Kitces confessing to the habit he and Carl Richards were criticizing in financial advisors: capping fees before any client objects. His point is that advisors negotiate against themselves and never give a big client the chance to say the fee is fair.
…Yes, this is a thing you can optimize, but I'm more, I know, I'm, I'm, I'm more fascinated about the sentiment of anti-optimizing, right? Which is no, we're going to have a fee cap. If a client says it's more valuable, I will deny them the ability to pay me that much money. I mean, seriously,
I love this. It's a great conversation because I, yeah, we
or for those of us who maybe don't do a cap, but we have some version of it. Uh, I just got a right, how many people have some version of this? I just got a prospect. It's by far the biggest one I've ever had. And I just made up one or two new breakpoints on my schedule that didn't even exist before because I took out my current fee schedule and I did the math on what the client would pay. And I felt so mortified that the client would pay that much money that I just immediately started reducing what my fee is going to be with new breakpoints. I haven't even talked to them about it. They haven't even told me they don't like it. They might have even looked at my fee schedule, already figured this out and called me anyways because it's not a blocking point for them. But I have voluntarily taken steps to reduce what this person would pay before they even have the opportunity to say, I believe you are that valuable and I am quite happy to pay you that and more.
Yeah, I love this because like, yeah, I know it seems, I don't know if it's increasing in frequency, but it does seem like I've been told by more people just in passing, like min and max fees, right? Like we've got a minimum, we've got a maximum. Yeah. And I've always wondered about that maximum…
or I feel like it's going to make more profits, right? I mean, I guess there's two verses. You know, it's going to be a more profitable relationship than I need because I've got enough. Yeah, it's going to be a more profitable relationship than I think is morally acceptable.
Okay, so morally acceptable, let's get to that one in a minute. I do, I did one time. I remember I developed at least some framework for me. I had to fit it in a graph, and it had to be on a Sharpie and cardstock. And all it was was what I could charge. And then, you know, you know, it was just a…