Last week, we discussed why we believe that advisors should consider charging fees. In this episode, we share how to implement those fees, and if you are currently charging them, how to know when to increase your rates. With that being said we have a lot to cover, so we are going to get started.
Choosing your fee structure
If you are totally new to fees, there are multiple ways to implement them and what to do before you select any arbitrary number. There is a lot of value to doing some research and reviewing the math when it comes to your fees.
Your fees should account for what you want to make in your business; they should account for the cost of your time and business expenses. Step one is knowing the exact cost of your business, including what it costs to pay yourself a salary. Once you know this, it is important to time track and learn the exact cost of your time based on the type of trips that you plan.
Create your service suite
Once you have your actual fee number, we suggest creating different packages, which we refer to as a service suite. In these different packages, you can outline the inclusions where clients can select their preferred level of service. These inclusions can range from the number of phone calls, what documents are provided, and various other amenities. If you’re concerned about implementing fees, a service suite can be a great place to start because you can include tiers that give the clients choices. When given choices, clients are more likely to feel in control and put trust in their advisor since they know exactly what they’re getting from the experience.
Introducing a new fee structure
First, when people come back to you as a repeat client, you’re going to want to make sure that you structure the education on the fee. Creating a script can help you avoid overexplaining yourself. For previous clients, you can simply let them know that things have changed since their last trip and that you hope that they find value in your partnership and you’d love to help them under the new structure. As for new clients, it all comes down to confidence, and how you present it. You can also incorporate education on your fees at multiple points of your intake process. Your website can showcase your fee structure, as well as your “Client Welcome Guide,” and the body of the email that provides the clients with the link to schedule a call. This way, there is no way that a potential client can be taken off-guard when presented with a quote for the service fees.
Another way to inform your clients about a new fee structure would be by updating your clientele through a newsletter. Between a newsletter and social media education, you can never over-communicate how you work. Continuing to educate your audience on multiple platforms is only going to benefit you, and essentially alleviate the stress of communicating it verbally once you get that new client on the phone.
Raising your fees
We strongly believe that you should feel in control of your fees and don’t feel like you are stuck with your fees to the point where you cannot increase them. One sign that you may need to increase your fees is when your client load becomes too heavy. If you are overwhelmed with requests, it’s an excellent point for you to consider increasing fees since you clearly have a high demand for your services, which may warrant charging a higher investment from your audience.
The second sign that you may need to increase your fees is when your effort doesn’t really match your income. This requires putting monetary value, or you know cost for time number, and referring back to that time tracking. For example, when COVID required advisors to be educated on all the entry regulations, education on these entry requirements became another time-consuming responsibility. Any time that a trip is more complex, for any reason, it takes more time and therefore you should charge for that time.
The last reason to consider an increase in fees is that you’re not meeting income goals. If you’re not making money on your business, it isn’t a business, it’s actually a hobby. You need to ensure that your income is sustainable for your lifestyle and for your business overhead.
There is a time when inflation or changes in your lifestyle will require you to reevaluate your fees. And that’s normal, I think we’ll see this across the board in all Industries. You should never feel bad for needing to be honest that your life has become more expensive and you need to make more in order to match that lifestyle. If you need to hear it from someone else, we give you permission to want more out of your lifestyle. And if you’ve been living incredibly moderately and now you’re in a phase of your life where you want to only travel in first class because it allows you to enjoy your time more, then let that be your motivator.
Have you implemented or raised your fees as we move into 2023? Share your experience in the comments!