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Adviser Workshop: How and when to increase your fees

by Michelle Abrego on Jan 30, 2013 at 13:06

Adviser Workshop: How and when to increase your fees

Alan Smith (pictured), Louise Oliver and Jeremy Freeman give tips on how to review your fee structure and let clients know about the increased charges.

Alan Smith

Chief executive, Capital Asset Management

We start with the idea of ending up with a gross profit margin of 25% as a minimum. If we know what level of profit we need to generate, we can identify what service proposition we think is of value to our clients, work out what it costs to deliver that service and ensure it all joins up.

If we cannot deliver that and maintain our profit margins, one of two things needs to happen: either we need to scale back on the proposition or we need to raise the fees to match it.

We think we have it pretty tight now. We can deliver a high-end proposition to those who want it and value it, and maintain the margins and the profit levels.

Quarterly review

I review it constantly, but I would look at it in detail on a quarterly basis. We can also identify early on if we are starting to see our profit margin squeezed, like we’ve seen lately due to regulatory cost.

Louise Oliver

Partner, Taylor Oliver

We review our fees on an annual basis and on an individual client basis. If we do a one-off project, we need to see how long it would take and charge accordingly.

The factors increasing costs are the retail distribution review and the raised capital adequacy requirements that will be coming our way.

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