It could be déjà vu, but it seems that over the last few weeks, I keep having the same conversation. Case in point: Three weeks ago, I was in Ohio with two separate groups of advisors discussing how to approach existing old 12(b) 1 clients and going fee-based; two weeks ago, I was helping a co-worker prepare for a presentation for advisors who were doing fee-based for new clients, but didn’t know how to approach the rest of their book. And last week, I spoke to a small group via a webinar on transitioning from a commission-based to a fee-based business.

I have been having the “fee-based” discussion for almost 20 years, but lately this conversation is different. The difference in these conversations weren’t the why – they all admitted that they were already doing fee based on their new clients. It was the how… as in “How do I go back to my existing clients and explain my new business model?”

And if you know me, you know my motto is that if I hear something once, three people are thinking it. If you hear it multiple times, you better address it to a larger audience.

It started in Ohio (value prop)

Over the years, I have developed “standard” presentations for conferences, study groups, and other advisor meetings. Mostly they are packaged to a point where the themes are consistent and I can just customize a few slides to speak to a specific audience. When I got to Ohio a few weeks ago, I was fully prepared to discuss “The Why and How of Converting to a Fee-Based Advisory Platform.” As I walked into the office I was thrown one of the best curveballs that I could have ever wished for. The OSJ asked if I could we could just sit in a room with his reps, answering questions and role playing to help them position their services. My one hour time slot turned into two hours of give and take with some very successful advisors.

Our initial discussion started with “How do I position my new services with my existing clients?” To me, the first thing is to start with a value proposition. To be clear, your value proposition is foundational in just about everything you do and are. If you cannot describe who your target clients are, what obstacles they face, and how you solve for those obstacles, then how can you send the message to clients that you can add value in their lives, let alone charge a fee for that advice? Your value proposition affects not only how your clients and prospects see you, but also how you see yourself.

It moved to South Carolina (client service statement)

A co-worker called me with an issue. She was asked to do a 15-minute talk on converting to fees, but after she agreed to the talk, the OSJ mentioned that most of the advisors in the room were fee based with their new clients. Why would the OSJ want a convert to fees presentation with people who were already doing that type of business? Simple: because the OSJ wanted help in coaching his team on how to move the needle on the existing book.

As we discussed the upcoming presentation, I suggested to my co-worker that her audience couldn’t go back to their clients and try to offer the same thing for 100 bps that they were getting 25 bps for today. The advisor needs to show additional value for the additional compensation. The irony, however, is that most clients don’t really know all the services, resources, and expertise that the typical advisors have available to them. My advice was that if your clients don’t know all that you offer, you have to tell them. The easiest way to show your value or the increased services available to a client going from a commission product sale to a fee based advisor sale is to show the client a “Client Services” statement.

A client service statement is a simple one-page list of what you can offer. The statement should be comprehensive and broken out into the areas of your practice. For example:

  • Do you provide investment services? Under a title like Investment Oversight Services, you can include things like: Design personalized portfolios to meet client needs; disciplined, continuous money manager monitoring; tax aware investing; and portfolio rebalancing (only if you do these things, obviously).
  • Do have retirees as clients? Under a title like Retirement and Distribution Services, you can add topics such as Social Security benefits analysis and retirement income distribution strategies (again, only if you actually do this).
  • Do you look at a client’s will and estate plan? Add topics under Family Wealth Planning such as estate plan review, consultation with attorneys, and beneficiary review/analysis.
  • Your service has to include meeting with clients so add under Client Service and Communications items such as quarterly goals-based statements, client newsletters, and quarterly client meetings. Are you (or someone on your staff) a notary? Add that too!

I think you get the idea. There are probably more headings you could add and more bullets under each heading. The point is to show more value to the client so they are willing to change their relationship with you.

And lastly to Washington (think about your words)

As we wrapped the webinar with Q&A for the group from Seattle, one advisor tried to put into words how he was going to discuss his changing business with his clients. It was obvious that he put a lot of thought and effort into his “script,” as he was eloquent as he discussed going to a fee-based approach. Although it was nice, I told him he “lost me at fee-based.”

As I have written before, I don’t go to my hourly based CPA or to my retainer based attorney. I seek out professionals. Instead of a fee-based advisor (a term the industry created to differentiate themselves within the industry), why not discuss how you are moving to an advice-based business? The words you use matter, think about how the client will hear what you say, not about how you want to say.

Most advisors are looking for more revenue, yet many don’t feel comfortable looking in their own books of business. Successful advisors know that they have to have a plan, know their value, and communicate it. In most cases, they have the resources and expertise; they just need to let the clients know about their advice based business. What are you doing to communicate to your book?

Join the Practically Speaking community

We're your go-to source for tips on how to better manage your advisory business.


I understand SEI may send future emails to me, even if I opted-out before, and that I can opt-out again later.
Photo of John Anderson

Legal Note

Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company. The content is for educational purposes only and is not meant to provide investment advice or as a guarantee of any specific outcome. While SEI welcomes comments, SEI is not responsible for, and does not endorse, the opinions, advice, or recommendations posted by third parties. The opinions expressed in comments are the view(s) of the commenter(s), and do not represent the views of SEI or its affiliates. SEI reserves the right to remove any content posted by users of this site in its sole discretion.