Transition to fees?

By: Almo Lubowski, Strategist, Author, Coach & Speaker 

Financial planners need to remember they have a skill that people desperately want and need but they don’t trust the traditional package you come in!

I started my Postgraduate Diploma in Financial Planning in 2007, in 2008 I wrote what was then known as the CFP Board Exam and by the beginning of 2009 I was accepted as a CFP Professional at the Financial Planning Institute (“FPI”). I then started working for the FPI in October 2010. I applied for a position to work there mainly because I wanted to get more involved in professionalising financial planning and I knew very little about the avenues to do so. 

It was probably one of the best jobs I ever had, not that I have had many of those to be honest, but the point is I enjoyed myself tremendously. I was quite involved in ensuring that the FPI acquired a seat at the table with stakeholders such as National Treasury and the FSB (at the time), something that it was largely excluded from then. It was the beginning of concepts  such as TCF and RDR being introduced. National Treasury released the “Red Book” a few months after I started working in my initial position as Technical Manager. 

I would however not have been able to do the work I did while at the FPI had I not had the support of the Voluntary Committees and Working Groups, which had passionate members serving and giving valuable time and input. I soon realised that I did not need to have worked there to have had an impact. The FPI is very dependent on the work of dedicated volunteers and ambassadors. 

Theorising and debating these issues amongst ourselves and amongst the various committees was great but I was passionate about seeing how this could work in real life. I wanted to have a more practical hand in helping people gain financial wellbeing, through more specifically holistic financial planning on a fee only basis. I decided to go into practice again and test the models we had researched and looked into. 

It was a tough learning curve and I tried many different things. I even presented a webinar through the Centre for Professional Development on Pricing Models, but in truth I still didn’t have all the answers and in fact I still don’t. It is an on-going journey of discovery with no right answer, but I can say I have tested a number of things with real clients, all the way to a fully-fledged fee only practice called The Virtual Planner. 

The Virtual Planner does not have an FSP license, as I do not give any specific product advice or sell a single financial product. It remains to be seen whether it actually needs licensing, but I believe it will only need it when financial planning becomes a real class of business under upcoming regulatory changes and, to have this category, will only be possible as a CFP Professional with the support of the FPI. 

In order for you to charge a fee the client needs to perceive value in what you do. Input value before you can extract it! Ask yourself – What should I be doing to input value into the tribe, community or cultural network I would like to lead and service?