Scripting a 6% fee increase before 1 April

Why the letter writes itself once the reasons are named

Most fee increase letters fail for the same reason before a client has read a word of them: the firm has not actually decided why the number is what it is. “Rising costs” is not a reason, it is a shrug, and clients read it as one — because it could justify 2% as easily as 12%, and a number with no visible working invites a negotiation rather than closing one.

The firms that get a 6% increase through cleanly in a single renewal cycle have usually done one unglamorous thing before they write anything: they have built the number up from named cost lines rather than picked it from the air or copied last year’s percentage. That build-up does not need to appear in the letter in full. It needs to exist, on one page, so that if a client asks “why 6%?” the answer is a sentence, not a scramble.

1 April matters for the same reason timing always matters in this kind of change: most practices run their fee reviews and renewal letters off the start of the new tax year, so it is the one date every client half-expects movement around. A rise that lands in July, with no obvious trigger, reads as opportunistic. The same rise landing at the April renewal reads as the normal course of business, because it is.

The worked example: a 640-client firm at renewal

Take a composite mid-size firm — illustrative figures, but the shape is a common one — running 640 clients on £2.05m of annual fees, an average fee of about £3,200. Three cost lines move at renewal regardless of what the firm charges its clients, and a sensible fee review starts by pricing those before it reaches for a headline percentage.

£71,680 against £2.05m of fees is 3.5%. That is the pass-through portion — the part of the increase that simply keeps the firm standing still in real terms. The other 2.5 points of a 6% rise are margin recovery: roughly £51,000 that does not vanish into higher costs, and instead starts closing the gap left by however many years the firm priced below where it should have.

Spread across 640 clients, 6% on an average £3,200 fee is about £192 a year, or roughly £16 a month for anyone paying by direct debit. Said as a yearly percentage it sounds significant. Said as the price of a modest dinner, once, it rarely is. Which number a client hears depends entirely on how the letter is written, which is the whole point of scripting it rather than leaving it to whoever drafts the renewal that week.

The four-part script

The letter, the email and the call all follow the same four moves, in the same order. Changing the order is where most of the damage happens — an apology before a reason reads as weakness, and a reason buried after the number reads as an afterthought.

• Lead with the reason, named specifically. Not “increased costs” but the actual lines: the pay review that keeps the team who do the client’s work, the software that runs it, the insurance that protects both sides. Specific costs are hard to argue with because they are true and checkable. Vague ones invite a negotiation on the adjective.
• State the new fee, not the percentage. “Your fee for the year from 1 April will be £3,392” is a fact. “We are increasing fees by 6%” is an instruction to go and calculate what that means, and clients left to do that arithmetic themselves tend to round up in their heads.
• Give real notice, anchored to the date. Six weeks before 1 April is enough to feel considered without feeling negotiable. A letter that lands the week before looks like an afterthought; one that lands three months early invites a slower, more drawn-out conversation than the number warrants.
• Make it easy to say yes, not easy to negotiate. One named contact for questions, a short window to get in touch, and no invitation in the letter itself to discuss the figure. The door for a genuine conversation should be open; it should not be propped open by the wording of the letter that triggers it.

The sequence, working back from 1 April

A 6% increase across a whole client bank is a project with a deadline, not a single afternoon’s task, and it holds together far better run backwards from the date it needs to land.

1. Early December — the partners confirm the number. Agree the percentage against the three cost lines, not the other way round, and write the build-up on one page so anyone fielding a query later has the same answer the partners do.
2. Mid-December — segment the client list. Three groups: clients worth a call before the letter arrives, long-tenure clients priced well below current market rates who may need a steeper individual rise, and the standard renewal population who simply get the letter.
3. Mid-January — draft the letter and the fee schedule by job type. Each client’s manager signs off their own portfolio before anything is sent, so nobody is surprised by a letter landing on a relationship they thought was being handled differently.
4. Early February — calls first, letters second. The top-value and long-tenure segments hear it from a person before they read it on paper. Everyone else gets the letter directly, with six clear weeks of notice before 1 April.
5. Late February — letters are all out. By this point every client has had the news in writing, and the clock on the notice period is running for all of them at once rather than trickling out over a month.
6. Early March — the second pass. Follow up anyone who has queried the fee or gone quiet in a way that suggests they might not simply accept it. Quiet is not the same as settled.
7. 1 April — the new fee takes effect. It applies to the first invoice or direct debit collection after that date, consistently, rather than being phased in client by client as each renewal happens to fall due.

Where to hold the line and where to flex

A 6% rise that bends every time a client pushes back is not really a 6% rise, it is an opening offer, and clients who talk to each other will find that out within a season. The discipline is to hold the figure as policy and flex, sparingly, on timing rather than on price: a genuinely hard quarter can earn a client three extra months before the new fee bites, almost nothing earns them a different number.

Where a client declines outright rather than asking for time, the better move is usually not to chase a compromise. Reprice first and let them choose — a client who accepts a proper fee has become a different, better client, and one who leaves has made a decision the firm would otherwise have had to make for them. Advisory work sits outside this exercise entirely: a blanket percentage belongs on the compliance core, and anything priced as a defined advisory package should be reviewed on its own terms, along the lines set out in how to price advisory services, rather than nudged up by the same across-the-board figure.

It is also worth using the moment for more than the number. A firm migrating its renewal population onto monthly direct debit at the same time it reprices removes two problems with one letter instead of two separate, client-facing changes in the same year — the discipline behind that is the same one that drives lock-up down everywhere else in the firm.

What the number does not tell you until you track it

A 6% increase produces exactly one number worth watching afterwards, and it is not the extra revenue — that was decided in December. It is the acceptance rate: how many clients paid the new fee without a fight, how many needed a call, and how many left. Record the outcome against each client at the point it is known, the same single field used for any departure, and read it once the renewal cycle has closed rather than guessing from the loudest few conversations.

That one figure tells a firm things no amount of partner instinct will: whether the increase was priced correctly or too aggressively, whether declines cluster in one manager’s portfolio rather than being spread evenly, and whether the clients who left were the ones the firm would have chosen to let go anyway. Run the same exercise again next April with that record in hand, and the whole conversation gets easier each year it is done properly — because by then it has a track record behind it instead of a hope.