What Price Advice

Troy MacMillian in Perth runs one of the advice firms of the future.

His firm, The Wealth Designers, is finding it hard to manage the overwhelming demand for their advice services. They are now using minimum pricing as a tough, but effective means of handling the demand. 

For Troy and most professionals, it is very hard to come to grips with the fact that due his success, he has to leave people behind, who just a few years ago, were the bread and butter of his firm. These are real people, with real challenges that need good advice. It’s Troy’s and most professionals natural instinct to help everyone and this has governed his thinking to date.

However, if he took on more advice clieints that were below his minimums,  the results would be similar to loading in more passengers than a plane can safely carry. Many small advice businesses continue to think that “you have to bite off as much as you can and then chew like crazy”.  They end up with a trainwreck that demands more and more time without corresponding profits.

Troy pinches himself to check if he’s dreaming when he relates how quickly his minimums for advice have grown from hundreds to thousands to tens of thousands of dollars. This doesn’t make it any easier, nor will it. The alternative of trying to be everything to everyone isn’t a path that he wants his firm to take. 

The theory is easy to understand (read it straight from What Price Advice page 87), but the implementation of minimum pricing usually requires marathon-type focus. Obviously for some clients  that clearly don’t fit your advice proposition or you don’t want to work with, minimum pricing helps you explain your reasons not to proceed.

This is Troy’s third evolution at building his ideal advice firm, and it certainly won’t be his last. Young, ambitious, focussed on being the centre of his clients’ financial world, his is the sort of firm that is flying beneath the radar today, but will be a well-known brand name in the niche’s that he wishes to serve.

What happens to those that fall below minimums? That’s where great firms like Bill Danaher’s QInvest step in. These guys represent one of Australia’s best models of scalable, independent advice and I’m convinced will be a model for the future…but that’s another post later on.

What do you think about minimums?

Over to you…

photo credit: ca06

Because pricing is an on-going challenge.

Whilst determining a fair price for providing someone with ‘peace of mind’ has always fascinated me, it’s quickly becoming much more than a fascination for many Australian financial advisory firms and more of a necessity to ‘get it right’ as the landscape upon which former pricing decisions were based gets an almightly shake-up.

I’m thrilled nearly 1000 What Price Advice books has been sold since late November launch and we’ve only advertised in Asset Magazine and a little via our site at SCAT and I also promised in the book (right at the back if you missed it) to commence a What Price Advice blog to encourage and maintain a live and on-going dialogue with the readers (and anyone interested) to assist the implementation of the book’s theories and models.

I also see this forum as a means to provide updates, extensions of some of the theories,  some items of slides and stuff (e.g. the spreadsheets outlined in the Models section of the book) to help implementers present their new pricing theories to their clients, their teams, and their alliances. I also want to share terms of engagement letters, sample advice maps, youtube clips from real implementors and the challenges they are facing and other  pricing stories from the daily conversations we are having with great pricing pioneers everyday.

What do you think?

What do you want to know about the pricing of advice for you or your team?

Over to you…

photo credit astackpool

To maximise success in the new world, advisers are searching for real alternatives to commision based fees and hourly rate.

Jim Stackpool’s What Price Advice offers a unique combination of pricing theory, models and practical examples designed to assist advisers in developing new pricing paradigms for their firms.

It’s a must read for anyone who is serious about offering their clients quality advice priced independently of product or hours worked.