Transitioning to a Fee-Based Practice

Transparency for your clients. Stability for you.

Every day, more and more advisors are transitioning their businesses to a fee-for-service model. The reason? The fee-based model can produce “win-win” scenarios for both clients and advisors.

Benefits to clientsBenefits to advisors

Receive customized financial planning and advice

A fee-based structure offers a good platform for the development of fully integrated financial strategies, and includes access to a wide range of well-researched investment opportunities.

Build lifelong relationships

Advisors build trust through the assurance that they want to increase the value of the clients’ portfolios and provide high-value service, not by generating transaction fees.

Fee transparency

Clients gain greater clarity on their investment costs and the fees paid for their advisors’ services.

Increase income certainty

Advisors can generate a steady income stream that is reliable and predictable.

Take comfort knowing your goals are aligned

Clients gain greater peace of mind in knowing that their advisors are also focused on growing the value of their investments.

Grow the account, grow the business

By setting a flat fee based on a percentage of the total value of clients’ accounts, both the advisor’s income and the value of the practice will grow as the value of the accounts increase.

Tips for Shifting to a Fee-Based Business

Though change can be daunting, keep in mind that moving to a fee-based model can be done in phases. The following three-step approach will help introduce this new fee model gradually, giving clients time to understand the change and recognize how it can benefit them.

Introduce the concept of a fee-based program to select clients

Sending a personalized letter informing clients about plans to introduce a fee-based model is an excellent way to initiate the change and solicit feedback. The letter should explicitly outline the benefits, as well as invite discussion about how this kind of change can enhance the services clients receive.



Simplicity Pricing/Fee-Based Client Letter Template

Follow up with a telephone call

Within 7 to 10 days after the letter has been sent, make a follow-up phone call with the intention of setting up a face-to-face meeting. The purpose of this call is to determine each client’s comfort level and confirm a meeting time to explain the concept in greater detail and address any questions.



What’s Your Story? Workbook

Sit down and meet

Once the meeting is confirmed, make sure that you are prepared. Consider setting an agenda that will address the following:

  • Highlight the services available and the reason for offering a fee-based structure. Be ready to communicate your distinct value proposition.
  • Give clients an overview of the fee-based program offered by your firm, focusing on the benefits to them.
  • Review the clients’ financial goals and reiterate how this new program will fit in well with those objectives.
  • Make note of any client hesitations or concerns and address them immediately; otherwise be sure to follow up shortly after the meeting.

One of the most important aspects of establishing a fee-based business is being able to clearly communicate to your clients in a way that is both easily understood and aligned with what they want, need and value.



Client Review Meetings Checklist

Additional Resources Available:

We have a growing suite of materials to assist with client meetings and communications. See below for a few items that align with the steps above. Please contact our Sales & Marketing Services Team at 1-855-FT-FUNDS for further assistance.

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