Nick Murray recently wrote about the fear some advisors have about the fees they charge, “If you are afraid to stand up proudly for the enormous gap between the great value you provide and the little you charge, you deserve to get everything you get.” It has always amazed me that many financial planners agonize over the fees they charge, while their clients, by and large, do not.

Nick got me to thinking: Why is that? While I have no way of knowing, I feel sure that we would certainly know it if our clients did not perceive value in the fees they pay us. So, as Nick suggests, perhaps we need to focus on the value we provide rather than the fees we charge. And, for financial life planners, that value is significantly greater than what we are paid to deliver it. And I do not mean providing superior returns or beating some index, which can be measured. No, I am talking about the immense value financial life planners bring to their client relationships that cannot be quantified with numbers. It is this value that results in client retention rates in the high 90s.

It was about 10 years ago that I attended a memorable FPA retreat in Missouri and was privileged to witness one of the most motivating sessions I have ever seen. Videotaped interviews of four clients of financial planners were presented. They each spoke of how important their relationship was with their planners and what it had meant to them. They recounted how the quality of their lives had improved. Some of the phrases and words they used to describe their experiences were “peace of mind,” “trust,” “friendship,” “caring,” “concern for our needs,” “availability” and “competence.”

One could not help but notice two things all of these clients had in common: They treasured the relationships they had with their planners and not one of them mentioned investments. So why should we, as financial planners, attempt to justify the fees we pay by the returns we provide? Are there potential clients out there who want to judge us solely on our ability to beat some arbitrary index? Of course. So what do we do with these prospects?

My suggestion: Do not convert them into clients. There are many more people who will appreciate the real value we provide, and the clients who concentrate on returns will most likely be unhappy at some point and attempt to find that elusive advisor who is able to deliver on those expectations. We do not need to play that game. To say people hire us mainly for superior investment results diminishes what we really do for our clients.

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