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Federal Employee Financial Planning: Financial-Planner-to-Client Ratio (EP67)

How does the financial-planner-to-client ratio impact the quality of financial advice? In this episode, John, Michael, Tommy, and Ben will discuss how the ratio of clients per advisor shapes their approach to financial planning. They will share their journey from managing 150 - 200 clients per planner to capping it at 100, explaining why this change was necessary for delivering top-notch service.

Listen in to learn why maintaining a limit of 100 clients per advisor allows for deeper connections and proactive planning. You'll also hear about the benefits of this approach, including better work-life balance and long-term career sustainability, and gain insights into how to evaluate whether your financial advisor is right for you.

Listen to the full episode here:

What you will learn:

  • The evolution of our financial-planner-to-client ratio. (5:25)
  • Why we’ve decided to serve a maximum of 100 clients per advisor. (8:30)
  • How many clients you can have a deep relationship with. (10:05)
  • Why a deeper connection is so important in a financial planner relationship. (15:30)
  • How limiting ourselves to 100 clients each gives us balance in our lives too. (22:30)
  • Why you don’t want to go to the cheapest financial planning firm. (28:20)
  • Questions you can ask your financial advisor to make sure they’re right for you. (32:15)

Ideas worth sharing:

  • “You can know and be an acquaintance of hundreds of people, but to have a tight relationship where you really know them as people, what’s going on in their lives, and you’re bringing the best financial planning advice, tends to be around the 100 mark.” - Mason & Associates
  • “We want to be proactive with our clients rather than reactive.” - Mason & Associates
  • “Taking time off and enjoying time with our families allows us to be present when we meet with clients and be a better version of ourselves and—hopefully—allows us to do this 20 - 30 years so we can go through the financial plan with our clients versus getting burnt out.” - Mason & Associates

Resources from this episode:

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Read the Transcript Below:

Congratulations for taking ownership of your financial plan by tuning into the Federal Employee Financial Planning Podcast, hosted by Mason & Associates, financial advisors with over three decades of experience serving you.

John Mason: Welcome to the Federal Employee Financial Planning Podcast. I'm John Mason, President and Certified Financial Planner at Mason & Associates. And on today's episode, the usual crew, Mike Mason, Tommy Blackburn, Ben Raikes. Folks, we don't know if we are the most credentialed financial planning podcasts out there, but we know we're one of the most credentialed.

We've got certified financial planners, CPAs, enrolled agents, chartered financial consultants, chartered life underwriter, and we're excited to bring you another episode of the Federal Employee Financial Planning Podcast. In today's episode, we're going to be talking about the financial planner-to-client ratio and exactly what we do at Mason & Associates, how we're thinking about the future, and then we're going to compare and contrast how others are doing it in the industry as well. So we're going to have a lot of fun today talking about how many clients we serve, our thoughts on that. So financial planner to client ratio, and as we kick off this episode, big thank you to all of you who've been following us for over two years.

Thank you to our clients for allowing us to serve you for another year. This is exciting. We're financial planners first, and we do this second. Guys, how are we today?

Michael Mason: It's exciting times for me. I missed the last couple. So it's good to be back.

Tommy Blackburn:It's going well. It is always interesting. So full transparency to our audience, we've shared this before, but we are experimenting doing this from different locations. So actually all four of us today are in different locations. Very excited. as we continue to fine tune this but we have to figure out the flow a little bit more as you may be picking up on. It's easier when we're in the same room, of knowing who's planning to talk next.

So bear with us while we work this out. I myself am doing great. Jess and I recently had some time away. We went to Antigua, which was just really nice. Actually, went with some friends that we don't get to see very often at all so that was a great trip. And I was sharing with John before everybody else hopped on here, our son is about not quite six months yet, almost six months. And just sharing with him as a son, Carter is now over four years old, flashing back to those infant stages, I think we're having some sleep regressions and the fun of teething and, just all of that fun infant stuff that you kind of forget about once you're a couple years into it. But it's all good things.

Ben Raikes: It's cool. It's, John, you're in Savannah, Tommy's in Williamsburg, I'm in Richmond, Mike, you're in Newport news. So testing this out, getting to do the podcast from our homes or wherever we may be. It's fun to try this out and we're, I think we're all looking forward to it.

John Mason: And I don't know, we record these episodes, guys, and I don't really know Tommy's in control of when they get pushed out and when they get released. So who knows when this one will actually be live. Today is March 12th that we're recording this episode. And one of the reasons that we're allowed to do this, or that we're in different locations is because we want to make a video podcast available.

So depending on when you hear this podcast, Google Podcast is probably gone. I think that is canned on April 1st, and everything is pivoted to YouTube. So we've already set up the Mason & Associates Federal Employee Financial Planning podcast that's going directly into YouTube now already. So all of the 62 episodes are already there.

But because we're now recording this video version, we also have video podcasts now available that'll be on our YouTube channel and I think Spotify. So is that YouTube channel. Do all the things for us, folks. Like, subscribe, hit the bell notification.

If you like this episode, five stars, et cetera. Thanks again for being with us on this journey. So, Mike, you've been in this business for a long time and I've been in it with you almost 14 years, which is crazy to think about. So getting closer and closer to two decades. Maybe you can share with the audience your evolution of how many clients you were serving in 1990.

Maybe how many you peak what we're serving, maybe in 2016, 17, 18 and where we are now and what our vision is with how many clients we want to serve per advisor. I just love to hear your evolution over time and what that looks like.

Michael Mason: It's 37 years, folks, 37 years, 2000, I'm sorry, 1987, when I came in air quotes the financial planning business, and it was really with a life insurance company, kind of sold me a bill of goods that I would be a financial planner, and we kind of morphed into that over time, but originally it was transactional.

I would still do annual reviews. Transactional, you start with no clients and maybe by the end of the first year you have 40 or 50 transactions. As we grew that into the federal employee specialist in the 90s, Ken and I were probably serving 60 to 70 clients a piece.

It probably peaked in 2016, 2017, where it had to be, John, I mean, you remember these numbers, you were with us, at least 150 to 200. Some of them were transactional, but we tried to do annual reviews with every one of them. We just realized that it was getting way outside the servability and bringing a great message to each client. So it started at zero, grew to that high of probably 200 relationships.

John Mason: I remember it like it was yesterday. I mean, we were doing financial plans for new client relationships probably to the tune of 40 to 50 new onboarding clients per year. And when I started with Mason & Associates, we didn't have any asset minimums, we didn't have any minimum fee.

And I think that built us in a way that was really cool because whether the audience believes this or not, like our best foot forward is wanting to help everybody that calls, right? Everybody that schedules an introductory phone call, everybody that walked into the office from 2010 through 2018, we would try to find a way to help everybody.

And what that led to was us over-committing ourselves to too many client relationships where some people were paying a higher fee, some people were paying a lower fee. And because we wanted to help, we didn't want to let anybody out the door even if it was just helping them replace FEGLI option B with a 20-year term.

We felt like some sort of obligation to do that. I think it was probably as many as 250 relationships per advisor back in 17, 18, 19, and we've since scaled that back to around 100. We don't hold it, Tommy, to exactly 100 families per advisor. There's going to be ebbs and flows. There's going to be new clients that onboard quicker than some years we're going to have maybe deaths or divorce or what have you and relationships ended at a more rapid pace. But about a hundred families per advisor. Why do we do that?

Tommy Blackburn: I think there's many reasons as to why we've gotten to where we've gotten. I was thinking with Mike, and even yourself talking about 200 to 250 clients and one of the things I know we want to hit on is can you serve more than 100?

And we believe yes, and we believe you can do it well, and my guess is knowing you and Mike, and Ken, you did serve those clients well, but my other suspicion there is that you probably knew while they were happy, you weren't doing your very best. We hold ourselves to very high standards. And so that's.. and it's one of those things was like, yes, I can serve many more than a hundred. But I don't know in the back of my mind, there's this nagging, maybe I missed something, maybe there was this little extra thing that because I'm serving so many and I just can't spend as much time on that relationship that I don't feel like I'm doing my 100% best. I'm still doing a great job.

And I know you guys were, and even when we look out to our competitive landscape with other advisors, we can see that we're, again, there are firms out there that do just as great of a job, maybe even better than we do, but by far most kind of a letdown when we look at it. So there's no doubt providing exceptional service, but you always want to bring the absolute best that you possibly can.

And there's just only so many relationships you can do that with. There is some research out there, not just in our profession, but just humans in general, which is how many relationships can you have and have a deep relationship with? So you can have, you can know acquaintances of hundreds of people, but to have a tight relationship where you really know them as people, know what's going on in their lives and are bringing the absolute best financial planning advice, it tends to be somewhere around this 100 mark.

Some folks, maybe it's a little less. Some, maybe it maybe can even get as high as 125 or 150, but the research seems to point to you can only have, there's only so many deep relationships you can have. And technology probably helps you be on the higher end of that. And when you have similar patterns, specializing in taxes and federal employees probably allows you to have a little bit more because you don't have to spend as much time getting to know everything being so unique, but that's kind of, at least from a behavioral human, what we're capable of, how we got to where we are. There's some other reasons we also got to that 100, but I'll pause and let you jump back in or let someone else jump in.

John Mason: Well the Federal Employee Financial Planning podcast and the Federal Employee Financial Planning niche or niche, however you want to pronounce that, it did allow us to scale to 200 to 250 families because you did not, we did not have to relearn a retirement package every time somebody walked in the door. We didn't have to relearn how to calculate the pension every time they walked in the door. So we were able to scale up. We did offer awesome service.

I don't think we offered service capable or comparable to what we're doing today. So that niche certainly allowed us to scale, Tommy, very rapidly. And our commitment to always providing excellent service, what that led to was some sacrifices in other areas, and I think that's a perfect lead into the reason that we're capping ourselves at 100 families ish per advisor.

And we're going to highlight some of those. I also want to highlight right now that we, I could scale back to 150 or 200 families, and all of us could on this podcast, if we had two paraplanners each, if we had executive assistants out the wazoo, if we increased payroll and reduced profit and did all of these things like sure, we could scale up dramatically and serve more families, but that's not what we're solving for at Mason & Associates. So Federal Employee Financial Planning podcast, if you're listening, we, the lead advisors, there's five of us, the four on this podcast plus Ken, we do the prep work. We do the financial planning. We get ready for the appointments. And that's just something that we enjoy doing. We maybe in the future, we'll have a paraplanner or assistants or people like that to help us with the prep. But right now we're doing that all on our own, so deeper connection–

Michael Mason: Let me jump in a second, John. I want to go back just one more time to the past,and maybe this evolution was happenstance, but it worked really well. You remember when you first started, and we had appointments at nine, eleven, one, three, and five, Monday through Thursday, and I remember you saying to me after about two weeks of this, “I don't know how you guys do it. I'm wore out.” And we laughed at you and we said, “You need to get into appointment shape,” but we ran appointments like that nine, eleven, one, three, and five, probably for two or three years straight.

You had your conference room. I had my conference room. Ken had his. As clients were leaving at nine, at eleven from the nine o'clock meeting, there was clients coming in from the eleven, and the beauty of that was you became an expert really, really quickly with federal employee benefits. It was, believe it or not, it was surge as we call it internally.

It was surge 2010, 2011. And that made us, really all of us, true experts. When you're seeing that many people in that, they all 99% were federal employees, but they all had different issues, and we learned everything from CSRS offset, to the VCP and whatnot.

John Mason: It was a surge 350 days a year instead of a calculated surge where we, we also, I mean, we could talk all about this. If the audience went back and they listened to the episode on strategic planning meetings and that evolution and how we serve clients differently now than we did in the past, so much has changed at Mason & Associates for the better of us, and I think for the better of clients, and we jotted down, guys, some of the reasons why we cap ourselves at 100 families per advisor, and the first one, and Tommy kind of already hit on this, is a deeper connection, and financial planning, and I know Tommy and Ben, we kind of laugh about this a little bit, so we went to Virginia Tech, and so much of the Certified Financial Planner curriculum and so much of the information out there right now talks about feelings.

And it's not that we don't want to have feelings or that we don't want to relate to our clients, but we believe we're technicians first and then we let our natural human ability as the connection with clients. But let's talk a little bit about deeper connection and why that is so important in a financial planning relationship.

Ben Raikes: I think this goes a little bit along deeper connection, John, with also being able to be proactive with your clients rather than reactive with your clients. So if we're surging our client meetings, which is the term that we use internally, and we know that we're meeting with everybody in April and May, we have January, February, March, and the beginning of April to get ready for all of those meetings in detail, go through the emails that we sent them, go through their old financial plans and say, “What is coming up this year that I can help our clients with?” And that allows those meetings to be very impactful because I mean, what's changed in the last three or four years? Secure act 1.0, Secure act 2.0. We've had a change in the tax code.

We've had the CARES Act. We have the tax cuts and Jobs Act potentially expiring in a couple years If we're just having meeting after meeting after meeting after meeting, we're serving those clients well in that moment to the best of our ability, but we're not able to have the time to develop those deeper connections and say, “Hey, let me focus on this meeting. Let me prepare for this and say, ‘You know what? There's some new things coming down the pike that I think are going to be able to help your children with able accounts.’” Or, “Now I was actually able to review your trust and it's actually 20 years old and it gives all the money to your ex wife.”

We don't need to have that in there. Let's actually go through and be able to think about these things and be proactive with our recommendations rather than just kind of serving in the moment. And I'm not sure if that fully answered the deeper connection question, but I think a big part of that is our capacity to be able to think about these things.

Tommy Blackburn: I think you did a good job just kind of further explaining my point of being of worrying about missing something. I think, yeah, it's that proactive nature of just when you have to go from meeting to meeting to meeting constantly, yes, it's what more in-depth proactivity could I be doing right now?

It just becomes harder to juggle all that. So I think you did a good job of kind of enunciating and illustrating that point. So thank you. ‘Cause I, I think that is a point that I fully agree with is sometimes when you can feel capacity beginning to build and build, you do just kind of get this sense of I've got to keep moving and I'm worried that something's going to happen here that I'm–not that I'm not serving them well in the moment, as you said, but that maybe there's that little extra proactive piece that I just I don't have time for,

Michael Mason: Here's a really good story folks to bring this home, you know, in real-life stories, we can say things, but we can tell a story that says a bunch. So if we were going meeting to meeting last year, and last year was military survivor benefit, open season, once in a lifetime chance to make a difference, to go back and change a bad decision. If we were going meeting to meeting that veteran, with a 110,000 to 120,000-dollar O6 retired check that was totally disabled, that couldn't apply a wet signature to a form, the federal government wasn't smart enough when they rolled out the open season to help a veteran like that elected, we wouldn't have had time to reach out to a congressman, to make sure that they change the rules.

And this veteran got into survivor benefits, 60 some thousand dollars a year for the rest of her life when he passes away, which he will do with this disease. We wouldn't have had time to do that. We made a huge difference because we weren't, aren't inundated with 200 clients apiece.

John Mason: I love the story, Mike, and I think what's fascinating about all of this is that when I think about deeper connection, the thing that immediately pops into my mind is the human aspect of it, right? It's like who is your spouse? Who are your kids? What do they do? And then the deeper connection also is like the data or the analysis piece of it, too.

And I find that to be very fascinating that the deeper connection is often talked about in the industry as only the human aspect. But the deeper connection to have a fundamental understanding of everything that makes them tick, not only as a human, but from their financial plan is such a big thing.

So a hundred families per advisor allows us to have that deeper connection. And the other thing that it does for us with our federal employee financial planning specialty is it allows us to ask better questions. So we do our strategic planning meeting season. We limit the amount of clients we have. We have our niche that we specialize with.

So what that allows us to do when we meet with clients for their strategic planning meeting is ask better questions. What's going on? Tell me about your family. Tell me about this. It also allows us, Mike, I remember one time that the audience may find this to be ludicrous, but I remember one time a client came in and the blood pressure was high, his face was all red.

And I think you looked at him and said, “Dude, you're going to die. something's wrong. Something's wrong with you.” And he went to the doctor and something really was wrong with him. And I don't know if we saved his life. I don't know if you saved his life, but if you're meeting five clients a day, 300 some days per year, and Joe walks in with a red face that looks abnormal, do you think that financial planner or that financial salesperson or whatever we call them are going to be able to make that impact.

So I just it resonates to me this deeper connection that the reason why we limit ourself because you can only know so many people so well, and you can only make maximum impact on so many folks.

Michael Mason: Yeah, with 200 and some clients you don't necessarily remember that one active federal employee on our way to Kiawah Island to golf for our annual golf trip. You don't always remember that one client that hadn't responded to the open season, and you make that phone call from the truck on the way to Kiawah, seven hundred thousand dollars of life insurance in place and unfortunately, she succumbed to cancer and the family seven hundred thousand dollars richer because we didn't over-promise. We underpromise and over-deliver.

John Mason: What are some other reasons that we limit ourself or cap ourself at a hundred, hundred families per advisor?

Tommy Blackburn: We're human too, right? So we're kind of been framing all of this into how we can be good partners and humans for our clients. We also want to be able to enjoy time with our families.

And so Mike kind of alluded to earlier of you can serve 200 clients, but it's like in order to do that and to really do it deeply, you have no life outside of serving those clients. So if you want to have some balance to your life, that's where this also comes in to. I want to have deep relationships. I want to be proactive. I want to know them as people. And I want to know my family as people, and I want to do this for a long time. And so I have to have a sustainable balance in order to do that. And we think that this all comes back to our clients. We think that us taking time off and enjoying time with our families allows us to be present when we meet with clients and bring a better version of ourselves and hopefully do this 20 or 30 years so that we can go through the financial plan with our clients as well, versus getting burnt out and looking for an exit from an unsustainable situation.

Michael Mason: And that's, and you're talking about me really now, Tommy, not that you're not, you guys have good balance as well, but I've been doing this 37 years.

I could retire financially at any given point, but I really love what I do. So now I love it even more because it gives me time to do what I love right here in the office, helping clients. But I also have time on the golf course. I have time with my bride, Bobby, my grandson. So it's in travel. So yeah, it's a great balance. And that means I'm going to keep doing and serving clients versus it's too big and it's too much and I'm gonna be permanently retired so it's perfect for me.

Ben Raikes: Mike Mason, you walk in the office every morning and I think the vibe that I get from you is, “Boy, it is a great day to be alive.” And I'm pretty sure you have said those words verbatim. So sir, you are a testament to this, and yeah, as Tommy said, keeps us all sharper, keeps us all happier serving our clients.

And not to make this whole thing go in a circle, but it really does work in a loop. If we can do this for a really long time and we can be less stressed, that only helps us serve the clients that we do have better.

Tommy Blackburn: Well, how do you think it would feel as a client, if you come meet with flip it around where Mike is like looking at a client and you look like you're about to die. How about if you look at your advisor and you're like, “Dude, you look stressed and you need to go to the hospital.”

Michael Mason: And you just have to ask yourself, human nature, if you're looking for somebody to be your financial planner, do you want the person that takes everybody that fogs a mirror? Do you really want that person to be your financial planner?

Don't you want somebody that's a little selective? Or a lot selective, which is what we are, and we'll only take so many. If you have to take as many people as you see every day, then you're just not a great financial planner.

Tommy Blackburn: And I think this brings us, John, to maybe, I don't know if you're ready to pivot, but to another point we wanted to make, which is could you serve so few clients that you don't do a good job?

John Mason: I do want to go there. I have some thoughts on everything that y'all just said, I want to know my hundred clients and I want to know them really well. I also want to know my spouse and my son, as good or better, right? Then all of my clients and over the years, I don't know what it was like to be a father in 1900 or 1950 or 2000, but I know what it's like to be a father and in the 2020s and it's different, I think, like I get home and the expectation is that I contribute, the expectation that I have for myself is that I'm on. I'm playing with my son. I don't have, dad doesn't have a chair in our house. You turn on these movies from the 50s and it's like dad had his chair. He came down, sat down, nobody bothered dad when he got home. The spouse would bring a beer and that’s not the world that we live in so.

Tommy Blackburn: And to be fair, you and I, because we're the ones living it at the moment, that's the expectation we put on ourselves, right? And that's not the fathers you and I want to be. We want to be involved.

You had me chuckle for a moment. You said, there's no chairs like, John, I do sit down when I get home, but you mean I don't have my designated lazy boy. You are correct about that.

John Mason: It's not labeled right now, or you don't get to–like if Carter's sitting in my chair, it's like, “Well, dad, I was here first.” I'm like, “Well, you're right. You were,” so, and we need to share, right? All of these things. So as we think about that, there's just, I want to know my family really well, as we think about virtual client meetings, which we've done episodes on that in the past, that allows us to know our family really well, then you're in Richmond and you're not coming down every day.

One of the last points here is because we limit our families, because we do a lot of virtual meetings, we're also healthier. And we are a very, very healthy financial planning firm as far as our health span, our physical activity, the things that we're doing, what we eat, the food that we have catered during strategic planning meeting season is like gluten-free and soy free, mostly for my benefit.

But as we think about this, we're trying to do all of the things to extend our health span, our lifespan, our financial planning span. And that's the type of firm you want to work with. Fees, really quick, fees. Are we the cheapest financial planning firm? Absolutely positively no. And do we charge a little bit more because we see a little bit less people?

Yes, sure we do. And we think that's a good deal because we're providing, as some people in the industry would say, massive value, and our clients can fire us at any time if they want to. And if we're not providing a value that's an excess or some multiple of that fee, then we don't have to be hired anymore.

So yes, we are a little more expensive and we would argue that it's worth it. The services is of higher quality for all of the reasons that we've said. So Tommy, you asked me if you served less, so if we served 25 clients instead of a hundred, would we be better financial planners? Probably not. There's some–yes, you have to see enough people. You have to go through enough situations. You have to be present enough and informed enough and in it enough to be good, right? If you were a major league baseball player and you only get to play one game out of 160 games a year, you're probably not as good as the person that's starting all 160, is it 162 games, Mike?

Michael Mason: 162.

John Mason:So you've got to be a, you've got to have some at-bats. If you don't have some at-bats, you're probably not going to be of the same caliber as somebody who's at the plate every day.

Ben Raikes: Yeah, I think another way to echo that, John, is you don't want to, if you're going in for some type of procedure, do you want the surgeon to say, “Yeah, I only do about one of these every six months or so I'm a little rusty, so I might need to get back into it.” You want someone who's well-practiced.

Tommy Blackburn:And I also don't want the surgeon to be like this, come in there dragging and being like, “Man, I've done 50 of these today. Here we go.” It's, I want that balance, right?

John Mason: This is my seventh brain surgery. Awesome.

Tommy Blackburn: Minimum amount. I want to know what you're doing, but I also don't want you to be so overworked. I'm worried that you're going to fall asleep here..

Ben Raikes:Exactly.

Michael Mason: Hey John, what you definitely don't want to hear is you walk into surgery. “How's it going, Doc?” “Back to back to back. It's back to back to back.”

John Mason: Yeah, that's a shout-out to my Uncle Ken. That's right. We're back to back to back all day. Well, guys, we're, yeah, we're getting right towards the end of this. We're about 30 minutes in. We wrote down as one final note, and we've been alluding to this the entire episode, is it's a win-win.

It's a win-win if we're healthier, if we're more motivated, if we're our best self, both at home, with our families, if we're our best self at the office. Are we perfect? No. But it's a win-win, and we talked about this as we were preparing, you may not believe in trickle-down economics if you're listening to this episode, but trickle-down happiness from the advisors to our clients is a real thing.

Because what that means is we're healthier, we're better, we're more motivated, and we're going to do this for longer. So the trickle-down impacts of all of these decisions we're making to present our best self every day is a direct benefit to our clients because we're going to be able to do this longer.

Michael Mason: That's perfect. Ben, I've got one other statement to piggyback on what you said. My favorite statement when people ask today, “How are you doing? How's it going?” I don't know how it could be any better, but I'm always willing to find out. So that's where we are today.

Ben Raikes:I love it.

John Mason: Well, maybe we can just go, we used to say around the table. Now we can just say like everybody take a turn, right? So what are some final thoughts that you have on this episode? It could be action items. It could be what we're doing better now than we were before because we're limiting our capacity. It can be just general final thoughts, financial planning action items, anything that you see fit. Let's go around the room here.

Ben Raikes: I'll start, John. And I think what we've been talking about for this entire episode, if you're someone who's listening out there and you haven't hired a financial advisor, this is a great question to ask that financial advisor that you're potentially considering hiring. Just hey, “How many client relationships do you serve?”

And it's everything that we've been talking about. You probably don't want somebody that serves 150 to 200 and you probably don't want somebody that's only serving 25. You really need to find that sweet spot and it's an important question to ask. You don't want your advisor to be overstressed or really not doing anything at all.

Michael Mason: Yeah, and I'll take the next opportunity. John, you mentioned fees, so when you're searching for that financial planner and you find one that is not overly committed, understand that fee-only is where your fiduciary financial planner is going to be. And guys, I've been thinking about this for over a month. So I want to get this thought out.

A fee-only, to the people that are listening, and we hope, and we know we've got listeners all over the country and because we do our meetings virtual, wherever you are, you can have Mason & Associates on your team, you know, at 1.5% for the first 1 million dollars. That's our fee. It's pulled quarterly, annual fee’s 1.5. So that's 15,000 on a million dollars. Just shy of four thousand dollars a quarter. And as John said, if you don't like what you're getting, you can terminate that relationship at any time. You get into a world of not fee-only, and then there's a commission opportunity.

There's some commissions out there that are 7%. That same million dollars is seven, 70,000 dollars to that advisor. And if you wake up six months from now, you can't get it back. It's 70,000 that we got to work really, really hard for the next five or six years for those 15,000 dollars a year to add up to that one commission.

Tommy Blackburn: Well, Mike, you kind of just took us down. It definitely piggies back, but man, almost a whole ‘nother episode. I think we could do on fee-only and everything kind of unpack what you just put there. I think it did give me a thought of I've encountered this question before of what is fee-only? You illustrated how we go about being fee-only.

There are a few different models there. So ultimately what fee-only means is the only people who pay the advisor are the client. Our clients do that by paying us from the investments we manage for them. Some advisors work on an hourly basis, some work on a flat fee type of arrangement. These are all fee-only compensation methods.

So I just wanted to add a little bit more as to what fee-only means. And it just means that the only people who pay the advisor are the client. There are different models to do that under. We've talked about the premium fee. It's interesting, right? Like we firmly believe in controlling costs for our clients, keeping everything as cost-effective as we possibly can because one, we know we're a premium, so we try to keep everything else low, but value is worth paying for so we look out at it and we say, “Well, other folks who aren't adding much value, they're just managing a portfolio, doing very basic things if anything, and they're getting close to a percent.” We absolutely believe in our services and we can tell you wholeheartedly, we believe that one and a half percent is well justified and I think it's anything in life, right?

Do I want the premium experience which costs more? Or do I want the low cost experience, which sometimes the low cost is just as good. Many times, there's a difference there. So you have to figure out which service you want. Are you getting what you pay for? Ben hit very well. I was thinking that was really was going to be my point of if you're interviewing others, if you're looking for an advisor, how many do you serve?

And so not only how many do you serve, but are they intentional about how they structure that service? And then if you're looking at a solo advisor, it's not to say don't use them, but I would ask the question of kind of what is your team? What is your succession plan? What is the backup plans here? John has mentioned there's five of us.

We think we would say we're pretty sustainable and clearly we can work from all over the country. So I would put that into consideration as well.

John Mason: Well, it's no surprise. Well, it is a surprise. Every time we do this podcast or we all get talking, we all think so similar. So you've said between the three of you, so many thoughts that came into my mind, things that we do better now is we have all of the clients on the same service calendar.

And what that allows us to do is say, “Here's your pre-retirement appointment.” Then they retire. And then you have your post-retirement tax adjustment appointment. So because we're a hundred families per advisor, that's so much more structured than what we used to do, which was, oh, man, like we're just going to catch that whenever we catch it, right?

So we have these dedicated meetings wow. We're able to be more proactive like Ben said earlier, because we're serving less families, we're just doing it so much better. Our succession plans’ in place. As you think about interviewing other advisors, it's not enough to say, “Are you fee-only?” That doesn't mean that they're a good advisor.

Asking how many families they serve isn't enough to determine if they're a good advisor. Like Tommy said, you have to go through, “What is your process for success?” And when interviewing a financial planning firm, the solo is fine and older advisors’ fine, a younger advisor is fine, but what is the sustainability or run rate of this firm?

What's the end game? And if you have an advisor who's lighten the candle at both ends, that's going to burn out or break at some point. So what is the sustainability of the firm? And that those are kind of the questions like are you going to be able to provide massive value? And is it sustainable in the long term?

And last but not least, we mentioned our fees so let's do it again, and let's ask the audience a question. Do you even want to know the fee you're paying? Do you even want to know? If not, you should probably hire somebody that's not transparent, maybe pay them a commission, maybe buy a surrender charge product, but if you want full transparency, and you want disclosure of conflicts of interest, and you want to know what you're paying and what you're getting, the only place you're going to find that is a fee-only financial planning firm.

So guys, what an awesome episode. Thank you for doing this. This is the financial planner-to-client ratio. Another episode of the Federal Employee Financial Planning podcast. Remember things are what they seem. We're here to support, empower, educate, and motivate you to make changes in your financial plan.

We will see you very, very soon for the next episode. Hopefully, you're watching this on YouTube. Again, Mason & Associates Federal Employee Financial Planning podcast. Thanks for being on this journey with us.

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