The best method of establishing what the trusted advisor will be paid while clarifying to clients what they should expect to pay annually for comprehensive financial services.
 
The goal of structuring your compensation is to allow for you to deliver comprehensive financial services to your entire Ideal Client community through a Deliverables Team of Subject Matter Experts in a way that fully funds your future goals by their target dates with plenty left over to live the ideal life you desire.

Unfortunately, most financial advisors establish their compensation rather anecdotally. In many cases advisors allow investment programs they utilize (turn-key asset management programs, mutual funds or other products) to establish compensation amounts to be paid to the advisor. Once you set your Ideal Client Profile you should then establish the number of Ideal Clients you want to work with to actualize your own personal goals.

The place to begin your thinking for establishing your maximum number of Ideal Clients is to contemplate the most valuable thing of all: time. 

• Let’s say, hypothetically, that you would like to work ten months per year and devote the other two months to things you value greater than money
• Let’s also say you do not want to work over 36 hours per week when you are in the office.  Perhaps, three 12-hour days per week from 7:00 A.M. to 7:00 P.M. Tuesday, Wednesday and Thursday, allowing Mondays and Fridays off every week you are in the office.
• Finally let’s say you have established with your Deliverables Team that to implement The Three Meeting Process™ it will require 5 ½ hours per meeting for each Ideal Client (including meeting time, prep-time, orchestrating Deliverables Team Members, and occasional interactions directly with clients in-between meetings).

So, with these variables, we may now do the math:

• 10 working months = 43 weeks
• 43 weeks X 36 hours per week = 1,548 working hours per year
• 5 ½ hours X 3 meetings per year = 16.5 hours per Ideal Client per year
• 1,548 hours per year ÷ 16.5 hours = 93
  

In this hypothetical, the maximum number of Ideal Clients this Trusted Advisor desires to work with is 93. (An important number you’ll need before you establish your compensation.)

The two compensation structures recommended in the Trusted Advisor Toolkit are:

1. Client-Value Based Method
2. Cost-Based Method

The Client-Value Based Method establishes what’s possible; while the Cost-Based Method ensures that you are compensated well-above your costs so that your business model is both highly-profitable and sustainable.

Leave behind any limiting beliefs that may derail you from establishing your ideal life, such as:

• Clients like that don’t exist where I am. By definition they do, since your Client-Value Based Method compensation exercise focuses upon your Potential Ideal Clients)
• My Potential Ideal Clients don’t value their time as much as people elsewhere.
• Financial delegators can’t be found
• I can’t ramp-up my value quickly enough to earn what’s possible.

Focus on what you can control and understand that your Potential Ideal Clients are the same as people everywhere.

Rick Barrera, author of Overpromise and Overdeliver, refers to this phenomenon in the client’s mind as “radical differentiation.” What you are offering to Potential Ideal Clients is something so far-and-above superior to anything these people have ever seen or imagined, you are placed in a separate category from other financial advisors.