2 Questions to Ask Yourself before Going Fee-Based


As you evaluate the opportunity to transition to a fee-based practice and all of the benefits that it may afford you and your clients, we suggest taking a step back and determining what you really want to accomplish before you get started.

It makes sense that any time you make a change to your business, you need to have a good plan. And, all good plans start by asking first “Why?” and then “How?”

Transitioning your business to fee-based is no exception. Let’s look at two questions that every advisor should ask before going fee-based:

1. Why do I want to be a fee-based advisor?

Simon Sinek, a leadership and motivational expert, shows in both his best selling book, Start with Why? and his popular TED Talk that people don’t buy what you do, they buy why you do it. He suggests that if you know why you are doing what you are doing that you should be able to articulate your value more clearly and speak of your services with greater passion.

Therefore, leading with the question of why (versus how or what) can lead to faster and greater success.

To help you think about your motivation for becoming a fee-based advisor, we provide a short list of why many other advisors have transitioned to fees:

  • I want to make a bigger difference in my client’s life.
  • I want to be more of a financial consultant and less of a salesperson.
  • I want to be able to do more for my clients.
  • I want to get paid for all of the work I do.
  • I want to take my business to the next level.
  • I want to provide a better investment strategy to clients.

Before you move to the next question, it is imperative that you write down your specific reason(s) for why you want to transition to being a fee-based advisor. Putting the reasons in writing helps memorialize them and allows you to continually reference them as you move through the transition process and communicate this change with your clients.

2. How will I transition to fees?

After you determine the why, now you can focus on the how. To start, we recommend you shift your mindset. Simply charging a client a fee (which is typically higher than what they are paying now) without changing how you conduct business is a recipe for dissatisfaction. You need to be prepared for what is ahead and think about how you are going to deliver on the why.

There are many aspects of a successful transition and below is a list of what we have seen work best during advisor transitions:

  • Plan your transition and work your plan.
  • Segment your business to see who would benefit from a transition to fees.
  • Define your service offering so your clients know what they can expect.
  • Script out how you plan to position the transition with your clients.
  • Fee-based accounts require additional servicing, so you need to determine if you can do it yourself or do you partner with a firm like Bellatore that specializes in simplifying the process.

We have stressed in other articles that a fee-based business is a trust-based business. Being prepared for your transition and providing a consistent experience for all of your clients during the transition can help re-establish and deepen the trust your clients have in you.

Work Your Plan

Margaret Thatcher is famous for saying, “Plan your work for today and every day, then work your plan.” By spending the time required to understand why you want to go fee-based and how you are going to do it, you are setting yourself up for a successful transition.

Now, go out and work your plan!