool

It's actually a problem if too many clients say yes to your advisory fee pricing. Jim Stackpool explains.

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Welcome back to the 110th episode of Financial Advisor Success Podcast!

My guest on today’s podcast is Jim Stackpool. Jim is the founder of Certainty Advice Group, a practice management consulting firm for financial advisors based in Australia. What’s unique about Jim, though, is his particular focus on how to price and demonstrate the value proposition of what he calls non-product-based financial advice, which is increasingly relevant as fiduciary regulation continues to crop up both here in the U.S. and especially in Australia.

In this episode, we talk in depth about how to think about the true value of financial advice. How the expert value of the advisor themselves should be distinct from the products we implement, just as every surgeon uses a scalpel, but the value of the surgeon is not measured in scalpels, why the value of advice is not merely tied to a goals-based conversation but must tie to their real-world complexities, and why in the end we should focus more on the enduring value or what Jim calls the profound value of financial advice that can have material life-changing impacts for clients.

We also talk about how to know whether your advisory services are currently priced appropriately. Why it’s actually a problem if you get too many people saying yes to your advisory fee pricing, how even on renewal you should consider raising advisory fees to elevate the business and the work it does with clients, even if you lose a few along the way, and why the AUM model does perhaps have it easier than other pricing models, since fees tend to naturally lift with the growth of the markets, but even under the AUM model, it’s still necessary to be reinvesting into your own value proposition of clients or eventually, your fees will naturally drift so high that clients may no longer be willing to pay them.

And be certain to listen to the end, where Jim shares some perspective on the fiduciary regulation changes underway in Australia, where regulators have been even more aggressive in calling out the financial services industry’s worst practices in what may culminate in a total breakup of Australia’s wirehouse equivalents and a rapid explosion of the Australian independent advisor, akin to the IBD and RIA movements here in the U.S., which raises interesting questions about whether U.S. regulators may also someday become similarly aggressive towards the vertically integrated product distribution model here too.

So whether you’re interested in what Australia’s sweeping regulatory changes mean for their advice industry, ways in which advisory firms can provide more value to their clients, or how the industry might evolve in the coming decade, then we hope you enjoy this episode of the Financial Advisor Success podcast.

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