When my partner and I left a wirehouse to start our fee-only RIA firm in 1994, we had to explain our advisory fees, which had previously been embedded in products. To our surprise, prospective clients didn't blink when we brought up the issue. We quickly became adept at explaining the fee in plain English, and then we took it a step further: We educated clients on all the fees - explicit and implicit - associated with any particular investment.

I came from the institutional side of the industry, and I understood how the large firms made money. This became a differentiator for us, because we were teaching investors about industry practices - and in the process, showing that their current advisors often weren't disclosing all the ways their firms were profiting. Closing the sale became very easy, and we gained a great deal of trust due to our educational approach.

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