02 August 2008

four-step procedure for talking about fees:

Dr. James Grubman, a psychologist and consultant on wealth
management for high income families, has had success with a four-
step procedure for talking about fees:

1. Don't procrastinate. Fees aren't necessarily the first thing you
want to talk about, but plan the moment when you will bring it up,
and then do it without fail.

2. Present the fee structure clearly. This is easier if the
structure is simple. Clients don't want to grapple with shades of
gray. Don't muddle the issue with discussion of what other clients
have to pay or what your client might have to pay. Complex
structures designed to keep things fair are less effective than
structures that are easy to understand. Keep it simple. Explain it.
Move on.

3. Put your fees in context. Provide a chart comparing your fees
with your competitors'. This might be a good time to explain what
you're delivering for the fee.

4. Put it in writing. Don't let somebody's bad memory create a nasty
surprise. And don't put it in small print or legalese. Make it clear
that you're not hiding anything.

In short, don't be afraid to talk about fees. Use it as an
opportunity to build trust. If you're open, honest, specific and
unapologetic, your clients will trust you, and that trust is the
support system of a productive and long-term relationship.

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