Accountants looking to diversify into financial advice need to be cautious when setting their pricing model, says Count-aligned financial services firm Cox Partners.
According to Hayden Lewis, a financial adviser with the Melbourne-based firm, pricing advice is part science, part intuition — and not a case of 'set and forget'.
"At Cox Partners, we've always used a fee-for-service pricing model for our accounting clients, and we've also applied this within our financial advice division," Mr Lewis said.
"Typically the overall advice process includes four meetings; then, most of our clients also have an annual performance and strategy review — this follows a simplified version of the eight-step process, and we price it accordingly.
"We tailor our advice to each individual client; we don't follow a 'one size fits all' approach, so the price of our advice will reflect the client's advice needs," he said.
A margin for error is a vital component of any pricing model, and Mr Lewis said Cox has built this into its cost structure.
"No matter how careful you are, when you're building an advice strategy you can come across difficulties, so it's important to allow some extra time to deal with them," he said.
"It could be an extra one to three hours, depending on the scope of the advice."
To avoid passing on extra costs to the client, Mr Lewis said, it is important to streamline processes and make them as efficient as possible, with training and technology the keys.
"All our planners are fully trained in using the XPlan practice management system, which helps speed up our processes," he said.
"The system also notifies us when certain paperwork is due. This helps take human error out of the equation and ensures we're on top of everything from a compliance point of view."
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