What are these fees?

The only constant in the financial industry is change. Adapting to change is the second constant. With the regulatory changes and CRM2 in Canada, investors in the future, will see the cost of advice and fees in dollar terms on their statements. You may not be there to take all of the calls, questions and emails regarding fees and cost. You will need to have a well scripted process to explain fees, and the value people receive. But what if the client asks one of your team members, or staff? How will they answer the question “What are these fees and how does it work?” More importantly, what can your staff say, under your regulatory and compliance guidelines? I would encourage you to check with your branch manager and firm on what your staff and team members can say and have a process to handle this issue, as it is sure to come up in the next few years. What you do not want to happen, is years of work resulting in a surprise transfer out of clients because of your staff answering the question in an incomplete manner and not understanding fees, total transparency or your value proposition process.

Is it in dollar terms or percentages?
Financial advisors have had fee and cost disclosure discussions with their clients. Have these discussions been in dollar terms or percentage terms? If it is in percentage terms, you may want to consider implementing a new discussion in relative dollar terms. The new statements are in dollar terms and people might have questions when it is a new kind of statement and report that they will be receiving. Have your process down to discussing in dollar terms and go through the list of people you have had the discussion with, so that your staff know they have had the discussion. Make sure you have also had the discussion with your staff so they understand what clients will be seeing and help them understand the issues, questions and new statements will be critical to your processes in the future. We know from practice management research that firms with a regular staff training program do better than advisors who do not train staff. The typical advisor spends less than 10 hours per year training staff. How many hours this year have you invested in staff training?

Train your staff
Over the past several months, there has been a tremendous focus for firms to prepare advisors for the changes coming to the Canadian financial services industry and CRM2. Firms have put on workshops, including several I have run for financial firms on preparing for the future. Have you brought your staff to those workshops to give them a better understanding of the changes and how to help prepare them? Do you have a script or process to discuss the changes with your clients, and do the staff understand the scripts? For example, when a client asks “How do the fees work?” do you wing the conversation, or do you have a scripted process to discuss fees and your clear value proposition in what the client will receive? What can or do your staff say? Do they have a script, cleared by your branch manager and compliance?

It is about the value I receive.
Remember to train your staff on the process of delivering your value for the fees and cost of advice. Do your staff know your value proposition? Can they articulate it clearly? Do you have it in writing? Do you follow a process? If the answer is no, how will they answer the question, “how do these fees work?” when you are not there? It is the advisors task to answer these questions, and train your staff to refer the answers to your advisor. Create a script for your staff to refer this to you, and let them know, if and when the client has gone through the value proposition process.


1 million Quality Financial Plans
Finally, I attended a three day workshop in Atlanta by Bill Bachrach of Bachrach and Associates David Bach and Kevin Knull, President of Money Guide Pro The workshop was inspiring and they inspired me to create a new goal for my practice management business, which is “ Helping Financial Advisors take action, to create 100 quality financial plans for their clients”. My mission if you choose to accept it is “ To help advisors to create 1 million quality financial plans for people”. Let me know if I can help you.