Unfortunately, there is a clear divide between what financial advisors are saying and what investors are hearing:

Investors don’t always understand the fees they’re paying, which can seed doubt and put the relationship at risk. One of the recommendations in our five step strategy to better communicate with clients about fees focuses on objectively critiquing the client relationship to hone in on ways to enhance value.

If the goal is higher client satisfaction, who better to ask than the client? Being open and direct about what the client values (or doesn’t value) can help focus efforts on what matters most. It demonstrates responsiveness to clients and it can make the relationship more satisfying for both. This doesn’t have to be an extensive discovery process. A conversation is best—simply take the time to listen to what’s important to them.

Firms often have an established formal feedback process, in which case the take-away here might be to review that process with an eye to focusing on the client’s perception of value for fees.

If there is no formal process in place, advisors can get started by selecting a sample of clients. That could include top-tier clients or relationships at risk. A mix of strong and vulnerable relationships could provide a balanced representation. The task is clear: ask for help in understanding, from their perspective, the real value that you offer. Conversation starters could include:

Being direct and building trust

While the task is straightforward, success for both parties hinges on good communication. Encourage clients to respond honestly, with a gentle reminder that you share the same objective—to reach their financial goals. Like the broader discussion of fees and value, this is about more than money. It is an opportunity to build trust, add transparency, and increase satisfaction. Value is your human capital—your unique ability to understand clients as individuals and develop financial strategies aligned to their goal.

The demand for greater value and investors’ shifting attitude toward engagement is about accessibility, collaboration and improving outcomes. Growth (of the practice) and advocacy (of the client) are directly correlated with how effectively the advisor/advisory team communicates and demonstrates the value of the offer. This includes the pricing strategy, and it should reflect the economics of what the advisory relationship offers.

To continue the conversation about fees or to learn more about our five-step strategy on communicating about fees with clients, see our piece, What Are You Really Saying and What Are They Really Hearing.