High vs Low. Where Do You Sit? - FP Advance

High vs Low. Where Do You Sit?

BY brett

In last week’s blog I looked at the threat to ongoing revenues and how this may polarise firms into high value and low value. What do I mean by that?

High value firms are those that have a client offering that consumers are willing to pay handsomely for, but most importantly are happy to keep paying for. Behind the offering sits a range of solid business processes and a team of people that can deliver on the business’s promises (without stress or fuss) year in and year out. If your clients pay you a premium price and keep paying it year after year, you will be able to sell your business for highest value.

High value firms are not concerned about threats to their ongoing revenue at all because they have a robust and bullet proof offering for their clients that will continue to justify a premium price (1% of AUM, or large annual retainer fees). Their fees are not for managing money for clients, but for providing a complete lifestyle financial planning service that delivers clients an outcome (living life with confidence and security in an uncertain world).

Low value businesses on the other hand will be those that survive, but without a comprehensive and bullet proof offering. When the time comes to sell such a business it will be very difficult to command a premium price for sale of the client bank because the business itself is worthless. Yet buyers of this type of client bank (the high value businesses) will be able to extract significant arbitrage value from some of the clients within it and will be able to secure bargains around the industry for years to come.

High vs Low

The choice and challenge for all advisers regarding high and low value business is asking yourself what camp do you want to be in? {click it to tweet it}

With clients being able to turn off ongoing adviser remuneration so easily, advisers who have previously shunned the financial planning model are moving rapidly into that space, adopting tools such as cashflow modelling to show clients the impact of their choices and decisions going forward.

Keeping the clients you already have whilst gaining new clients is key. You don’t want to end up loading new clients in the front end of your business (which is hellishly expensive) only to find they are disappearing out the back end a year or two later.

Let me know what changes you have made to improve your proposition this year.


I’d love to know your thoughts on this blog, or any questions it raises for you. Let me know by leaving a comment below.


My upcoming webinar Converting Existing Clients To Your New Approach is on Thursday 7th November 2013 at 12pm. Making the move to an ‘outcomes focused’ financial planning service is highest value for you and your clients, but there is some work involved. If you can create an amazing ongoing review service (see last month’s webinar), you are just about there.

This month we look at the steps you can take to convert existing clients to your new offer successfully.

Last month’s webinar An Amazing Client Review Service can be heard here. Research from across the globe tells us that clients really value a great ongoing service from their adviser. The same research says that what is currently delivered by most advisers is pretty bad. Find out how to create a simple yet amazing review service for your clients and watch your profits soar.

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I look forward to hearing from you!


Brett Davidson

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ABOUT BRETT DAVIDSON When you work with FP Advance you work with me, Brett Davidson, directly. My motto is ‘advise better, live better’ and I practice what I preach. I’m straight talking and get to the heart of an issue quickly. There’s no beating about the bush, just a focus on helping things improve. Ask my clients – what I teach works.