Working out when to tell clients how much your services cost requires careful timing, says Martin Mulcare.

The timing of your pitch to your prospective client is a critical element of your client engagement process. For many potential clients it may be the difference between them signing up, or not, and between being profitable, or not.

Here are three options for the timing of your pitch to a prospective client:

At the first meeting

The initial or discovery meeting is an obvious possibility. If the prospect has enjoyed your first meeting and you believe that you can add significant value, there is a strong temptation to secure an engagement at that point. The benefits are: it is an efficient process, as they are signed up in just one meeting; and it capitalises on the quality of that first meeting.

There are, however, some significant disadvantages.

The risk of “buyer’s remorse” is accentuated with a sale at the first meeting. The client may well be wondering two days later what they have signed up for and how they were convinced to do so. This may lead to a re-think and/or a lack of trust.

The opportunity for a sale may adversely impact the rational pricing of the adviser. I can imagine an adviser thinking, consciously or sub-consciously, “I think the right fee is $10k but I know they will sign up for $8k”. And guess what? The adviser has just given away the profit margin.

At an “engagement meeting”

After a mutually satisfying discovery meeting, a second meeting might be scheduled with the primary aim of agreeing scope, fees and the terms of engagement. The period of time between the first and second meetings is used to brainstorm the potential scope of first year activity, to capture the client’s financial life on a mind map, to price the engagement and to draft a “terms of engagement” (TOE) letter. The benefits are: the second meeting provides a balanced environment to make considered decisions with suitable documentation to assist; it permits time to get the pricing right (or perhaps less wrong) and to utilise the skills and experience of the team and perhaps the adviser’s professional network; and it enhances the implied promise to the client that everyone is treated as an individual with a tailored strategy.

There are, however, some disadvantages. If the prospect has enjoyed a productive discovery, the “warmth” generated may have worn off by the engagement meeting. It is important, therefore, to schedule the engagement meeting within two weeks of the first meeting.

For busy clients the second meeting may represent an imposition on their time. It is important to manage this risk by stressing the importance of the meeting and managing expectations about the process.

There is some work involved in preparing for the engagement meeting and this needs to be factored into the pricing model.

At the plan presentation meeting

Many businesses adopted the habit of pitching at the same time as delivering the client’s detailed wealth management plan. The benefits of this approach are: it enables the adviser to demonstrate value and capability in tangible form (that is, the plan); it enables a detailed understanding of the fees required to deliver the service; and it may entice the prospect to sign up as an act of good faith, given that the adviser has already undertaken so much work.

Again, there are some significant disadvantages. There is a risk that the client will not sign up, and the time and cost involved result in a material loss to the business.

The client proposition may be puzzling for the client who may be wondering what he or she is buying if the plan has already been prepared before they sign up.

I think that the real test of the best time to pitch is whether the adviser is confident to quote at that point and whether the client is equipped to accept the offer at that point, without running any material financial risks. In that context there is no doubt that the best time to quote is at the engagement meeting. It is important to recognise that the success of the meeting is still dependent on the quality of the materials (the advice map and the TOE letter) and the confidence of the adviser.

In the brave new world of quoting fees in a transparent manner, using dollars not percentages, many advisers lack confidence. There are several possible reasons.

It may be a lack of experience or a lack of practice. Practise using role plays. Record engagement meetings and learn from listening to both the wins and the losses.

It may be a lack of belief in the value being added. Step into the client’s shoes. If you truly understand what is important to them and you really believe that you can help them achieve that then it becomes a matter of communicating that in pictures (the map), written word (the letter) and spoken words (the pitch).

It may be a fear of rejection. Think like a business owner, not as a sales person. It should be factored into your business plan (and your personal expectations) that about 20 per cent of prospects will not sign up.

In reviewing the original question about the best time to quote, in this context it is timely to review the three options I presented. A more provocative conclusion might be that Option 1 is for sales people, Option 3 is for planners and Option 2 is for professional advisers.

Martin Mulcare can be contacted on

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