Buying fee protection insurance for all of my clients - is it a wise decision?

Hi

I am in the process of setting up my own practice and I have a question on fee protection insurance.

As part of my service package, I would like to offer all of my clients fee protection insurance without any extra cost. I just wanted to know if it is possible to buy this type of insurance for all of my clients. If yes, what are the cost involved? Do you think it is a good strategy to do this?

Thank you.

Comments

Offer it but don't pay for it.

Mallock | | Permalink

Clients and people in general don't value what they get for nothing.

By all means offer the cover but I wouldn't be doing so at my expense. You can certainly get all practice cover but an expense of this sort when you are starting out isn't something I would recommend. The cost of the cover to clients isn't excessive and I think it ties them to you a bit.

Only a few of my smaller clients refuse the cover and I add a charge which helps cover the admin cost to send out all the letters and compile the lists of those who are members of the scheme.

You will find more than enough things to spend your money on without giving this away for free. Also once you start to give it for free you may find yourself having to continue regardless of the cost. (poor claims history will push your cost up significantly)

FSB Membership

agknight | | Permalink

When I sarted out I didn't have time to look at stuff like fee protection. But what I found out was that the FSB do this as part of their membership fee. So I use this in conversation checking if prospects are members already. If they are and paying accountant for same, then immediately its one point to me. If not, they think better of me for not pushing an add on fee that comes to me.

My strategy is to quote one annual fee and try darned hard to stick to it. But like the previous post I doubt if 90% of my clients would see the value if it included fee protection.

I should add that I offer Abbey fee protection, if client wants it. But I have not checked the market.

 

 

 

 

FSB Membership Fee

chatman | | Permalink

agknight wrote:
the FSB do this as part of their membership fee

How much is their membership fee?

Here is a link to the FSB

agknight | | Permalink

Here is a link to the FSB page on their fees.

http://www.fsb.org.uk/value?gawref=sl-join&gclid=CImNrpqKzrACFUZd3wod807CXg

Perhaps less cost effective for bigger businesses, but I find a lot of clients are members in any event, and don't particularly realise the fee protection benefit. But in two cases clients previous accountants have happily completed accounts, with FSB membership payments in, and not advised the client that perhaps they ought to take a look at whether they feel separate fee protection is worth it.

 

@agknight re FSB

chatman | | Permalink

Thanks agknight. Looks useful.

It looks like this may not be a good strategy after all

kstan1122 | | Permalink

Thanks for the responses.

I have had a look at the FSB website and it is very useful, thanks for sharing the information, agknight.

My initial thought was that my clients would value the peace of mind proposition of having a fee protection in the case of tax investigation. As for me, I wouldn't have to worry that my client wouldn't be able to afford my fee for representing them. I really thought that this would be a win/win case despite the small cost at my expense but I was wrong.

 

Insurance cover    1 thanks

js.btp | | Permalink

I have cover using Peninsula - Taxwise - the cover is fantastic for me as well as clients. 

I get a phone line for tax and VAT queries - I can ring as often as I like with small or massive complicated questions and they refer me to legislation and manuals.  It also has employment advice line and they will help with letters etc if need be.

The cover extends to all enquiries from HMRC and I get paid for VAT visits too.

My whole practice is covered, whether clients pay or not - I can still claim for their enquiries etc and charge them too, or sell them the insurance at a higher rate!

I keep the charges really low - £30 for a subbie, £25 for tax return only and £100 for larger Limited & partnership.  90% of my clients take it up and I actually make a profit on it by £1k to £2k.

Admin does not take long - I do letters to those that have not had it before offering them an opt out, otherwise I bill it every year with their accounts and attach a policy document (1 A4 printed sheet).

 

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