You are here: Home - News -

Don’t sell yourself short: Fee pricing

by: Peter Welch
  • 13/11/2012
  • 0
Don’t sell yourself short: Fee pricing
Anybody advising in the mortgage market during the last decade will probably have been operating an adviser charging model and will know customers are generally comfortable with paying a fee for mortgage advice.

In contrast IFA colleagues have, up to now, earned from commission but that is all set to change as RDR is eliminating all forms of commission for investment products. And as any reader will be aware this has stimulated much discussion in the IFA community.

Understandably one area that’s in focus right now is the level of fee charged to a customer and this naturally overlaps with mortgage advice.

I’ve worked with a number of advisers in the past who have appeared to be blissfully unaware of their fee level relative to their competitors or peers.

When they checked on their ‘pricing’ they found that they were actually charging alarmingly below the market rate which enabled them to immediately adjust their fees. Of course, it’s hardly surprising that their clients hadn’t thought to bring this to their attention.

This isn’t uncommon because, if you think about it, when setting the cost of your service it’s really putting a price on ‘your’ own worth.

Psychologically this is hard for most of us as it stirs up all sorts of existential questions: ‘Am I worth it?’; ‘They won’t like me/buy from me’; ‘If they say no they’re rejecting me personally’, etc. These are all perfectly normal emotional conversations we can have in our own heads.

If any of this resonates with you, here’s some suggested remedies to help you ensure you’re able to charge what you’re worth.

• Do some research on what is being charged by others in the market for the types of customers you typically deal with – this can be via the internet, through your personal network of peers or even by mystery shopping a competitor.

• Write a list for yourself of the tasks, costs and services undertaken for a client – many of which they will never see or be aware of. Management consultants might call this a Value Proposition.

• Prepare, learn and practice what our American colleagues call the ‘Elevator Speech’. This is a 30 second summary of the benefits a customer gets by doing business with you personally. If you can tell your story in a concise and compelling way you reinforce your value and, therefore, justify your charges.

If you undertake any or all of the above it will boost your confidence and help to reassure your subconscious that you truly are ‘worth it’.

Peter Welch is key account director at Equifax

Related Posts

There are 0 Comment(s)

You may also be interested in