Clients want advice, so why won’t they pay for it?

There was a lot in our latest Real Retirement research that didn’t surprise me one jot. More over-55s seeking advice; higher incomes; higher outgoings. But this caught my attention:
Since the RDR, 16% of over-55s feel the availability of financial advice has improved, 14% feel advice has become more transparent and 11% feel it is more useful to them.

Really? I work with advisers day in, day out and what I’m seeing and hearing is a different story. Besides, if this is true, why aren’t we seeing the evidence where it counts: in banked business?

Why can’t people just do what they say?

When there’s a disconnect between what people say and what they do, you have to wonder why. In this case, a reason presents itself quicker than you can count the change in your pocket. Cost.

43% of people think advice costs more post-RDR. That’s not necessarily true, but clearer charging structures and upfront disclosure of fees don’t help to disabuse clients of the idea.

Behavioral science: cliché or coup?

If I’m right, more people are interested in advice – asking for it even – but a good percentage balk at the cost. There’s a couple of ways you can respond to that:

1. Reduce your fees. Devalue the professional service you offer. Get poor quick.
2. Charge what you’re worth. Go after the right clients. Convince them that you’re worth your weight in, well, fees.

I make it sound easy. In reality, I know it’s not.

Behavioral science is fast becoming a cliché in the business world; it’s the buzz word on everyone’s lips. But if you can look past that, you can use it to your benefit.

If you’ve got any better charging conversation tips, please share. Tweet me @MrActuary.

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