Broker Check

How I Work With Clients That Are Just Starting Out

April 28, 2022
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Mitch writes this blog for Resolute Wealth Management, LLC, and some of the content within this blog are opinions on financial products and/or securities that may not reflect the opinions of the firm or be applicable to everyone’s situation.  If you have questions about whether this content applies to your specific situation, please reach out to Mitch directly at mbodenmiller@resolutewm.com.

Working in the financial services industry gives me the chance to talk with a lot of people from different areas of life, network with professionals in accounting and law, and swap stories with other financial professionals building their own businesses.  One thing I’ve consistently ran into in these interactions is how difficult it is to service clients who are interested in working with a financial advisor, but don’t have any money to manage.  I’ve had accountants tell me all about financial advisors who ask for referrals to work with clients but won’t accept clients with less than a million dollars to manage.  Meanwhile, there’s a HUGE segment of the population that really needs access to a financial professional during the critical wealth-building years of their lives that are getting shut out because they weren’t left a large inheritance, insurance settlement, or other large sum of money to invest.  While I’ll readily admit it’d be fantastic if every one of my clients had a million dollars for me to manage, that’s not realistic and it’s not my specialty.  I feel like the best value I can provide someone as an advisor is the ability to save money to reach their goals, and that process starts at the beginning.  Wouldn’t it be incredible to have an AFFORDABLE advisor right from the start to help you along the way?  I structure my planning business so that I’m able to work with ANYONE that wants help building a strong foundation, regardless of whether they’ve saved money or not.   

Financial Planning vs. Wealth Management

ALL advisors focus on investments.  Whether they are actively managing it themselves or having another company handle the investing, all advisors base their service on how much money.  Since they are focused on how much money you have, it logically leads to the fact that in order to have access to an advisor, you have to already BE wealthy, either by having a large sum of money or a high-paying career.  Meanwhile, the people that would benefit the MOST from having access to a professional financial planner are the ones in the middle.  The ones with steady, solid careers who worry about rising child care costs, inflation, student loans, and other things that don’t show up on a portfolio statement.

There are some advisors out there that attempt to capture some of this business.  They build out a “comprehensive financial plan” for clients, with LOADS of detailed metrics, cash flows, and advances statistics piled into a neat 35-page report that’s given to a client.  These plans can range from $1,500 to $3,500 depending on the individual advisor’s pay schedule.  Meanwhile, the plan starts to age and become obsolete shortly after it’s delivered to you, because life CHANGES!!!  If you want to continue working with that advisor on the plan, they are likely going to be charging you upwards of $200-$400 per hour to update the plan and advise you.  Once again, only the wealthy clients would pay this for their plans!

So, if it’s so expensive, how am I able to offer the same service to clients with no assets to manage?  Honestly, it’s not that difficult.  My process starts with a phone or Zoom conversation with a prospective client, where we talk about what they feel their pain points are financially.  I work to create a plan customized for that specific client, and we regularly meet up to discuss changes and assess how things are going.  No huge, fancy packet that will be thrown out in 6 months.  I keep things simple and give my clients on-demand access when they have questions.  Over time, they will go from having no assets, to having a small retirement account.  Once they reach a predetermined amount (my number is $50,000), I transition them from a monthly subscription billing to my normal investment fee schedule.

The Value of a Good Financial Plan

There are lots of people out there that are “do-it-yourself” type people.  I don’t think there’s anything wrong with that.  Being able to change your own oil, remodel your kitchen, or modify your landscaping saves you money and gives you a sense of fulfillment and pride in the work you did.  However, as a financial professional, there is so much value I can unlock for a client in positioning themselves for future success that it’s difficult to replicate by doing it all yourself.  I can:

  • Build budgets for clients
  • Help them to manage/eliminate debt
  • Establish and grow an emergency fund
  • Calculate the proper amount and type of insurance they need
  • Create and sustain a retirement savings plan
  • Help them to understand their pension plans, health benefits, and other employer benefits

That’s on top of managing their investments!  Often, I need just one visit to save them enough money to pay for my services immediately.  I worked with a couple with two children who were struggling to reduce their credit card debt despite two good jobs with reasonable income.  I sat down and researched the best way for them to consolidate their balances into a lower-interest credit card.  The savings on credit card interest from that one meeting saved them more money than they were paying for their monthly fee to me! 

The best financial plans have three key qualities:

They are interactive.  Plans can be complex, with lots of moving parts (just like life!).  Plans really work with there is good communication between both the advisor and the clients.  I focus a lot on getting to know my client’s lives and ask a lot of questions, and encourage my clients to ask questions of me and why I’m suggesting certain things. 

They are real-time.  This goes hand in hand with my argument against a comprehensive plan.  Your plan is no good if it’s not able to change as your life changes.  What happens if you make a comprehensive plan, then 3 years later you are engaged to be married and want to buy a house?  That wasn’t in the original plan! 

On-Demand Access.  While I do keep regular office hours, my clients have access to email me questions 24-7, when it’s convenient for them.  If they are easy answers, I email back.  If it requires more discussion, we schedule a time to meet and discuss.  The hardest part of any plan is sticking to it, and by making myself available to clients, we can collaborate together.

How I Bill Clients

Most advisors struggle to work with clients with lower totals in their investment accounts (or avoid them completely).  There are likely different reasons for it, but the biggest reason is the profitability of the business.  Advisors can only work with so many clients before they don’t have time to hold the scheduled client meetings, bring on new clients, manage the investment accounts, and remain up on compliance.  So lots of advisors focus on bringing on higher net worth clients, to maximize the revenue of the business.  While this allows the advisor to focus more time on the clients, it limits how many clients they can work with, and often the ones that need more help get pushed to the back of the pack because they have less money to work with. 

This is my fee structure.  I’ve talked to lots of different advisors that have different opinions about whether it’s best to advertise their structure or not.  Most of them don’t like talking about what they charge the client for various reasons.  I had an advisor I once worked with tell me he doesn’t disclose his fee structure because “clients don’t like to be reminded of exactly what they pay,” which is ridiculous and deceitful.  I believe it’s best to be transparent about everything I do, and so here’s what I charge as a financial consultant:

Assets from $0 to $50,000:  $50/month

$50,000 - $100,000 – 1.25% of assets: 

$100,000 - $500,000 – 1% of assets.

$500,000 - $1,000,000 – 0.90% of assets.

$1,000,000 - $2,000,000 – 0.80% of assets

$2,000,000 - $3,000,000 – 0.70% of assets

$3,000,000 - $4,000,000 – 0.60% of assets

More than $4,000,000 – 0.50% of assets

Billing clients $50/month keeps things very simple for both the client and me.  The clients I work with that are under $50,000 in their investment accounts likely need the most help getting started with a strong plan, and so this best sets them up for that path.  I’m not spending much time talking with them about investing strategy in this early phase, because it’s not the most important factor in reaching their goals.  I work to help them solve their financial issues and hopefully put them on a path so they can start to grow those accounts to meet those later life retirement goals.  In the event they don’t want to continue working with me on the monthly plan, it’s able to be cancelled immediately with no charge.  Once they start having success saving, we transition our relationship to one based on the assets being managed.  In both cases, it’s important to note one key thing about how I’m paid:  I can only make more money if the client does!  I don’t charge my clients trading fees, I don’t sell them expensive mutual funds that are paying me to sell their products.  Everything I do is aligned with the best interest of my client first.  Period. 

I hope this has given you some information on how it’s possible to have access to a financial professional without being rich!  I am actively taking on clients, and would love the opportunity to chat with you and see if I can help with any issues you may be experiencing!  If you’re just starting out on setting up a financial plan, I’d be happy to work with you to solve your issues and set you up for success in the future!  Please feel free to reach out to me with any questions about my fees, my planning services, or any other questions.  Have a great week!

About the Author:

I work as a Financial Consultant with my partners Bob Montavon and Tom Schwab for Resolute Wealth Management, LLC.  After spending several successful years in business management working with clients in the retail and construction equipment industries, I transitioned into financial services to help make a greater impact on my client’s lives.  I work with clients from many different backgrounds, incomes, and situations.  By helping clients identify where they are and where they want to go, I serve as a fiduciary and trusted advisor to help them dodge roadblocks, adjust to different situations, and reach those goals.  I graduated from Wright State University in 2018 with a degree in Investment Finance, and completed my MBA work at The Ohio State University.  I currently hold the Chartered Financial Analyst (CFA®) designation, and serve as membership chair on the Board of Directors of the Dayton CFA Society.  In addition, I am a member of the Centerville Noon Optimists of Centerville, OH, a volunteer and social organization working to promote opportunities for local youths in the Centerville/Washington Township communities. 

Want to Reach Me?

Phone: 937-424-3269

Email: mbodenmiller@resolutewm.com

LinkedIn: https://www.linkedin.com/in/mbodenmiller/

Calendly: https://calendly.com/mitchbodenmiller