For the better part of a decade, the financial services industry has anticipated the coming of fee compression, mainly due to the rise of robo-advisors offering low-cost automated wealth management services. Yet even though fee compression has not been fully realized to the extent the industry has generally expected, lower cost robo-advisor services have still compelled financial advisors to maintain relatively low fees. But when advisors continually add services as a means to differentiate themselves from other advisors, keeping fees low can prevent those advisors from maintaining high-quality talent and services, not to mention being able to reinvest in the business to grow and scale.
In our 101st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the challenges advisors face in setting fees commensurate to their service offerings and the importance of charging sustainable fees to help businesses flourish.
As a starting point, it’s important to understand that staying competitive doesn’t necessarily mean advisors need to have the lowest fees. Many advisors have focused on obtaining deeper levels of expertise in broader areas and offering more in-house planning services in those areas (e.g., tax and estate planning) to differentiate themselves. Yet, in order to sustain these value-added services, advisors need to be able to offer competitive salaries to retain the talent responsible for providing them! Which is important, as salaries have become more transparent, enabling employees to find positions that will offer them the salary compensation they feel they deserve. However, advisors who feel obligated to keep their fees low but who also feel the need to continually add services to justify their fees often risk losing employees (especially the ones that are most talented!) and create more challenges for themselves to maintain ongoing success.
Importantly, reflecting on the quality and types of services they offer can help advisors identify the right (i.e., accurately comparable) industry benchmarks to compare themselves with, so that the fees they charge for the services they provide are in alignment with what they are actually worth. And advisors who offer premium services can justifiably ask for premium fees, which means it can be completely appropriate for firms that go above and beyond to adjust fees higher than what they may have been originally charging!
Ultimately, the key point is that advisors who offer above-average services should be compensated accordingly, which may require charging above-average fees. And while raising fees may feel scary for advisors who fear they may be asking for unreasonable prices, it can be worthwhile to consider that a small step increase of just 10% (e.g., asking for 1.1% AUM instead of 1.0%) can still yield a significant rise in revenue that would provide capacity for better services, talent, and tools. Many advisors join the industry to help clients achieve their financial goals, and by charging the right fees that are commensurate with their expertise and value, they not only position themselves to remain competitive, but they also ensure that they have the means to sustainably grow their businesses!
***Editor’s Note: Can’t get enough of Kitces & Carl? Neither can we, which is why we’ve released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.
Kitces & Carl Podcast Transcript
Michael: Good afternoon, Carl.
Carl: Greetings, Michael Ernest. I get it?
Michael: Ernest, yes.
Carl: Michael Ernest Kitces, so glad that you’re here.
Michael: All right, so I’ve got to ask, so what is your middle name, Carl?
Carl: As long as you promise to call me this every time you address me from now on. David Carl Richards III.
Michael: Wait, David Carl? Carl is your middle name?
Carl: Yeah. No, but you have to…every time from now on. I told you…
Michael: David Carl Richards III.
Carl: Yes, that’s it from now on. You’ll have to address me…
Michael: David Carl Richards III. I feel like this is kind of a breakthrough moment. How many people listening had no idea that Carl was actually the middle name?
Carl: Yeah. It’s because I’m a third. My grandpa went by Carl, my dad went by David. I had to go by Carl to avoid family confusion in the household. I expect now at conferences, I expect to be greeted by David Carl Richards III.
Michael: David Carl Richards III. All right. That is definitely how I will introduce you at all conferences in the future.
Carl: Yeah. Sounds slightly royal.
Michael: It does sound slightly royal.
Carl: Yes, exactly. We have stopped…Just for anybody who’s aware or concerned, we have stopped such traditions. David goes back eight generations. So, my son is Samuel David Richards to continue that. But we thought David Carl Richards IV was just too much pressure, whatever. We’ve stopped it. But that’s not what we’re here to talk about today, Michael.
How The Fear of Fee Compression Has Shaped Advisor Service Offerings [01:47]
Michael: No, that’s true. That’s not what we’re here to talk about today. For the discussion, I wanted to talk about a really interesting conversation I had with a longtime advisor friend a couple of weeks ago. So, say his name is Connor to protect the innocent. So, Connor’s been running an advisory firm for a long time, closing in on a billion dollars under management. So, sizable firm, has had some very good growth over the years, but is having some challenges these days, and his challenge is, as the talent shortage keeps kind of amplifying for the number of experienced advisors out there, he lost two really good advisors over the past year and a half who’d been with the firm for a long time, who hopefully were going to be future partners, future successors, although obviously now that is not working out.
And so, the conversation that had come up was sort of this what is the future of our industry in the model where, as Connor puts it, “We’ve always had a really high-quality service to clients, very good advisors, very sophisticated advanced people doing really good financial planning work for their clients. But I don’t know how to pay at the level some other firms are paying. I don’t know how to stay competitive to keep really good talent in. I really think we give a very high-quality offering, but just can we even sustain this in the future?” We always, unfortunately, just have a little bit of a negative conversation.
And so, I said to him, “Well, just look if you, not to be crass, but if your advisors are that above average, were you paying them above average? If they were that good, were you paying them at that level?” And he said, “I can’t. Just the math of an advisory firm only goes so far at the end of the day.” He was like, “I paid them well, but I can only go so far and fit the cost of an advisory firm and the tech and the rest of the staff and the people and the service and the rest.” And just, you could only pack so much into a 1% AUM fee for a million-dollar client. That’s kind of their bread-and-butter clients.
So, I’d said to him, “Well, have you ever thought about raising your fee? If you charge 1.1 or 1.2, 1.2, just your revenue would shoot up 20%. I could do the rough math on his firm. That’s going to add a million or $2 of revenue for you. You take another 1 or 2 million dollars of revenue, you could put another $100,000 towards each of your advisors and still have money left over. And now you’re paying them a well-above-average rate for what you’re saying is an above-average service. What’s wrong with this? He said, “We can’t do that. We can’t charge 1.2.” I said, “Why not?” And that was like the question. Why not? We’re all so focused on… The going rate is 1%, and if you want to be a good deal for consumers a lot of firms are trying to get in under 1%. So, we get break points at 90, 80, 70 bips going down.
But I thought of this question. For a firm like Connor’s, who I think legitimately was making the case, we give an above-average high-quality service. I know a lot of us say that as advisors. I know a good amount of Connor’s firm. I think it’s actually legit for them, of just depth of expertise, depth of knowledge, depth of service for what they do. If we’re that good, if you’re that good, what’s wrong with proudly charging…? I’ll call it 1.2 just to make the math easy. Or heck, we’ll call it 1.1, 10% more than the proverbial 1% fee. What’s wrong with charging a premium?
Carl: Look, there’s so…
Michael: So, maybe that’s rhetorical because I don’t know if you’re going to disagree or be on board with it. But that is…
Carl: Yeah, there’s so many things to talk about.
Michael: …the question I will pose for today. What’s so wrong with charging 1.1 or 1.2 and not 1?
Carl: Right. So many things I have. One thing I’m really curious about is the word wrong. And I just want to sort of talk about this. And you’ve run into this, this morality around… It seems like it’s almost generally around AUM fees, right? There’s something…
Michael: Well, I’m not even… I won’t even open on just sort of the morality of AUM versus flat fees, which we can do. That’s a whole other discussion for another day. Even just within that realm, if we’re going to be there, what’s so wrong about charging 1.1 or 1.2?
Carl: Hey, there’s tons of stuff to talk about like that, but before we go there, I got to ask this question. What about fee compression? What are you talking about charging more? I know 1% is going to go away. We’ve been hearing about this every year.
Michael: What fee compression? We started this conversation about fee compression 10 years ago. Robo-advisors show up 10 years. It’s 2022. They started in 2012. Actually, they started a few years earlier, but they hit the mainstream and the media in 2012.
Carl: I think that’s year the Behavior Gap was published. Ten-year anniversary behavior app.
Michael: Ten-year anniversary of Behavior Gap. It’s been 10 years that we’ve been talking about how fee compression’s going to obliterate the same 1% fee that we were talking about 10 years ago. Matthew Jarvis is out talking about how he raised his advisory fee on all his existing clients to 1.5.
Carl: Oh, no, don’t even… Never mind. Yes.
Michael: And he’s running his business, and clients didn’t flee. He’s giving a service. He’s got a lot of value adds he provides. You can hear his Perfect RIA podcast to talk about it more. But I think that’s an even more fascinating conversation. I’m not going to egg everybody on the chart, talk about charging 1.5, we’ll just say go to 1.1. I want to end just there. But the point is the same. And frankly, when you look broadly at the advisor benchmarking studies out there, what you see, this has been showing with studies year after year after year for the past five years, there are more firms that talk about raising their fees than lowering their fees.
Carl: What’s the disconnect? So, everybody running around waving their hands saying, “Fee compression, fee compression, fee compression.” There are smart people saying this too, but fee compression, what’s the disconnect? If for 10 years we’ve been worried about this and it’s not happening, what has happened?
Michael: Well, so frankly, I think what has happened is a version of what Connor is going through as well. Our fees aren’t getting compressed down… So, look, if the end game is…it’s 30 to 50 bips or 25 basis points for portfolio management, like a robo-advisor and that’s the business we’re all going to be in, we’re all screwed. None of us are competing with a technology firm that has 200 engineers and $100 million of venture capital. We will never, ever, ever win that battle. It doesn’t even make sense to swim in that pond or fight that fight. So, what’s happened instead is we’ve all said…I don’t… A robo… Technology just manages your portfolio, do-it-yourself self-service. There’s no one to talk to you, there’s no financial applying, there’s no expertise, there’s no deeper knowledge, there’s no skilled person, there’s no relationship.
I, we, as advisors provide all that stuff. That’s why we’re worth 1%. And to me, in essence, what has happened is you said, look, if I’m a 1% wealth manager firm, I can’t compete with a robo at 30 to 50 basis points. What I can do is value-add my way up to justify my 1%, to defend my 1%. And so, we see more expertise, deeper expertise, huge growth in CFP certification, huge growth in advanced designations like CPWA, firms that are rolling on tax services, firms that are bringing estate planning in-house. We’re value-adding our way up, and so what happens is we don’t charge the same 1%, but there is pressure on our margins. We have to do more to earn the 1% fee. And to me, that’s a version of what Connor’s going through as well. Yeah, 10, 20 years ago, I just could have hired random person who was reasonably knowledgeable about investments to answer the phone when a client called, and now I need CFPs with all this expert knowledge to have financial planning with deep relationships ongoing with clients.
I do think it’s fair to recognize, we have to do more to justify the fee than we did in the past. But to me, the interesting phenomenon is, so some of us have so overshot doing more to earn the 1% fee that the truth is probably we’re doing more than what a 1% fee is worth. We’re doing 1.1% worth of fee. We’re doing 1.2% worth of fee, not because we’re doing what a robo did 10 years ago. He ain’t getting away with 1.2 or 1 or anything for that. But for a deep holistic firm that has financial planning knowledge and tax knowledge and you’re doing returns for clients and giving white glove service and having all these deep relationship meetings and two to three advisors on every team, double and triple teaming every single client to make this hugely deep enriching relationship. Maybe that’s actually worth more than 1.
Carl: This is literally my… I knew this is what was going to happen. I feel like this is one of those subjects that I can just put a quarter in you and off you go. It’s so good.
Michael: I like defending our value.
Carl: No, I agree.
Why It’s Okay To Charge Premium Fees For Premium Service [12:15]
Michael: What can I say? And look, for anyone out there who wants to take a swing at the AUM model, that’s fine as well. It’s not really about the AUM model, but fine. And if you want to be on a retainer model, where’s the advisors charging $1,000 a month, $2,000 a month? We can do this in a premium version on the retainer model as well, where a lot of advisors are charging $200, $300, $400 a month.
Premium services can exist anywhere. The core question to me is we’re doing all this value-adding to lift up, and as Connor’s experience, it starts to squeeze. If I want to provide above-average service with above-average advisors who have above-average expertise and I’m charging the average fee, it’s hard to deliver above-average value for an average fee. That squeezes your margin. It’s kind of the mathematics of business. But when you look in any domain outside of our financial services realm these days, I am aware that when I want the premium service from the Ritz-Carlton or the Four Seasons, I don’t pay the same hotel fee as the Hilton Garden Inn. There’s a difference in the price. And so, I make my decision about whether I want to buy a premium service or not, but as you can certainly see out there in the landscape, there are plenty of people that want to buy premium services in a wide range of goods and services. No reason why we can’t have that in our domain as well.
But I thought it was an interesting example in the context of Connor, because here’s a firm that really is above average expertise, above-average services, above-average advisor depth, above-average capabilities, but he got stuck in his business because he was anchored to the idea that we could never charge an above average fee, even though everything else we do is above average, and it was undermining his business because he really got stuck challenged to pay above average advisors above average wages. And when he had to pay above-average advisors average compensation, someone picked them off, because it’s a competitive talent market.
Carl: Yeah, totally. And look, I was in jest about fee compression, because I hear the same thing. And literally in the same day, I had somebody super smart who invests in big RIA firms tell me that fee compression is going to eat everything. And in the same day, I had a conversation with an advisor that just moved their retainer to 50 grand a year, right, and has a waitlist. So, it’s just a fascinating thing to try and resolve those two. And I have always felt like if fee compression is absolutely true, if you’re just doing 17-question risk-tolerance questionnaire and out pops a portfolio like we were doing back in the day. And security selection, asset allocation, those things are not worth 1% anymore. But I’ve always thought that the solution to fee compression, and especially the solution to… So, I’ve been saying this for 10 years. The solution to robo-advisors is for the advisor to be more human, right? And I think add to all the skill you’re talking about, you add empathy, the ability to listen, goal clarification over time.
There’s clearly, clearly a difference between the value that a real financial advisor’s adding and the value that somebody who’s still stuck in the old days. So, yeah, so then when you get there, let’s say you are one of those people, like our friend… What’s his name?
Carl: Connor, okay. Connor. Yeah, Connor. So, like our friend Connor. So, then what’s interesting is just the mindset around that, right? Because now we know it’s 100%. It’s so fascinating. It’s just the thinking around it, because there’s so much thinking. This is the most contentious subject on Twitter among financial advisors. It just makes me laugh when I go in and watch. How much do you want to debate and argue how or what to charge? So, there’s already so much thinking in your way around the idea. No matter what you decide, there’s thinking in your way, let alone the idea of charging premium. But I think the best example is the Hilton Garden Inn and the Ritz-Carlton. There’s no right or wrong. What’s wrong is for the Hilton Garden Inn… It’s not even wrong. But what will not work is for the Hilton Garden Inn to charge the same price as the Ritz-Carlton.
Michael: Well, and to me, just, even when you get beyond that, when you look at this idea of fee compression, to me just, it never takes into account… The people who look at it never seem to take into account the way that we value add up along the way. So, great. So, take it out of the financial services domain. Seems like a lot amount of people are… Ten years ago, a starting iPhone cost 200 bucks. The iPhone 4 was a $200 phone. That was the base model. Now, you would think with 10 years of technology advancements and Moore’s law of making computers exponentially more powerful and batteries compounding exponentially, all the components in theory should have gotten exponentially cheaper. And if iPhones were $200 10 years ago with the advancements in technology doubling 18 months, in theory, that iPhone should cost 20 bucks now, but instead what’s happened, we’re coming up on a thousand dollars…
Carl: Over a 1,000. The 14’s…
Michael: …for starting iPhone brands. Now, it’s because it’s like a bajillion units more powerful than a phone 10 years ago. But that’s the point. All the components got cheaper, everything had improved exponentially, productivity blew through the roof, yet the darn thing cost 5 times what it did 10 years ago because they added that much more value than…and it was more than enough to offset fee compression and price competition and everything else that was baked into the evolution of iPhones.
And I see a similar thing playing out with financial advisors today. Those of us that are going deeper into really providing the advice services and the relationship and all the different value adds, with the caveat that we’re timid or fearful or afraid to charge more or outright scared or attacking each other because, air quotes, “You’re a bad advisor,” if you charge an above average number. And look, we’ve all seen the bad advisors out there who charge an above-average fee to provide very below-average service. Many of us have won clients away from those advisors and we win them away in part because they’re charging a lot of money and doing very little. But that doesn’t mean it’s bad to charge above average fee. No, it’s bad to charge above-average fee and do very little. That’s different than saying I charge an above-average fee because I’m worth it, because I deliver an above-average service that’s commensurate with that fee. If you want a basic planner, it’s cool. I’m not your person.
Finding The Confidence To Charge Fees For Value-Added Services [19:32]
Carl: Yep. Yeah. And I think in the case… I was just thinking through the person I talked to with the $50,000 annual retainer. It’s demonstratable that they’re better, right? Now, obviously, that’s not something you can run around in marketing, but you could go through almost every client in this person’s business, every client this person serves, and they can tell you a story about how they…because of their deep expertise, how they’ve demonstrated… That story would not even come up. I’m thinking of a specific example. That opportunity for that nets… It was really net savings around tax and some other tactical decisions that were made would not have even been brought up by a very good normal planner that didn’t have that technical skill. So, I don’t… It’s really fascinating to me. One of the things I always thought this stems from a little bit is there is because… Again, I don’t want to get into a different types of fee debate, but I think there’s a little bit of it that comes from this. Because this… We all know that if you reduce a return, a total return by 1% over 20 years, that makes a big difference. So, there is always this weird feeling…
Michael: If you reduce my portfolio by the amount of times I stay at the Four Seasons or the Ritz-Carlton, I’m going to have a lot less long-term wealth as well.
Carl: I agree. I’m just saying this is one of those…
Michael: I decided to buy the experience.
Carl: Yeah, I know. What I’m trying to say though, and I’m not saying it’s a problem. I’m saying there is a feeling that I even battled with when I was running my firm, which was my fee does have some impact on the job. The success I’m trying to do for them is relatively correlated to my fee. It’s not like Ritz-Carlton is not trying to help you meet your financial goals, and therefore…
Michael: That’s fair.
Carl: Right, so my fee… I need to make sure that I’m offsetting by at least my fee, my ability to get you to your goals. There’s that feeling around it.
Michael: Amen, which to me, just comes back to, look, so, yeah, don’t charge an above-average fee for a below-average service. Then you’re just taking away from their financial future…
Carl: Yeah, and I know what you’re saying.
Michael: …and not delivering value. We have this deep planning and this deep expertise and multi-advisor teams and tax expertise, all the other things I’m seeing some firms starting to layer in. Okay, if it’s that valuable, it’s okay to say, well, we enrich our clients’ lives so much with the value of all these things that we’re doing that, you know what, if we charge them 1.1, they’re still going to be ahead, because what we’re doing is that valuable. And when we look at our client retention rates, it reflects that our clients see that value. And we look at our close rates, it reflects that value because of how many people stay with us every year and how many clients are saying yes when we present our offering and services out there.
And I realize that won’t fit for everyone. Some of us, we don’t have the greatest retention rates and we don’t have the greatest close rates. If that’s your domain, I probably wouldn’t be trying to charge an above-average fee right now. Or at least if you do and you believe your services are that good, you might have a sales and marketing problem you’ve got to solve for. But for that subset advisors, let’s say, my retention rates are 95%, 97%, 98%, and my client close rates are 50%, 70%, 80% plus, if everybody thinks you’re that great, maybe you’re undercharging.
Carl: No, I totally agree. And I want to make it clear, that sense of my fee detracts from their ability to hit their goals, I’m not saying that’s a valid argument. I’m saying it’s just, there is that…
Michael: No, no. I think it’s…
Carl: …I’m empathetic with that feeling. And you have to under… This is part of the problem. I used to keep a stoke file for this purpose. I actually called it the stoke file. And when a client would call and tell me…when we made a decision that really had impact. And often we could… I remember specifically, clients who I’ll just call Asher and Largene. That’s not their name. Well, maybe, whatever. You don’t know their last names. I remember when they wanted to sell because of SARS. Yeah, SARS. Remember that?
Carl: They were both doctors and they wanted sell for SARS. I remember I gave them the scary markets. I had the scary markets conversation with them. I got them to stay put. I asked them, “Hey, will you call me when you feel you would…? Pretend we sold. Call me when you would’ve gotten back in.” And I sort of started the stopwatch, right? I marked where the portfolio was, and I remember it was $50,000 or $60,000. Their portfolio was $50,000 or $60,000 higher when he called and said, “Hey, this is when I would’ve gotten back in.” Now, I wrote that down on a piece of paper. It was just a piece of card stock, right? And then I just wrote it in Sharpie, $50,000, $60,000. I put it in the stoke file so that I could remember. I remember even thinking I’m tempted to tell them that they owe me money, right? Your fee this year was $12,000. You owe me $48,000.
Michael: Plus 5% of the money I helped you not lose by selling at the wrong time.
Carl: Plus the tax thing that we talked about, plus the… So, we forget that. And I don’t ever think we need to throw it in clients’ faces. If we’re doing our job right, we don’t need to do that. The stoke file’s for you, the stoke file’s for me to remember. Yeah, I charge 1.1% because…
Michael: What is stoke file? what does that mean? Is that short for…?
Carl: Stoke, like this gets me excited. I’m stoked.
Michael: Okay, like I’m stoked. Okay.
Carl: You could call it your value-added file, but I think the stoke file is way better. And I’m an expert at naming things, so it’s called stoke file. So, when I needed a little stoke, I would pull out the stoke file to remind myself of all the things, not to throw it in anybody else’s face. And nobody else ever saw the stoke file. It was just for me. So, when I remember our friend Connor, I charge 1.1 because I’m worth it. And any day that I feel I’m not, because I read some stupid thing on Twitter about how no financial planner’s worth it, I’ll pull out my stoke file and remind myself that I’m worth the 1.1, because it’s demonstratable, here’s the difference I made here. Here’s the difference I made here. Here’s the difference I made here. That’s how I would handle it if I were Connor.
Michael: Okay, I don’t know, I’ll own I’m the nerd. I love my numbers, KPIs, dashboards.
Carl: Stoke file.
Using Client Retention Data To Justify Raising Fees [26:05]
Michael: I look at client retention rates, just across the firm. See, look, there are advisors out there that can throw barbs at you. What matters is that your clients value what you do. And so, are your clients happy paying what they’re paying for the services they’re getting? If you’re seeing a lot of turn in attrition, then you may have a problem here. I wouldn’t be necessarily raising my fees, but if you’re staring down incredibly ludicrously high retention rates that I see some firms sustaining these days, maybe you’re undercharging. Or thinking another way, just look, if your fee’s something in that 1% neighborhood, and I know some folks even who listen are lower than that, just imagine for a moment you raise your fees by 10%. So, if you’re 1%, you go to 1.1, if you’re 80 basis points, you go to 88, whatever. Just take your revenue, notch it up 10%. You’re half billion-dollar revenue, there’s another 50 grand. You’re a million-dollar firm, it’s now 1.1. You’re a $5 million firm, it’s now $5.5 million.
What could you do for your clients, or what could you do for your team if you had those extra dollars? Who could you hire? Who could you retain? What new tech thing have you been meaning to get that would enrich their lives that you could have the money to do now? What could you do in your firm? More alternatively, if you’ve been doing all of that, if you add 10% to your revenue with all the super awesome above-average team with above-average tech, with above-average offerings, doing the above-average service that you’re doing, that 10% increase in revenue drops straight to your bottom line. Now you’re getting paid as the business owner for all the reinvestments that you’ve made to deliver above-average service.
And again, I’m not talking about how do we jack our fees up so we can take great vacations. Someone’s going to send me the where are all the clients’ yachts thing? I’m assuming you’re delivering above-average service, or you’re ready to take the dollars to reinvest into delivering the above-average service that you want to deliver to be competitive in an admittedly more competitive marketplace. But someone in any marketplace delivers an above-average quality for an above-average cost. Every industry, every service industry, every good, has a range of premium offerings for a premium price and lower cost offerings for a lower price, and some stuff that’s in the middle. So, my question is, where are all the proudly premium advisors?
Carl: Right. The only thing I want to mention is that last bit. We need Connor around. We need Connor’s firm around, and we need the advisors that he hires to serve the people that he can attract because of the difference that he’s making. We need those people around, because profit is okay. I love to think of profit as permission, right? Permission to continue to do the thing. And the other piece that I think is really interesting with your KPI stuff is super smart, is let’s just look at the evidence, you know what I mean? Let’s get out of your head, out of the feelings you’re having.
Michael: Oh, now you’re talking to me. Come to me, Carl.
Carl: Well, in a way, I’m always in my head, right? But I love the idea every once in a while going, wait, do we have any evidence that people are…? What’s the evidence say? Well, turns out the evidence says high retention rate, super low turnover among employees, high close rate, and by the way, if I’m going to continue this, I need to be able to pay the people. That’s where we started, right?
Carl: If I’m going to continue this, I need to pay the people.
Michael: This was all predicated around…
Carl: This isn’t about taking new vacations…
Michael: …above-average service, with above-average quality, with above-average advisors. And he was doing all this above-average stuff for an average fee, and it meant there wasn’t enough dollars left to pay an above-average compensation to his above-average advisors. And that was where the squeeze came.
Carl: Amen. So, yeah, we need to be okay with it. If you want to charge something different than that, that’s okay, too. And get out of our heads and realize that, look, it’s okay. Where are all the proud premium providers?
Michael: Yeah. Amen.
Carl: Super fun, Michael. Thanks.
Michael: Awesome. Thank you, Carl. Appreciate it.