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Being compensated fairly for my services?

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Jun 8, 2009 7:12 am

Hey folks,

I’m a newcomer to the forum and somewhat new to the industry in general.  I am wanting your help because I am having trouble determining a fair fee to charge my clients for my time.

I am a Series 7/66 rep, own my firm (indy), and run my securities business through an indy broker dealer.  This b/d supports both commission and fee based business.  My focus is in retirement planning for seniors age 50-75; I help my clients with increasing income (if they need it), reducing taxes, assessing risk tolerance, and help them transfer their estate to their kids/grandkids as a legacy. 

I advertise mostly through dinner seminars that I run and through referrals.  However, lately, I’ve been getting a good group of folks either by referral or via my speaking events that don’t have many assets accumulated (yet).  Many of them also are uninsurable - can’t get life or LTCi.

The clients book appointments with me because they want professional financial planning.  They know they’re in bad shape, but still work, and don’t mind working longer in order to accumulate assets.  Because they have no assets or insurance business, I cannot earn a commission with these clients to compensate myself fairly and pay for the rent, etc.

My service to them as a financial planner is to develop a retirement budget, open basic qualified plans for them to stash their leftover monthly income, and to create a customized written plan that they can follow over the next 10-15 years.  This plan takes alot of my time, energy, and I put alot of effort into it. 

My standard hourly rate is $150 an hour, but I’m trying to see if I can charge a flat fee for these financial plans, that is fair to the client, but also is fair for my time (and makes it WORTH my time).  Other financial planners in my area charge anywhere from “free” (meaning they will do the plan if they can implement it, thus earning a commission) and up to $4500 per proposal/plan.

My hesitation with starting to charge a fee for my advice to these low-asset folks is that many of them merely don’t like to pay fees (for anything; they are cheap).  How exactly does a financial planner position up front advisory fees in my position with cheap prospects??  I don’t want to turn away new business because they are “afraid” of paying my fee and getting little in return, but at the same time I cannot afford to keep doing free financial plans and collecting a $50 commission off of a $1000 opening deposit in a Bond Fund held in a Roth IRA.

Jun 8, 2009 12:13 pm

My hesitation with starting to charge a fee for my advice to these low-asset folks is that many of them merely don’t like to pay fees (for anything; they are cheap). 

  Read what you wrote. 
Jun 8, 2009 1:03 pm

You are obviously not qualifying sufficiently during your seminars, if thats where these people are coming from. During the close for action, you need to be much more explicit about exactly who can benefit from your service, and who cannot, since you cannot work for free and stay in business.

If you still get push back on paying for help, stay firm, remind them there is no such thing as a free lunch and ask them how their approach of not hiring someone to help them has worked for them so far, or ask them if they know what the definition of insanity is (the old line about doing the same thing and expecting different results). If you qualified people earlier, or at least were very upfront with the profile of who you typically work with, this would not be happening on a regular basis.

Ultimately, this is YOUR problem, not these non-prospects. Unless you (1) qualify better, and (2) are convinced that you cannot afford to give away your hard earned expertise and/or time, you will struggle every time someone wants something for nothing. You can’t save everyone.

Physician, heal thyself.

Jun 8, 2009 1:06 pm


Why would you worry about it?  If what you are saying is true, you would not really be turning away business (since they have no assets and don't want to pay for a plan).  I'm sort of confused.    On a separate topic, why don't you better qualify your seminar attendees?  When you send invites, say "for those with 250K or more in assets" or similar lingo.
Jun 8, 2009 1:11 pm

TRIP - PM me and I’ll give you my fee structure. You can take it or leave it. Which is what I tell clients who balk at paying the fees.

As long as they have decent cash flow, you can help them. They just have to be willing to pay. If not, tell them to take a walk.

Jun 9, 2009 2:09 am

I think all the responses to your post are saying the same thing, which is dead on…you need to find qualified prospects. Dont waste your time on people who you clearly recognize as “cheap”, or in Advisor language, do not have the ability to recognize value and are not willing to pay for it if they do.

Jun 9, 2009 4:08 am

This is really pretty simple-

1.)  You do not have sufficient expertise and experience to expect to be paid a planning fee.

2.)  You have sufficient expertise and experience, but do not communicate the value you can deliver in an effective manner.

3.)  If you are confident you are good on 1) and 2), then these folks you are talking to simply are not prospects.  If they don’t want to pay the fee, tell them to go find a rookie or a Primerica guy and get a “free financial plan”, and let you know how that works out down the road.

Jun 16, 2009 4:03 am

Jul 1, 2009 11:41 pm

go to an attorney for an hour.  watch how they do it. be sure you ask them if this is the same rate for all clients.  answer will be yes.  it won’t be cheap. and he can do it with a straight face. why? because he’s a professional.  The lesson will cost you anywhere from $200 - $500 but you will learn a very important lesson.