As the financial planning industry has evolved over the years, so have the relationships you enter into with clients. The way you conduct business has probably changed, and with it, perhaps without your even noticing, so has the way you engage new clients. How do you begin an advisory relationship that starts, not with a small transaction, but with asking someone to trust your leadership regarding his or her financial life? How do you ask for and win all of your clients' business—and teach others who may be partners, staff members or successors to do the same?

This question becomes vital as more financial advisors transit from transaction-based relationships to fees. You may think that this move is old hat, but that's not the case. According to Chip Roame, managing principal of Tiburon Strategic Advisors, "independent reps are not as fee-based as you might think. They talk endlessly regarding their move to fees, as do captive brokers and insurance agents, but in aggregate, these three groups have only between 15% and 20% of their clients' assets in fee-based accounts." To break it down further, Roame continues, "Independent reps specifically have 16% of their assets in fee accounts. They have 61% of their assets in commissionable mutual funds and/or annuities, so that's still their core offering." Even registered investment advisors-who are, theoretically, 100% fee-based-still report receiving 15% of their revenues from commissions, Roame says. "This means there are a couple thousand RIAs out there who still collect some trails and the like, so they are technically not yet fee-only, as are the 2,000 or so NAPFA members," he explains.

Today, many of the major broker-dealers have instituted coaching programs to help their reps transition to fees. In addition, as many advisors expand their businesses and start training successors, these new professionals need to learn to acquire clients. Although they may be well versed and academically credentialed in the techniques of planning, working with prospects and asking them to become clients may be uncomfortable. Building confidence in this area is crucial to their career development.

Whether on your own behalf or that of your staff, you are probably thinking a lot about the way you express your value to a client and request his or her business, and how this "ask" has to evolve. It's bigger, more global, than the transaction-based ask, and it's a decidedly softer sell. Arthur Cooper, CFP and founder of Irvine, Calif.-based Cooper McManus, says success is built not just on one ask but on a series of them.

Asking for a Fee

"The first ask in a successful advisory practice should be for a fee for service," Cooper says. Clients, he explains, are less resistant to the idea than are advisors. "Asking for a fee is a stumbling block in the advisor's mind," Cooper says. "Insecure advisors need to just get over that hurdle. They can watch more experienced advisors and sit in on their meetings; in return, seasoned advisors can sit in on theirs. In the end, if you do a good job for your clients, the fee is the fee: It's the cost of your expertise. And asking for the fee gets easier over time."

Rick Kagawa agrees. Kagawa has built a successful financial advisory and insurance consulting firm, Capital Resources and Insurance in Huntington, Calif., which serves mom-and-pop business owners, especially Japanese Americans who live and work in southern California. He's a CFP, CLU, ChFC and an LUTCF (Life Underwriter Training Council Fellow). He's also a top producer with Transamerica Advisors, an OSJ branch manager and an avid FPA member.

"Most of the advisors who come under my wing have a transaction-based past," Kagawa says. He offers his advisors language for changing their client relationships that goes like this: "I would like to be put on retainer to help you with your financial planning. I will also manage your portfolio and communicate with you regularly as part of that fee. This change is very important to you. What it does is put me on same side of the table as you.

"I will have a vested interest helping your money grow. If your money grows and my compensation is based on your account value, it is in my best interest to increase the size of your account. I am simply changing the way I get paid. Instead of getting paid commissions for a sale, I will get paid a fee for my service.

"Frankly, my business has grown so much that, under the sales-oriented model where I must always be looking for the next sale, I'm having trouble paying attention to my very best clients like you. I want to get paid for the service and value I bring, not for what I sell you today."