The Perfect RIA

Pricing Your Worth and a Guide to Year-End Planning

Dec 13, 2024

Explore the intricacies of billing and fee collection in the financial advisory world. Advisors often undervalue their services, which leads to significant revenue loss. Discover the strategic '3 Ps' method for evaluating clients: personability, productivity, and profitability. Get insights on important financial metrics like pipeline analysis and EBITDA. Learn how proactive planning can enhance client relationships and improve overall business profitability as year-end approaches.

06:49

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Quick takeaways

Advisors frequently underestimate their value due to inconsistent billing practices, leading to significant revenue losses and financial risks.

A strategic approach to year-end planning involves evaluating clients through the 'three Ps' to enhance business sustainability and profitability.

Deep dives

Billing Strategies for Advisors

Advisors often overlook the importance of efficient billing practices, which can lead to significant financial risks. Discussions highlighted that many advisors believe they are charging appropriately, yet often, small billing discrepancies result in lost revenue. Lacey emphasized the need for advisors to adopt a disciplined approach to understanding and implementing billing rules, as this fosters clarity and confidence in pricing. The conversation also mentioned the dangers of relying on outdated methods like Excel for billing processes, outlining how this can result in severe consequences, including legal troubles.

Billing Strategies and Year-End Business Planning Insights

7min

In this weekly recap, Amber Kuhn highlights fee management and strategic business planning. On Monday, Matthew Jarvis was joined by Lacey Shrum from Smart KX to explore the often-overlooked art of billing and fee collection. They revealed that many advisors underestimate their value, leaving money on the table through inconsistent billing practices and fear of raising fees.

On Thursday, Jamie recommended taking a strategic approach to year-end business planning. She introduced the "3 Ps" client evaluation method: assessing clients' personability, productivity, and profitability. Jamie broke down essential metrics for financial practices, including pipeline analysis, client account sizes, and critical financial calculations like EBOC (Earnings Before Owner Compensation) and EBITDA.

Resources in today's episode:

- Episode Website - Fee Billing Faux Pas: How Advisors Lose Money Without Realizing It With Guest Lacey Shrum [Episode 286] - Show Me Your EBITDA