Advisors who don't seek client feedback
don't know what their clients want, they know what the advisor thinks they should want.
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We all know that fiduciary is better than broker, and so naturally our clients would prefer us to be fee-based than commission-based, right? Of course. And that's why it's a great idea to attract clients by talking about how we charge fees.
Well, that makes a lot of sense to most of us because we tend to talk about our marketing with other people in the industry and not with our clients and prospective clients. As it turns out, clients don't like fees and they don't like to be reminded of those fees. So, when Sullivan and North Star surveyed investors on their reactions to different words we use in our marketing, for the 2012 update in their "Rebuilding Investor Trust" series, they found
that 64% of respondents had a negative reaction to the phrase "fee-based."
Since fiduciary is clearly better for clients, you might also be surprised to learn that in a survey
done last year by Cerulli Associates, about 47% of 7800 households surveyed preferred paying commissions compared with 27% that would rather pay a fee based on assets.
Of course, if you had asked your client advisory board
to evaluate your marketing you probably would have heard about this already. Who better than your best clients to help you understand the most important messages to communicate in your marketing? This is the group with the clearest idea of what is most valuable about what you do, and their language for describing it probably differs from yours. It is possible that your clients consider the fact that you are "fee-based" to be one of the more important things that distinguish you from other advisors, but I suspect they will talk more about what you do for them rather than how they pay you.
One of the biggest mistakes we make in marketing our practices is to dream up what we will promote and what we will emphasize without input of the people we are hoping to attract. Engage your clients in an ongoing conversation about your value, and you will find you have a much clearer idea of what to say to attract more clients like them.