Rick Telberg in his article titled Four Steps to Getting the Fees you Deserve gave four tips I believe were directed to certified financial planners (CFP’s), but I believe apply equally to all engagements of service providers.
- Don’t procrastinate – (when discussing fees) Not only for CFP’s but for all of us. Always discuss the fee up front. Establish the value and scope of the service up front. No one likes surprises. Especially clients.
- Present the fee structure clearly
- Put your fees in context – “This might be a good time to explain what you are delivering for the fee”. I couldn’t agree more. By defining the scope you’ll avoid misunderstandings and establish each party’s responsibilities.
- Put it in writing – “Make it clear you’re not hiding anything”. We use a fixed price agreement which defines the scope, performance guarantee, responsibilities, and the fee. It is an addendum to the engagement letter for specific services.