No. of Recommendations: 6
Interesting article from Michael Kitces on the state of the financial planning industry as clients get wiser to high fees.

https://www.fa-mag.com/news/kitces--financial-planning-is-no...

“Client experience is not better client service, and it’s not better technology for our clients,” said Kitces. “Those are features—things we do—but that’s not what defines a unique client experience. What defines a unique client experience is something that a client does and engages in that you stage for them—that they go through and have some kind of transformative experience or process.”

Kitces points to Build-A-Bear as an example of selling an experience. A teddy bear costs $10 or so from an average retailer or online, but customers at Build-A-Bear pay up to $220 for a bear that they have to build themselves—because people will “pay at a whole different level for experience,” he said.

Build-A-Bear customers get to choose the color, texture, clothing and other elements of their bear. Though there are staff on hand to assist customers, they primarily serve as guides. Most of the work and the creative process is done by the customers themselves.

“If the client is going to pay you five times the normal fee to sit and make their own plan in your office, how would you stage a ‘build-a-plan’ experience and charge five times the fee?” said Kitces. “That has nothing to do with the expertise.

“We want to be in the business of building plan experiences,” said Kitces. “Clients are steering the experience. We’re guiding them through the process. Build-A-Plan for a young couple would revolve mostly around cash flow and figuring out where their money is going. For a retiree, it would be to help them find a vision of what retirement looks like.”

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