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Secret IFA: IS there too much focus on low cost?

Secret IFA: IS there too much focus on low cost?

“Put your feet up” my wife said. So, kicking off my slippers I leaned back into my chair, pleased she’d noticed how hard I’d been working.

“No, put your fees up” she repeated. I really must get my hearing tested. She thinks I could earn more (to be fair she’s probably right) and like many people, thinks the answer lies in putting up fees.

Not making enough profit? Put your fees up. Working more hours than you’d like? Put your fees up. Heard some people are charging more than you? Put your fees up. It seems whatever problem we have is solved just by putting fees up.

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But why wait for a problem? Get ahead of the curve. Simply put your fees up and the good life will soon be yours. Or so the story goes.

But there’s a paradox in my house, because while my wife thinks clients are able and willing to pay more, she’s not of that mindset when she has to pay. I saw this first hand when engaging a ‘property finder’ recently. The terms were an initial £895 plus 1.8 per cent completion fee on successful purchase – not at all the cheapest for the service.

It was straightforward and reasonable to me. We’d been trying to find a property in another part of the country and the time and cost were wearing us down. Or so I thought. To my wife, the prospect of additional fees for something she thought we could accomplish on our own made her less enthusiastic. Despite the many unsuccessful months already spent house hunting, even if it meant many more months driving hundreds more miles every weekend to view houses, that’s what we would do to save those fees.

As she was keen for me to put up my own fees, I’d assumed she would understand where I was ‘coming from’ and I wouldn’t need to sell the idea of a property finder’s fees.

I’d said we needed a property finder to save time, which was wrong. It wasn’t about saving time (or even saving fees) it was about finding the right home. Which is what the property finder said when I finally arranged for us all to meet. He talked about past successes. I’d been telling my wife what we needed, and he talked to her about what we wanted, which is when the fees stopped being an issue.

I see this a lot among peers. They need to increase fees, but already meet resistance at their current level. The resistance is largely because we’re telling people what they need, rather than what they want. Focusing on low-cost funds, low-cost wrappers, low-cost everything until pretty soon the client focuses on low-cost advice. And that still won’t get them what they want – will it?