What is your goal with this business?

I want anyone to be able to access financial planning.

To understand my goal it is first important to understand the industry.

Let’s be clear. Financial planning is an industry. It has its own designation, the CFP (which I have), and a cadre of thousands of people who offer this service. But here is the problem–it is really hard to purchase a financial plan. Try it. Look up “financial planners” online in your area and start dialing. See how many people you can actually purchase a financial plan from. I bet in an hour of dialing you will find zero.

Here is another strange phenomenon. Why is the average age of financial planning clients 50?

This is because a financial planner does not technically make money on a financial plan, rather on investing their clients’ money. Here is how it works. The typical investment advisory fee is a 1% fee per year on how much money the client has for the advisor to invest, and the minimum most advisors require is $500,000. So if you give your planner $500,000 then they make $5,000. If you add money to it the next year, and the market bumps it up to $600,000, then the advisor makes $6,000. (side note—the fee goes UP even though the bulk of the financial planning happens in year one)

So not only is the typical client 50 years old, they also have a huge chunk of change saved. How paradoxical that the financial planning industry is standing at the ready to give them huge amounts of savings, cash flow management, insurance and estate planning advice. Weren’t those decisions actually made back in their 30s and 40s for the most part? This is why the average 30 or 40 year old does not have a financial planner. The industry is simply inaccessible, even for high earning young professionals.

Or what about a person in their 50s trying to seek financial planning for retirement, but all their money is tied up in a company 401(k) or pension. They could have well over the $500,000 minimum, but because that money is not able to be invested they cannot get a financial plan.

To further illustrate the point let’s use this analogy. Let’s say you need to buy a couch, and you go to the local furniture store to buy one. You find the perfect couch and go to purchase it. At the register you find out that in order to get the couch you have to buy a share in the company selling the couch that will cost $500,000 and then in exchange you will get a contract for yearly furniture, which will hopefully include the couch.

The same is true in the financial planning industry. If you JUST want a financial plan, not an investing service (assuming you even have the minimum $$$ to walk through the door), you can’t buy it. Interestingly, if you want a financial plan and have the minimum $$$, not all financial planning is alike. You might not end up with a real financial plan.

I think that holding financial planning hostage by entangling it with investing simply does not make sense. I want clients to be able to buy a financial plan. Not only can our clients walk through the door and purchase a full financial planning process, if they have a question that might take only an hour to answer they can buy that hour. It is as simple as that.