“You are too expensive!” How often have you heard that objection? Since people can trade online for free, cutting out the middleman often sounds like a good idea in theory. This is actually a question about the value you bring to the table. You can also act on your own defense in court or represent yourself at an IRS audit, but many people prefer to put a lawyer or accountant between them and the other party. Let us just stick to talking price.

Five Strategies For Addressing 'You Are Too Expensive'
1. Rationalizing the difference. “You are too expensive.” Compared to what? The prospect might point to a no-load mutual fund or similar product you buy directly. In their opinion, “they” cost zero. Your managed money option costs 1%.

Approach: The no load alternative isn’t managed by an order of monks working on a charitable basis. It is managed by a team of professionals like every other fund. Even ETFs need some supporting staff. There are fees attached. These are easy for you to research. Is the prospect aware of these costs? Subtract that cost from your cost, leaving the difference. Now the discussion can focus on the value the client gets for the difference between the two fees.

2. Add, then subtract. A New York advisor explained a great strategy. He would explain to a prospect “how I do business” along with all the features and benefits. He explains how all the features fit together and how they deliver value. That is when the prospect says: “That is too expensive.”
Approach: The advisor is cooperative, not adversarial. He asks: “What parts of the process would you like to take off the table?” This is when the prospect realizes they want all the pieces and they come at a cost. The alternative they are considering might be cheaper, but it comes with less pieces.

3. We do not live in a no-load country. It is not free to live in the U.S. You pay income tax. How much do you pay? A HNW individual might be paying a marginal rate of 37% for the portion of their income over $539,901. Income tax is like an annual fee.
Approach: How many Americans decide they will move to a no-load country instead? There are 14 of them including Monaco, Bermuda and Somalia. Do most people move to a no-load country? No. They think the value and opportunity they get living in the U.S. is worth paying for.

4. The ATM fee. Take out $100 from a cash machine not affiliated with your bank. What will they charge you? According to bankrate.com, out of network ATM fees average $4.66.
Approach: That ATM machine charged over 4% to hand over $100 of your own money. Will that ATM machine give you a year’s worth of service going forward? No. It feels it did a fine job handing you $100. Our firm charges only 1% on money management and provides a year’s worth of service for that amount.

5. Pay as you go. People might worry about getting buyer’s remorse. What if I think making this move was a mistake? Stocks have costs to buy and sell. Other products have front end loads or surrender charges. Managed money and fee-based accounts are priced on a pay as you go basis.
Approach: You are only paying for the service for the time you are using it. Investing should be considered from a long-term perspective, however if you were only in our program for four years, three months, two weeks and one day and then said: “I want out,” you are only charged for the period you were using the service.

These are easy to understand reasons why your services are priced fairly.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book “Captivating the Wealthy Investor” is available on Amazon.