Running the firm
Pricing by imitation is how firms end up underpaid
Most new firms adopt the schedule they inherited. That number was built for a different cost base and a different service.
Published
The default
Copy the previous firm, or copy the industry convention. Both are anchored to businesses with different economics from yours.
Start from your cost of service
What it actually costs you to serve a client properly for a year — your time, staff time, technology, and the compliance overhead attributable to them.
Most founders have never computed this, and are surprised by it in both directions.
The first hard-to-reverse mistake: pricing low to win early clients
It works, and those clients are with you for a decade at that price. Raising fees on existing clients is possible and it is the least pleasant conversation in the business.
Better to discount explicitly and temporarily, with a stated end, than to set a low price permanently.
Every early client priced too low is a decade-long decision made in a month when you needed revenue.
The second: a schedule with no minimum
Small accounts consume nearly as much service as large ones. Without a minimum, the bottom of the book is served at a loss, subsidized by the top.
A minimum fee is easier to introduce at the start than to add later.
Complexity, not just assets
Two clients with the same assets can require very different amounts of work. Pricing purely on assets guarantees systematic mispricing in both directions.
Some firms price on complexity, some add a planning fee. Both are more honest than pretending assets measure the work.
Decide what you will not negotiate
Before the first prospect asks. A schedule that always moves is not a schedule, and staff cannot apply a policy that the founder overrides.
Then say it out loud early
See how to talk about fees. The pricing decision and the pricing conversation are different problems, and firms conflate them.