Last week’s blog led to an unexpected debate about whether financial advisers and planners should disclose their fees online.
The article in question revealed the most popular pages on the websites of financial advisers and planners. You can still read it by clicking here. Nothing controversial about that you might think. And you’d be right. However, it soon led to a debate on Twitter about why firm’s websites aren’t disclosing fees online. There were even a couple of people suggesting that consumers should discount working with advisers and planners who don’t disclose their fees online.
The answer to why fees pages aren’t in the top 10 most popular is simple: not many sites disclose fees. We researched more than 300 websites last year and found that:
- Only 52 (17.33%) mention fees
- Of those, just 15 (5% of all the websites in our research) disclose the likely fees paid by clients
Following the Twitter debate, we thought it was worth returning to the topic of fees this week. The first question, of course, is: should you disclose fees online?
No easy answer
We don’t believe it should be mandatory for financial advisers and planners to display fees online, and that each firm should be free to decide for themselves.
It’s also hard for us to say whether firms should display their fees as the aims of every business are different. However, there are essentially three different approaches:
- Not to disclose fees online: This is the approach taken by the majority.
- Explain your fee philosophy: For example, if you charge fixed fees for both initial and ongoing advice, you might explain why you charge in this way, how fees are calculated, and that this approach makes you different to the majority who charge a percentage of the assets they manage.
- Fully disclose all fees: Showing exactly what you charge at each stage, providing examples of costs for different scenarios and demonstrating value.
There are three key benefits to advisers and planners of the third option:
- Transparency and trust: Most advisers and planners claim to be transparent and trustworthy (who wouldn’t want to be seen as such?) and disclosing fees online demonstrates both.
- Avoiding surprises: If the potential client has already viewed the fees online they will enter the first meeting in a more informed position, which should result in fewer awkward conversations about fees. The slight danger with this, of course, is that there’s no guarantee the prospective client will have viewed the fees page, which may dilute this particular benefit. This risk is reduced if you avoid making mistake #1 below.
- Enquiry selection: Many of those disclosing their fees online do so to deliberately deter enquiries from people who either couldn’t afford their fees or weren’t prepared to pay the amount quoted.
However, we’ve noticed that even the most well-intentioned advisers and planners who disclose fees online often make one of three mistakes.
1. Hiding their fees page
If you’re going to publish your fees online, why bury the page deep within your website? It’s far better to include the page in your main navigation or in a drop-down menu.
Making it easy to find will help you take advantage of the three key reasons for disclosing your fees online. Hiding it away? Not so much.
2. Being too broad
Telling your website visitors that you charge £3,000 to £12,000 for a financial plan is no help whatsoever to a client. They’ll naturally gravitate to the upper or lower end of the scale and will find it impossible to make an accurate assessment of value or compare your services with those of another adviser or planner.
It’s far better to be specific, explaining your charges in detail at every stage of the advice process. It’s not easy and takes time to build a page which clearly articulates your charging structure.
But, it is possible, as this page shows: https://redcirclefp.co.uk/why-choose-us/our-fees/
3. Using compliance documents to disclose your fees
We’ve occasionally seen websites using links to compliance documents to disclose fees.
This is a mistake, as:
- no matter how well the documents are written, your potential client will still have to wade through multiple pages to understand your charges
- it’s hard to demonstrate value and client outcomes if you’re disclosing charges in this way
- it looks as though you are hiding your charges, which kills one of the key advantages of disclosing your fees online
We’re here to help
If you’ve decided that now’s the time to disclose your fees online, we’re here to help; we’ve produced a free checklist to help you build an effective fees page, which you’ll find here.
Alternatively, we can help you write, design and develop an effective fees page. If you would like to discuss this in more detail please reply to this email, drop us a line to [email protected] or call 0115 8965 300.