Whether you receive compensation by commission, asset-based fees, or fees for service, explaining your fee structure to clients is an important part of building a strong business relationship.

Talking about fees is a “tricky” conversation, says April-Lynn Levitt, a coach with the Personal Coach in Calgary, and many advisors gloss over it. However, discussing fees openly with your clients establishes you as a professional and helps you avoid problems down the road.

If the idea of talking about fees makes you a little nervous, these tips may help you have a productive conversation:

> Make it routine
Just as you would create a process for contacting a prospect or going through discovery questions, make a conversation about fees part of your business process.

Make it a standard practice to discuss your fees with prospects or new clients, Levitt says, whether that discussion occurs during the first meeting or later on in the process.

> Approach it with confidence
You will be more confident in talking about fees when you understand the value you bring to the table.

Understand that your services are worth what people are paying, Levitt says. Show clients the value they receive by paying your fees.

> Write it down
Show your value to clients by putting your fee structure in writing.

Create a written document, Levitt advises, that outlines your fee structure and explains what clients get for those charges.

For example, for X fee, the client gets a financial plan. Or, while you receive Y commission, the client receives financial advice and portfolio reviews.

As well, the visual aid of a document, she says, makes your fee structure easier for you to explain and easier for clients to understand.

> Offer a second opinion
If clients remain skeptical or unclear about your fees, give them another opinion.

Some fund companies and other financial services firms have documents and other tools you can use to explain your charges, Levitt says. Using those tools can help show clients that your fees are standard within the industry.

“If people are skeptical,” she says, “it helps if you have something from a third party.”

> Keep it simple
A simple fee structure makes conversations your fees more manageable.

One advisor Levitt has worked with had 20 fee structures, each tailored to a certain type of client. That made his business difficult to explain and to understand.

Levitt advises using one straightforward fee structure. It is acceptable, she says, to have a tiered system, in which fees change depending on asset levels, but that structure must be defined clearly and consistent.