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Events ‘If a client sees you as transaction facilitator, he will not value you’

‘If a client sees you as transaction facilitator, he will not value you’

Key highlights of Kavitha Menon’s presentation from CIFA17.
Team Cafemutual Apr 3, 2017

Sharing her experience with the fee-only model at Cafemutual IFA Event 2017 (CIFA17), Kavitha Menon, a Mumbai-based RIA talks about how she convinces clients to pay a fee.

“Charging a fee depends on how the client perceives you. If he sees you as someone whose judgement he can depend on and trust, it is easy to charge a fee. On the other hand, if your clients see you as a facilitator of a transaction, they might find it difficult to accept you in the role of an advisor. For such clients, you will need a different strategy to gradually bring them into a fee based model,” she advises.

Highlighting how she overcame challenges while charging fees, Kavitha says that advisors must first upgrade their skills. “Clients will pay a fee but only when he realises what value you bring in return. IFAs must be very clear about what services they will be offering to their clients. You must internalise your offering and be able to justify how your fee proposal matches your value addition,” she says.

Talking about how to decide on the fee structure, Kavitha says, “You can base your fee on your years of experience, your practices, your skills and your qualifications. You need to communicate your value proposition along with a reasonable fee structure so that your client understands what he is paying for.”

“You also need to document and communicate performance on a continuous basis, so that the client is reminded of what he is paying for. Often it is easier to get the first cheque but the subsequent cheques for reviews need more convincing. By documenting every piece of advice and work, you do for your client, it becomes easier in convincing them to pay a fee for review,” she says.

Talking about what advisors must do to run a successful fee only practice, Kavitha says, “The most important thing to do is to choose your clients wisely. What worked for me was I approached those clients with whom I had a good relationship and who knew I had a good value proposition.”

“The next important thing is to have an easy to understand fee structure. In my case, I take a fixed fee at the beginning and review the fee only in the next year. Also in the beginning, it helps to be flexible with payments. The client is also new to paying a fee, a little flexibility will go a long way in building his trust in you,” she says.

Another important thing Kavitha has done to improve her client experience is to leverage technology. “There is no reason why paying an advisor shouldn’t be as simple as paying your mobile bill. It also helps to have a follow-up system in the CMS where reminders are sent to the client via SMS,” she says.

However, Kavitha warns advisors against giving out free or discounted services. “If a few clients leave you because you are not ready to offer a discounted service, don’t get disheartened. It is best to let the freeloaders go,” she says.

Kavitha is the founder – Probitus Wealth. She is a Certified Financial Planner as well as a Chartered Financial Analyst (India). She also holds a Master’s (MMS) in Finance. After spending prominent time with Parag Parikh Financial Advisory Services as Vice President, Wealth Management Division, Kavitha started working as an IFA. She has 15 years of experience in the field of wealth management and financial planning.

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Chayan laddha · 1 year ago
This article is really helpful for us and our businesses in future.
Prabir Sharma · 1 year ago
Simply Great & Motivation for all advisers.
Nikhil Thakker · 1 year ago
Really Good article and true we need to create value of our own
Felix Zeman · 2 months ago
Please read my provider's BG/SBLC Sale Transaction Procedure below and see if it will suit your requirements.


1.    Buyer submits Letter Of Intent (LOI) with full banking coordinates (there must be sufficient cash funds in this account), Enlarged 140% Colour copy of Passport , Client Information Sheet , Certificate of Incorporation (if applicable), Corporate Resolution (if applicable), Non-Solicitation Statement, and an Irrevocable Fee Protection Agreement .

2.    After conducting due diligence, the Seller will countersign the LOI and return it to Buyer including details of the BG Issuing bank, and Seller’s Passport copy. This LOI automatically becomes a full commercial recourse contract and will be notarized to avoid contract breach and Buyer will be required to take care of notarization expenses of the contract documents here in UK. After notarization of the contract documents here in the UK, both parties shall lodge the executed contract with their respective Banks.

3.    Within two (2) banking days, the Seller’s Bank shall send a PRE-ADVICE SWIFT MT199 or MT-799 to the Buyer’s Bank. (EXHIBIT A )  The PRE-ADVICE shall be valid for  four (4) banking days only.

4.    Within the same banking day, the Seller shall email a courtesy copy of the PRE-ADVICE SWIFT MT199 or MT-799 to the Buyer for confirmation. Within three (3) banking days after authentication of the PRE-ADVICE SWIFT MT199 or MT-799, the Buyer’s Bank shall reply and send a  SWIFT MT-799 to the Seller’s bank and a courtesy copy shall be sent  to the Seller’s email.

5.    Within three (3) banking days, after authentication of the Buyer’s SWIFT MT-799, the Seller’s BG Issuing Bank shall send the Bank Guarantee via SWIFT MT-760 to the Buyer’s Bank  ( EXHIBIT B ) and a courtesy copy shall be sent to the Buyer’s email. The Buyer’s bank verifies and authenticate the BG sent via SWIFT MT-760.

6.    Within three (3) banking days, after authentication of the BG sent via SWIFT MT-760, the Buyer shall send payment to the Seller via SWIFT MT-103 and concurrently pay Consultants commission fees of Two Percent of each tranche face value. Courtesy copies of the commission payments shall be sent to the respective consultants/beneficiaries and their paymasters.

7.    Within seven (7) banking days after authentication of receipt of payment to the Seller, the Seller’s BG Issuing Bank shall send the hard copy of the BG to the Buyer’s Bank  via Bank Bonded Courier.

8.    All subsequent tranches will be based on the same procedures until collateral or funds become exhausted.

9.    Any unauthorized calls by any party or its representative lawyers to probe or communicate in an improper way to bank(s) in this transaction shall be prohibited and contract terminated.

10. Please, Ready, Study and Understand VERY WELL, we will work STRICTLY base on this Transaction Procedure.


Contact Me Via Email:- bfltd2011@gmail.com

I look forward to a mutually beneficial business relationship.


Felix Zeman.
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