As with many labor-intensive professional services, financial planning is not inexpensive to provide for clients. There are overhead costs, potential staffing costs, regulatory and compliance costs, in addition to the costs for software and services to support how professionals deliver their value. Accordingly, all of this is wrapped into the price that financial planners must charge their clients to earn a reasonable living and an adequate business profit. Yet often clients balk at the cost of financial planning. Which begs the question – if your clients think financial planning is expensive… to what are they comparing that cost?
Most young planners have heard the stories about how difficult it was in the past to start a financial planning firm. The business was all about products, and sales. It was an “eat what you kill” world – and if you couldn’t hunt effectively for business, you didn’t survive long. Yet the reality is that as the financial planning world changes and evolves, it is actually getting even harder to start a firm now than it was in the past. Because while it may have been difficult to sell products as a 20-something-year-old “kid” in order to survive a decade or two ago, that’s nothing compared to the challenge of trying to be a 20-something-year-old comprehensive financial planning expert who can build a deep advisory relationship with a stranger!