Clients should pay $5k-$10k for advice
Financial advisers are too often refusing to charge a fee or charging too little for up-front planning and advice work, "leaving money on the table", according to Bill Bachrach.
The US-based financial adviser consultant said many advisers do the planning for free with the hope of attaining some of their assets, and labeled this method amateurish.
Bachrach believes advisers should be charging clients $5000-$10,000 as a minimum.
"If your spine is still under construction or the idea of charging an up-front fee for planning and developing your advice freaks you out then at least start with $2000," he said.
"Just make sure that your fee doesn't make you look like a weenie."
He said charging someone who has over $1 million at their disposal only $2000 is not reasonable.
Advisers should charge a fee for the planning itself, regardless of whether the client applies the advice. If they act on the advice, advisers should get paid for that too.
"The bottom line is that you must have confidence that the work you do is valuable in order to expect other people to value you and your work," Bachrach said.
He also believes clients are more likely to act on advice they have paid for.
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