In this episode of The Power Producers Podcast, David Carothers shares his expertise on how to structure fee agreements and recoup costs when auditing accounts and discusses the importance of being transparent about compensation with clients.
Episode Highlights:
- David discusses the process of auditing accounts including how to split fees with clients and which policies are included in fee agreements. (2:42)
- David shares the reason why he prefers to engage with clients a month after their account renewal. (6:32)
- David discusses how to handle mistakes found during a mod audit and ways to get paid for correcting them. (9:54)
- David explains the importance of investing in relationships with clients and how to budget for third-party loss control services. (16:13)
- David discusses the three ways to structure a fee agreement. (17:40)
- David suggests pitching the fee structure to potential clients, as it may not be discussed in the middle market. (23:56)
- David discusses the importance of transparency in compensation and how to use the risk management action plan to show clients what they are paying for. (25:07)
Tweetable Quotes:
- “It’s really, really important that you understand how these deals get structured. And the best way to do it, in my opinion, is to always have some skin in the game for yourself because that’s more attractive to the buyer.” – David Carothers
- “When we do a proposal to somebody, we identify exactly what our compensation is going to be. It’s completely transparent, especially in the fee basis because we’re billing them for it. We’re telling them, here’s what we do, here’s what we’re charging you. They don’t have a problem paying that bill. That’s why the Risk Management Action Plan is so important because I’m sending that thing with an invoice every single time. I want them to see we’ve earned the money that we’re billing them for.” – David Carothers
Resources Mentioned: