Strategy and marketing consultants Simon-Kucher published research paper Nothing to Lose: Pricing for the Next Generation of Wealth Management Clients earlier this year. This guide on how to price for the new financial services client and environment says that to capture younger clients, firms need to let them (1) See what they get; (2) Choose what they want; and (3) See what they will pay. Below are some thoughts on and samples of transparent pricing.
From the report:
Wealth managers are typically reticent about fees in public-facing material, especially on company websites. —“It has to be a face-to-face conversation” is the time-honored rule. …[But] the face-to-face rule is an increasingly endangered one, given that pricing practices for a given advisory firm can be accessed in about three clicks via the publicly available ADV form.
A planner recently shared with us the tale of a (highly-educated, business-owning) client who made the mistake of adding up the basis point fees in a tiered pricing schedule, rather than calculating the blended rate, and almost withdrew from the onboarding process upon concluding that he would be charged 260 bps (140 + 120).
Technology that can instantly scan and compile these fees on behalf of clients is not far away. A future-ready approach would therefore be one that embraces fee transparency. If clients are going to be eyeballing your schedule, it might as well be on your terms.
Following are several examples of fee transparency. The Modern Money Advisor site shown in the second example, in particular, demonstrates use of all three guidelines for the new pricing: Clients see what they get, have choices, and know what they’ll pay. (This is also the case on the websites sampled in the first image, see their links in the source line.)
Source: Nothing to Lose: Pricing for the Next Generation of Wealth Management Clients, Simon-Kucher & Partners. Websites sampled are 3oakscapital.com, thinkplansave.com, and financialrounds.com.
Source: Modern Mondey Advisor