Is Your Billing Structure Creating Potential Conflicts? Hot

SherylCPASherylCPA  
 
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Of course, we’d all like to think that we will give recommendations in the best interests of the clients. But, is there some reluctance at the thought of losing AUM?

 

When you think about it, you advise on much more than “just” the investments you are managing. You help your clients with all of their financial matters. You might provide advice on:

 

  • Refinancing a mortgage
  • Stock options
  • College Funding
  • Purchasing a vacation home
  • And more …

 

It might be time for a change in billing methods – to either household net worth or straight retainer. The potential for conflicts of interest is just one point in favor of a switch. Other reasons can include:

 

  • If we claim that our biggest value is planning, then why do we charge based on account values?
  • If there is a substantial drop in the market, does our workload decrease proportionately? (Most advisors will agree that our workload actually increases during bear markets.)    

 

No matter how you are currently charging for your services, now might be a good time to consider alternatives.

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