Clients find that our plans are detailed and comprehensive, particularly when compared to experience with other planners, yet our price for financial planning is a small fraction of the typical planning fee for the first year. The fee then goes down versus the industry norm where the price goes up in subsequent years. We have worked very hard to get our pricing where it is because, quite frankly, we know that the fees clients pay erode the returns on their portfolios.
First of all we re-imagined financial planning as if we were inventing a new model for the first time. We started with the question, “what is the appropriate price that one should pay for financial planning?” Then we figured out how to do even better financial planning and investment planning at that price. Here is how:
- Planning technology. We built our own. And we built it with the complexity and comprehensiveness that is mandatory for working with people early in their careers or those close to retirement. We customize a model for each client that incorporates their current situation and plans for the future. Not only does the use of this model result in better planning, it saves our clients’ money.
- The heavy lifting. The client does a lot of the work. We are very happy to share the work load of planning with clients if it means they get a dramatically reduced price. Clients provide us with detailed information of their current situations in an organized manner, reducing our time and fee. We know this isn’t right for everyone. Some people want other people to “just handle it” and are willing to pay a significant premium for that service. Our clients want more of a partnership, which we think optimizes their wealth.
- Our location. We live in Arkansas. Seriously, this is probably the biggest reason we can provide such low prices. Little Rock is repeatedly ranked among cities with the lowest cost of living. If our dollar goes 40% further than our big city counterparts, it stands to reason we can do planning for less money.
- Investing. We completely and radically reimagined investing. Why did clients have to choose between an investment advisor with a minimum fee of $5,000 a year who constantly looks at and trades in their account? Or a robo computer advisor making recommendations only when prompted by the client? We saw no reason why a service between these two extremes wouldn’t work. Like a robo advisor, we don’t take formal discretion over a client’s account. This saves the client a significant amount of money. But unlike a robo advisor, we bring the human expertise. Wesit down and to talk to the client, advise them on how much is appropriate to put in that account in the first place and, how to do it in a tax efficient manner.
We spent several years stripping down the traditional financial planning model and building it up into the perfect marriage between human expertise, client contribution and technology. From every angle, we think the client wins.