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This episode is sponsored by Calibrate iq. First, a disclaimer. In the interest of being transparent, I created Calibrate iq. It's my app and I built it because I wasn't satisfied with any of the other risk tolerance tools on the market. I found that other tools didn't work the way I wanted them to. They focus too much on risk preference rather than time horizon. They're clunky and overcomplicated and they're too expensive for what they do. And they aren't user friendly for clients. I designed Calibrate IQ to be simple, easy to use and low cost. It lets you send a single magic link to any client you want to survey. Clients fill out a simple survey that takes less than two minutes. Once that's done, you can automatically generate an investment policy statement instantly and deliver a beautiful branded report to the client. It lets you customize reports with your logo and brand colors, and you can even add your own custom investment preferences to the questionnaire. If you're tired of expensive risk tolerance tools that overthink the process, try CalibrateIQ. It's $9 a month with a seven day free trial. Give it a try at CalibrateIQ app again. That's CalibrateIQ app. Hey everyone, welcome to Ops and Impact where we talk operations and marketing for independent financial advisors building a lifestyle practice. I your host Michael Reynolds and today's topic is are you overthinking your pricing model as usual? This won't apply to everybody. This may apply to some of you who especially are maybe earlier in your practice, maybe you just launched your ria, you're just getting started and you're figuring out pricing. I see pricing come up a lot in conversations out there and by out there in forums and Facebook groups and communities where advisors talk about stuff like this and pricing comes up a lot. We love to agonize over pricing sometimes and rightly we're in the business of financial planning so we should be very focused on money and pricing and that sort of thing. But one thing I've noticed is that some of us love to overthink and over complicate our pricing. There's all sorts of different models we see out there. There's obviously straight aum, which honestly I like. It's super simple. There's flat fee which is what I typically do. I've got both an AUM and a flat fee model. The vast majority of my approach is flat fee though, and I see other models out there too. I see where you maybe disconnect the financial planning fees from the investment management fees. And you've got different pricing levels based on that. Others have different pricing packages, or they may be priced based on complexity, or they do custom quotes based on different aspects of what. What's going into the planning relationship. So I've seen all sorts of things. So my goal is to be the Chipotle of pricing. And here's what I mean by that. So first of all, I like Chipotle. I eat there a lot. It's tasty. Also, I love what, I love how their pricing is structured, how their service is structured. Basically you go there and you can get three things. You can get a burrito, you can get tacos, you can get a bowl. Yes, they have quesadillas too. But really the three main things are those. So you pick what you want and then, boom, you check, pick chicken or steak and then you go through and pick what toppings you want. It's super simple. There's not many choices to make. When you're ordering a Chipotle. It's like, boom, quick and easy through the line. Not a lot of overthinking there. I remember back in the day when I owned my marketing agency, my office was next to a food court and my team and I would go grab lunch across the street all the time at the food court. And there was a Chipotle next to a witch. Witch. Which witch is a sandwich shop? And I think they're still around, but which witch was right next to Chipotle? And I would see the Chipotle line moving quickly and smoothly and no bottlenecks. And it was just super simple. It just kept moving and it was very. A well oiled machine kind of process. And then next to it, I looked at which witch. And one day I tried to order it. Which witch? I was curious to see what it was like. And so I went up there and they handed me this piece of paper full of just. It was just densely populated options in there. It was like a paper full of so many different options and boxes and things to check. And it was just really dense kind of instruction sheet. And I was instantly overwhelmed. And they told me to make my selections and then bring it back to the counter and hand it to somebody and then wait around and they would call my name. And I was instantly overwhelmed. So I tried to pick out my selections. I tried to figure out how to price it or how to put my sandwich together on the sheet. And I didn't really understand the pricing either. I couldn't tell how to add things up the right way to make it work. And I had no idea what was going on. And so I gave up. Actually, I never actually ordered. I was like, this is done. I'm done. I'm not going to do this. And so my goal is to always be the Chipotle of products and pricing. I really want to make it easy to understand. So does that mean you have to do straight AUM or you have to do straight flat fee, like. Like I do? No, not necessarily. But my mantra is always going to be simple service, simple pricing. I really don't want to overthink it. And so what that looks like in your case is going to be unique to you, obviously. But I would encourage you, especially if you're earlier in your practice, you're just starting out, you want to remove as much friction as possible from inviting a prospective client to say yes. You don't want to have to spend a bunch of time calculating pricing with them or explaining how pricing works or saying, if you do this, it's this, but if you have this level of assets, it's this. And we separate the planning from investments. And here's kind of, you can pick one or the other. And sometimes we invite people to pick and choose because we itemize our pricing too much. And whatever that looks like for you, I would really encourage you to try to make it as simple as possible so that you don't have to spend a lot of time explaining it. There's a lot of. There's a big battle out there. I know about AUM versus flat fee, or AUM versus other models, and I don't care about any of that. I think the fee debates are ridiculous and pointless. I have zero interest in engaging in a fee debate. But I will say I like aum. It's simple. It's easy to understand when you say, hey, I charge 1% of your assets, or I charge 0.8% of your assets, and boom, that's it. Super simple. Clients can say, okay, I got it. Let's move on and talk about something else. Or if it's like, hey, my flat fee is $8,000 a year, and it's built from investments. Super simple, all inclusive. Okay, I like that. It's simple. It's very easy to understand. And by the way, this is a side note, I'm going to inject a little bit of a bonus thought into here. I really like the model where fees are billed from investments. So this is a whole separate soapbox I'm probably not going to do an episode on, but I do want to inject it here. So I have a bias and I admit it. Not everybody agrees with me, plenty of people disagree with me. But my bias is that if you can get your fees billed through investments, whether it's flat fee or aum, that's preferable. Because honestly, clients are used to that. The vast majority of financial advisors out there just take the fees from investments and consumers are used to feeling like they're not paying directly for it. Not that we're trying to hide anything. Absolutely not. I want to be clear about it. But if a client is paying every month or every quarter through their credit card or a checking account, they really feel it. It's an expense, it's constantly going to be on their mind. But if it's built from investments, it's sort of, it's less friction, it's just easier. They don't to worry about it. So if at all possible, I really like to bill through investments. It's much easier. And I think it's better for the client because they're not always going to question the fee. They're going to get the value without the self sabotaging question of oh, should I be paying this? They're getting the value, they're getting advice, they're getting help, and they're not tripping over the concern of fees necessarily. I really like that model. So anyway, back to the original point. Simplicity. That is what you want to go for when it comes to products and service and pricing. So again, especially if you're early in your practice, take a look at your pricing, take a look at your fee models, take a look at your service offerings, are they complicated? Do you have to spend more than five seconds explaining it? If you have to spend more than five seconds explaining it, I would bet it might be too complicated. And again, if you're well established and you've got a complicated pricing model that's working well for you and there's no problem with it, fine, don't listen to me. That's totally fine. But I'm talking more to advisors earlier in their journey who are just starting out. And I've talked to quite a few recently who have. We've talked about pricing models and we've come up with a way to simplify it and just make it easier to understand. Because again, when you're first starting out especially, you want to remove as much friction as possible from the process and you want to remove as many barriers as you can from your client or your prospective client saying yes to working with you. So get friction out of the way, remove barriers, make it easy, make it simple, and make it so easy to understand that you don't spend really any time explaining it. You can focus on other things. So that's my soapbox for the day. Don't overthink your pricing. Keep it simple. I don't care if it's aum, I don't care if it's flat fee, whatever it is, try to keep it as simple as possible and provide that Chipotle ordering experience as opposed to the witch witch experience. Nothing against either restaurant. That's just the example I use. So all right with that. Thanks for joining me today, as always. If you'd like to reach out and find me on my consulting site, it's michaelreynolds.com you can send me a message there. You can send me voice memos for free. There's no charge for that kind of asynchronous kind of feedback or sounding board I offer. Or you can join my private community. We've got new members joining every week and there's a ton of stuff in there that I think will give you a lot of value. So feel free to find all that stuff@michaelreynolds.com thanks for joining me. Have a great day. See you next time.