In my last post I described an example of a solution offered to a client of mine who wanted to sell his business. Yet he couldn’t, because his long-time wealth advisor had, for many years, sold him on investments that were totally unsuited to the client’s retirement goals. I asked my own trusted investment manager, Brian, to look at the client’s portfolio and offer his expertise. You may wonder why Brian was willing to “give away” his expert advice for free to my client just because I asked him to.
Here is how I manage my relationships with other experts. I expect them to offer a certain amount of their time to my clients “pro bono” in return for the introductions I will be giving them. So, for instance, when I get a trust agreement, I expect my estate lawyer to take the time to review that agreement for myself and the client, and to do so without charge.
Many Exit Planning advisors in that situation would rather rely on “fee sharing” – that is, splitting up payment from the client between all members of the team. After all, fair is fair, right?
Well, I have found over the years that fee sharing is neither necessary to me, or beneficial to my clients, for whom I am committed to get the best possible solution in the most cost-effective manner. What I have found is that I would prefer to take something more valuable than money from my advisors– that is their time.
As it turned out, Brian was able to offer a solution that enabled my client to sell his business quickly and retire comfortably, and Brian got a $12M account. He is very happy to provide myself and my clients services pro bono at any time. He knows that this system will provide him, at some point, with more than adequate compensation for his time working on cases that he ultimately does not participate in.
To sum up, I think there are better value propositions for your clients besides fee sharing. Having this kind of working relationship with other advisors, you will be:
- Giving your client access to a wide array of experts in their respective fields.
- Providing your clients with the best advice and most creative solutions available.
- Saving your client thousands of dollars in the process.
Lastly, once you let the “cow out of the barn” with respect to fee sharing, where does it stop? Before long your client will be asking you, “How much of your fee are you willing to kick back?”
