One year on and I’m being carpet-bombed with requests to complete surveys, so as to collect my experience of life post-RDR.
I’m sure I’m not the only one receiving this special attention. That’s the trouble with email; it’s too easy for every Tom, Dick or Harriet to send out a survey (if they limited it to one it would be a help). I’d love to turn the tables but I’m simply too busy deleting unwanted emails and creating inbox rules to ensure the next ones are put straight in the deleted folder.
In addition to surveys there’s a deluge of articles and commentary from people telling whoever will listen how they’ve adapted to the new world. Among them are the reformed commission-takers. Some of them really are sanctimonious prigs, as bad as ex-smokers and born-again tree huggers. Not that I’ve anything against reformed smokers or those who want to hug trees, I just wish they’d give it a rest sometimes.
What seems to be getting up the noses of the newly reformed are fees based on a percentage of assets under management, or however else it’s quantified. They also have an ally in the FCA, which appears to be saying it’s uncomfortable with percentage-based fees. It’s odd because I’m sure the FCA/Fos/Mas calculate some of the fees they collect from me on a percentage of my revenue.
A problem I have with moving away from percentage-based fees is that so many of my expenses are in some way related to a percentage of my turnover. Not all I grant you, but enough to suggest that I’d be swimming against the tide if I did otherwise – quite possibly to my own detriment. You see, I’ve already tried fixed-rate fees, hourly fees, and ‘stick your finger in the air to see which way the wind is blowing’ fees, and none of them work quite so well as a percentage of assets under management (AUM).
For one thing, it’s easier for the client to grasp, and from their perspective it’s the least painful and less ‘in their face’. That’s what they tell me anyhow. After several years of trialling other types of fees I eventually moved everyone back to an AUM fee, and they’re all delighted. Accordingly our fee conversations are much shorter and less fraught. When it all boils down, clients want value for money, but for some reason we’re focusing on price. How odd.
And what happens when the focus is on price, rather than on value? We spend unnecessary time arguing back and forth about the hourly rate, the number of hours spent, the number of hours that will be spent, where to cap fees, and so on. Almost always these discussions are at our expense, because funnily enough discussions about fees aren’t done in billable time!