Fair value is at the heart of delivering transparent, ethical, and client-focused financial planning services. For holistic wealth planners, especially those not bound by regulated adviser rules, understanding and implementing fair value assessments is essential to create accessible, personalised, and meaningful service offerings.
Here’s a guide to structuring fair value assessments that resonate with clients while aligning with best practices.
Building Your Fair Value Framework
1. Fixed Fees: The Foundation
Begin by calculating fixed fees for your services based on time spent and the costs of delivery. Break these into clear categories:
- Membership: A universal cost for the baseline service, ensuring inclusivity and accessibility.
- Mentorship: The value of your time, offering personalised guidance and education.
- Additional Tools or Software: Costs incurred for specific client needs, such as cashflow planning software.
This transparency helps clients understand what they’re paying for and why.
2. Delivering Value-for-Money
When assessing the fairness of fees, ask yourself:
- Time Saved: How does your service simplify the client’s life?
- Personalisation: Does the service address unique client needs?
- Education: Are you empowering clients with knowledge to make informed decisions?
- Financial Savings: What measurable savings in tax, unnecessary fees, or other costs are being delivered?
Each of these factors contributes to a sense of tangible and emotional value for your clients.
3. Recognising Client Differences
Fair value is not one-size-fits-all. Consider the client’s:
- Life Stage: Needs and value perceptions vary for a young professional, a family in mid-life, or someone nearing retirement.
- Vulnerability: Tailor services to support clients facing financial challenges, ensuring inclusivity and sensitivity.
- Financial Activation: Some clients are more proactive, while others may require more hand-holding. Your pricing should reflect this balance.
This segmentation ensures fairness and builds trust, particularly when comparing client scenarios.
Learning from Regulated Adviser Practices
The Financial Conduct Authority (FCA) sets rigorous standards for fair value under the Consumer Duty. While holistic wealth planners may not be bound by these regulations, the principles offer valuable guidance:
- Focus on Benefits: Quantify the advantages clients receive, from reduced risk of poor decisions to the peace of mind brought by tailored advice.
- Segment Analysis: Understand the differing needs of your client base and how your service addresses those needs.
- Evidence Value: Be prepared to demonstrate how your fees correlate with the outcomes delivered.
By adopting these practices, you can ensure your services are equitable and appealing to diverse clients.
Making Fair Value Actionable
Here’s a step-by-step process for your fair value assessments:
- List Your Benefits: Time saved, personalisation, education, financial savings, and reduced risk are tangible and valuable outcomes.
- Segment Your Clients: Assess needs, characteristics, and objectives for different client groups.
- Define Total Cost: Be transparent about what clients will pay and how this aligns with the value they receive.
- Review Comparability: Ensure similar clients receive comparable offers, building trust and credibility.
- Seek Feedback: Regularly review your approach with clients to ensure alignment with their expectations and satisfaction.
Why Fair Value Matters
Fair value is more than a compliance requirement; it’s a cornerstone of client trust and long-term business success. By adopting transparent, client-focused pricing strategies, you:
- Build lasting relationships based on trust and understanding.
- Enhance the accessibility of your services.
- Differentiate your practice as a forward-thinking, client-centred organisation.
Fair value assessments are not just about pricing but about showing clients you value their unique needs and circumstances. As you refine your approach, keep communication open, transparent, and educational. Together, these steps will ensure your holistic wealth planning services continue to deliver exceptional outcomes, fostering trust, loyalty, and positive impact.
If you’d like to explore how to implement these strategies in your practice, let’s start the conversation. Together, we can create a framework that works for you and your clients.
Academy of Life Planning 