There is no one-size-fits-all answer to constructing an effective pricing model for advice, new research has found.
Elixir Consulting recently conducted a study into how, and how much, advisers were charging for their advice around Australia.
One of the key findings indicated there is no single solution to constructing an effective pricing model for advice.
Clients with different needs will find value with different advisers, and a pricing model that may be expensive to one client may be very affordable to another, according to Elixir Consulting managing director Sue Viskovic.
“Our industry is still relatively young in its evolution, from advisers being price-takers to gaining more control over their business and revenue streams,” she said.
“The process of redefining an advice pricing model is never an easy one, and whilst there is no single method that suits every business, we regularly see similar issues and challenges arising for financial planners.”
The research also found pricing models impacted the quality of advice, Viskovic said.
“Businesses who have engaged in a process of defining their pricing structure do appear to have improved their overall business practices, so as to improve the quality of advice to their clients, regardless of whether they have arrived at a strict fee for service, commission or hybrid model.”
