Stop Undervaluing Your Firm: It’s Time to Upgrade Your Pricing to Reflect Your Services

Pricing. It’s one of the most overlooked levers in your firm’s valuation arsenal. Yet too many advisors treat pricing as a fixed back-office function rather than as a high-stakes leadership decision that directly impacts enterprise value, profitability, and market perception.

According to the latest March 2025 data from Cerulli Associates, asset-based fees continue to represent nearly three-quarters (72.4%) of all advisor compensation. This is despite the fact that our industry has dramatically evolved over the past two decades. Firms that initially started as portfolio managers now find themselves offering broad-based financial, retirement, tax, and estate planning services, as well as managing family dynamics, coaching and educating the next generation of inheritors, and acting as their clients' financial quarterback across multiple generations. 

However, very few firms have adapted their pricing structures to match this new reality. The truth is that most advisory firms simply don’t charge enough—not because clients can’t afford it, but because the firm hasn’t invested the time to define, communicate, and defend its value. 

Your pricing reflects your perceived value (and vision)

Rather than demonstrating humility, underpricing actually conveys the perception of reduced value. You cannot claim to be a premium firm and charge discount firm fees. This is something that Michael Kitces refers to as the ‘fee confidence gap.’

The 1% AUM fee has become so ubiquitous across the industry that even firms that offer specialized tax, estate, philanthropic, and other planning services (far beyond the ordinary), along with a white glove, concierge level of personalized support, find themselves reluctant to charge additional fees for that exceptional service.

But the interesting aspect they often overlook is that when you charge fees that accurately reflect the full value of your firm’s high-quality planning, investment management, and intergenerational guidance, you generate additional revenue and free cash flow that empowers you to:

• Attract, hire, and develop more team members.
• Reinvest in the business to improve advisor and client technology, as well as to expand the services you offer.
• Increase your sales and marketing efforts to enhance the business's bottom line.

Pricing tells a story about your business. If your fees don’t reflect your level of service, clients will notice – and not in a positive way. It’s more than just a revenue mechanism; it funds advisor compensation, supports team development, drives firm-wide reinvestment, and shapes future valuation. Moreover, it’s one of the clearest reflections of who your firm is designed to serve.

The better you understand your ideal client, the easier it becomes to craft a service offering that aligns with that audience’s exact needs. In fact, research conducted by Kitces shows that advisors who’ve developed a niche-focused business earn, on average, $660,000 annually compared to their generalist peers, who earn $142,500. It’s a startling dichotomy.

Perhaps most importantly, underpricing your services dilutes the overall value of your business. So, where do you start when you finally decide that some changes to your pricing model are necessary?

The Three Cs of Strategic Pricing

To create a pricing strategy that evolves with your business, you’ll first need to master three fundamental pricing elements:

1. Clarity
   What are clients actually paying for? Can you clearly articulate the value they receive in writing? More importantly, can you connect your pricing to specific outcomes that truly matter to the client?
2. Confidence
   Can each advisor on your team articulate your pricing structure confidently, without discounting or apologizing? Do they grasp how to position the firm’s value with conviction?
3. Consistency
   Are pricing decisions standardized across the firm, or is each advisor making independent decisions behind closed doors? Inconsistency undermines both credibility and scalability.

Without clarity, confidence, and consistency, pricing turns into a liability instead of a strategic asset.

What Elite Firms Are Doing Differently

Some of the most successful, high-growth advisory firms have been at the vanguard of evolving their pricing strategies to better align with the complexity and sophistication of their client relationships. Some of the shifts we’re beginning to see more frequently include:

• Charging premium basis points for premium service models.
• Adding flat annual planning fees alongside AUM fees for more complex needs.
• Offering project-based pricing for specific planning needs, including liquidity events, generational wealth transfers, or philanthropic planning.
• Providing written engagement summaries that effectively communicate the firm’s value – beyond basic line-item invoices.

But these firms aren’t just raising their fees; they’re aligning their pricing structure with outcomes and building scalable, enterprise-ready models. The simple reality is that if your service offering has steadily grown in complexity over time, your pricing should reflect that—not arbitrarily, but intentionally, based on the value you deliver, the clients you serve, and the future you’re building.

Alongside AUM fees, an increasing number of advisors are now adopting various fee-for-service payment structures, including flat fees, project-based fees, hourly fees, and/or monthly retainers. Any of these can be structured and tiered to best meet the needs of both the business and your ideal clients, while ensuring you receive adequate compensation for the specific services you provide.

Remember that pricing is not just a number. It’s a leadership decision. It reflects what you believe your work is worth, shapes the trajectory of your firm, and most importantly, signals to clients and the market who you are.

Coaching Questions

1. What does your pricing reveal about your firm, and is it the message you wish to convey?
2. Where are you delivering more than expected and charging less—and how long can you maintain that difference?
3. What changes would you need to make in your service model, client communications, or team training to confidently raise fees this year?

About ClientWise LLC

ClientWise is the premier business and executive coaching firm working exclusively with financial professionals. We specialize in helping clients optimize growth and maximize revenue by engaging as a knowledgeable partner in accomplishing specific and significant business results. Our full-service coaching program empowers financial advisors, wholesalers, managers and executives to enhance performance through customized, action-oriented solutions based on each client’s specific vision and situation.

Our certified coaches are members of the International Coach Federation (ICF). They adhere to ICF’s strict code of ethics and have the experience and insight to work with you on the unique challenges and opportunities you face each day.

Drawing from an in-depth knowledge of the financial industry, ClientWise’s mission is to professionally develop industry leaders and consistently raise the bar for industry service, commitment and integrity. Simply put, our singular focus is to help you get clear, get focused, and get results.