Should We Raise Fees on Legacy Clients?

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

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Dear Bev,

We are having our best year ever. Last year was previously our best year. We are up in terms of AUM, overall revenue, and fees. However, we have a number of legacy clients who are on old fee schedules. We want to bring them into alignment, so we are fair to all clients.

The issue is that some of our advisors believe this is unnecessarily “greedy” (that is the word that is being used) because the firm is doing well overall. We have been able to profit-share and offer significant bonuses. The partners, including me, believe this is exactly the time to implement the fee increase. Our returns are incredible, and clients are very happy. In some cases, the fee increase will be nominal. But in some cases, it will be a 100% increase when a client has been here for 25 years or more.

Is there a way to negotiate a middle ground with my advisors? I don’t want them to do something they believe to be unethical, but we have to make decisions despite whatever conditions are going on in the market.