Fees = greater understanding?
With the 31st December deadline fast approaching it will be interesting (to outside observers at least) to see how some firms cope with the transition to a fee based model. Many of the firms we already work for have been operating in such a way for a while, but it is clear that for a large section of the market it will be a very different world.
What will be particularly interesting is whether the move to fees will result in a greater understanding, and thus relationship, between financial planning organisations and recruitment practices such as Exchange Street. One of the most notable aspects of the past few years has been the reduction in the fee levels that recruiters charge, prompted by many of the firms that we serve looking to restrict costs. Whilst as a business owner I entirely understand this approach, a recent article in one of the trade publications focused on the fear that many IFAs have that clients will simply compare costs, rather than the value, of the service they provide.
One business owner was moved to say that he hoped that the industry does not undersell the level of service they provide, whilst Chris Hunt of Aifa was moved to say “price comparisons work where the product is the commodity. But if it is about an adviser building a long-term relationship… that is something different.”
With that in mind, will the changes bring about an appreciation that whilst certain recruitment firms charge low fees it does not necessarily follow that they are more cost effective? We all remember the ‘reassuringly expensive’ tagline of a notable beer manufacturer and whilst we stop short of that somewhat smug message, we do have to constantly battle to make sure firms know that quality costs.
Those firms undertaking a truly consultative approach, taking time to speak to companies and candidates alike, are always going to have to charge more than the more volume based firms who often don’t even inform their candidates that their CVs are being sent around the market. Perhaps when faced with clients who suggest that they can get the ‘same’ advice more cheaply down the road, business owners may well have a slightly different conversation with recruiters when it comes to discussing our fees.