While financial advisors may believe they are well-covered when it comes to discussing fees with their clients, research suggests that there is a disconnect between this perception and reality.
According to a report by State Street Global Advisors and Knowledge@Wharton,1 most advisors (95%) say they discuss fees, yet fewer than two-thirds of clients (61%) say their advisors initiated fee discussions with them.
The study goes on to note that fewer than half of clients (43%) say they understand advisory fees “completely” or even “fairly well.” This is important when you consider that nearly one-third of clients (31%) consider “reasonable cost” to be one of the most important factors in their choice of a financial advisor.2
It’s essential to get comfortable discussing fees with clients in a way that reassures them of the value your firm provides in helping them achieve their financial goals. This may be...