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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
Ray Sclafani (00:00.142)
Welcome to Building the Billion Dollar Business, the podcast where we dive deep into the strategies, insights, and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics, and mindset shifts that set the top 1 % apart from the rest. I'm Ray Sclafani, and I'll be your host. In today's short episode, let's talk about a topic.
Most advisors dance around, even though it directly impacts the value of their firm pricing. Here's the uncomfortable truth. Most advisory firms don't charge enough for what they do. Not because the clients can't afford it, but because the firm hasn't taken the time to define, communicate, and defend its value. Too many firms are still operating with legacy pricing, flat basis points on AUM, unchanged for years. And that worked when your offering was basic.
But how about today? You're managing family dynamics, coordinating tax strategy, facilitating estate planning, running family meetings, coaching next generation heirs, and serving as a quarterback across multiple professionals. If you're doing all that, why might you still be charging like a portfolio manager from 2005? You've upgraded your services, but you haven't upgraded your pricing. That's not humility. That's leaving enterprise value on the table.
Here's why this matters now more than ever. Your revenue model is your firm's growth engine. Pricing drives advisor compensation, talent investment, firm profitability, future valuation. Yet too many advisors worry about losing clients if they raise fees instead of worrying about the right clients not taking them seriously because they've underpriced. And let's not forget, perceived value and pricing are directly correlated. You cannot claim to be a
Ray Sclafani (01:58.67)
premium firm and charge discount firm fees. Now I'm not saying raise your fees arbitrarily. I'm saying align your pricing with your value. And to do that, you need three things. One, clarity. What exactly are your clients paying for? And can you show it on paper? Can you tie it to outcomes that matter to them? Two, confidence. Are your advisors trained to articulate your pricing structure without apologizing or discounting? And third, consistency.
Are you applying pricing policies across the firm or is it every advisor for themselves with random negotiations behind closed doors? If your pricing is ambiguous or inconsistent, you're undermining your own credibility and lowering your firm's valuation in the process. Some of the best firms we coach are evolving their pricing models. They're charging premium basis points for premium service models, adding flat annual planning fees for complex households.
They're offering project-based pricing for liquidity events or family meetings, clearly communicating value in written engagement summaries, not just line item invoices. In short, they're building a pricing strategy that scales with complexity and client outcomes. That is how you move from technician to enterprise builder. So here's the bottom line. Pricing is not a number, it's a leadership decision. It reflects what you believe your work is worth.
It funds your firm's future and that's in the best interest of clients. And it certainly sends a message to the market about who your firm is built to serve and what you stand for. If you've upgraded your offering, it's time to upgrade your pricing. With each episode, we provide a few coaching questions for reflection. Today, there are three. What's the story your pricing tells about your firm? And is it the story you want told? Number two.
Where are you currently over delivering and under charging and how long can you sustain that gap? And number three, what changes would you need to make in your communication, your service model or team training to confidently raise fees this year? If this episode got you thinking, good, that's the point. Share it with your team, have the real conversation about pricing and stop apologizing for delivering excellence. We'll catch you next time.
Ray Sclafani (04:23.278)
Well, thanks for tuning in. And that's a wrap. Until next time, this is Ray Sclafani. Keep building, growing and striving for greatness. Together, we'll redefine what's possible in the world of wealth management. Be sure to check back for our latest episode and article.