Should you put details of your fees and charges on your website?
This could be the single question I’m most frequently asked… Of course, I’m not talking about what you are required to show on your website in relation to commissions received, as outlined by the Central Bank. Let’s be honest, the information provided is often “as clear as mud” and raises as many questions as it answers,
Instead, I’m asked about whether you should set out very clearly and succinctly your fees and charges, to help prospective clients inform themselves before contacting you. I’m asked this by advisers who have developed and documented their proposition and have also implemented a structured pricing model – not everyone has done this work, which is a critical forerunner to answering the question.
Of course, like most things, there is no simple answer. This question is not just about transparency; it’s about business strategy, client relationships, and market positioning. I’m going to delve into a few areas of this topic, examining both sides of the argument.
Let’s start with the pros – the reasons for showing clear charging information.
Building Trust
At the heart of the argument for listing fees and charges on a website is trust. By openly sharing the likes of your fee structures and trail commission levels, you can immediately establish a sense of honesty and transparency with potential clients. This approach can be particularly appealing to the growing segment of consumers who value upfront information before engaging in any business relationship. In an industry where trust is paramount, showing fees and charges upfront can differentiate you from competitors who may seem less transparent.
Streamlining the Client Acquisition Process
Showing your fees and charges online can also streamline the client acquisition process. Prospective clients can self-select, making initial consultations more efficient. By the time a prospect reaches out, they have already considered your fee structure, reducing the likelihood of price being a primary objection later on. This efficiency can free up valuable time for you to focus on serving your clients, rather than discussing and negotiating fees.
Reflecting Modern Consumer Expectations
The digital age has shifted consumer expectations across all industries. With most people accustomed to finding information online instantly, not having accessible fee structures might make your firm seem outdated or secretive. By meeting these modern expectations, you can attract a broader, more tech-savvy clientele.
On the other hand, some advice firms have carefully considered this question and decided not to display their fees and charges, beyond what is required by CBOI. Here are some of the reasons.
The Nuance of Financial Advice
Some advisers believe that posting fees and charges online oversimplifies the nuanced nature of financial advice. Every client’s situation is unique, and a one-size-fits-all fee structure may not accurately represent the value or complexity of services provided. By not listing fees, advisers can emphasise the customised approach they take with each client, ensuring that the price reflects the personalised service and value delivered.
Avoiding Price Wars
Not listing fees and charges can also protect you from becoming embroiled in price wars. Without public fee structures, firms are less likely to be directly compared based solely on price. This strategy allows you to compete on the quality and breadth of your services rather than price alone, which can be a race to the bottom and detract from the perceived value of financial advice.
Encouraging Personal Interactions
Choosing not to list your fees and charges may encourage potential clients to make direct contact to discuss their needs, allowing you to build a rapport and tailor your pitch to the individual’s circumstances. This personal interaction can be crucial in establishing a strong adviser-client relationship, providing an opportunity to explain the rationale behind the fees and the unique value proposition of your services.
A Middle Ground?
For others, their solution is less black and white, and a little more grey. Instead of posting detailed fee schedules and trail commission levels, they provide a range of fees or average costs, accompanied by a disclaimer that actual fees and trail commission levels will depend on a number of factors, such as the client’s specific needs and circumstances or indeed their level of assets. This approach balances the desire for transparency with the need for customisation, inviting prospective clients to inquire further for more personalised information.
So is this the right answer?
At the end of the day, there’s no right answer. The decision to list fees and charges on your website depends on your business model, target clientele, and competitive landscape. For some, transparency is a key differentiator that aligns with their brand values and client expectations. For others, the bespoke nature of their services and the desire to avoid price-based comparisons may lead them to withhold specific fee information, emphasising the value and customisation of their advice instead.
In either case, the overarching principle should be clear: build trust with potential clients by being as transparent as possible in a manner that aligns with your service model and market positioning.
