What does a real financial planner actually do—and how do you know if you’ve hired one? In this episode, Michael, Tommy and John break down the most common misconceptions about financial planning and explain why it’s about much more than just investment management. You’ll learn why financial planning is especially crucial for federal employees, how fiduciary standards impact the advice you receive, and what red flags to look for in a planner.

They’ll walk through the history of the financial planning profession, highlight what separates sales-driven advisors from genuine relationship-based planners, and explain why trust and specialization matter more than ever. From tax and estate planning to retirement benefits and behavioral coaching, this conversation will help you understand the real value of comprehensive financial advice.

Listen to the full episode here:

What you will learn:

• What financial planning is and the importance of understanding it. (3:00)
• Why financial planning needs to have a purpose. (8:30)
• What a fiduciary is and how we define financial planning. (10:45)
• How to know whether you have hired a good financial planner. (15:25)
• The power of having a good financial planning firm behind you. (19:45)
• Why you should pay someone to manage your money. (26:40)
• How to look into different firms to see which is best for you. (32:00)
• The importance of having a financial planner who understands your unique needs. (39:15)

Ideas worth sharing:

• “If you’ve hired somebody to do something for you, yet you don’t have confidence in that firm or that person to answer your questions, that’s a good indication that you have not hired a good financial planning firm.” – Mason & Associates
• “It’s okay for the financial planner or team to not know all the answers… but we should still feel confident asking them the question first and then allow that team to maybe source other professionals as needed to get the job done.” – Mason & Associates
• “Nobody calls a surgeon that just completed a four-way heart bypass self-serving… As long as you’re doing the right things, it’s okay to get paid to do them.” – Mason & Associates

Resources from this episode:

• Mason & Associates: LinkedIn
• Tommy Blackburn: LinkedIn
• John Mason: LinkedIn
• Office of Personnel Management (OPM)
• VERA (Voluntary Early Retirement Authority)

Did you enjoy the Federal Employee Financial Planning Podcast? Never miss an episode by subscribing on Apple Podcasts, Amazon, Spotify, and YouTube Music.

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: Hello, I’m John Mason. Welcome to the Federal Employee Financial Planning Podcast. In this episode, Tommy Blackburn, Mike Mason, and I are going to answer common questions. Why should I pay someone to manage my money? What is financial planning? And what does it even mean to specialize with federal employees? Unlike many content creators, we’re financial planners first and we do this second. In each episode, we share real life experiences from decades of helping federal employees navigate the complexities of their benefits, as well as all areas of their financial plans. Mike, Tommy, welcome to the Federal Employee Financial Planning Podcast.

Mike Mason: Good to be here. Excited about this episode. People for years have been trying to define what is a financial planner. Hopefully we can zero in on what you should be looking for in a financial planner.

Tommy Blackburn: Yeah, happy to be here as always and certainly excited about this topic. I will do my best to stay off of my soapbox and because sometimes you get pretty passionate about this topic, but I think there’s a lot of good information here as we continue to try to drive home what it is, what it should be, and why it’s important.

John Mason: Well, it’s timely. Today is March 3rd, 2025. It’s our second episode for our audience. You’ve probably gathered now that we kind of surge our episode recording. So it’s our second of the day. And there’s no surprise to the three of us, as well as federal employees across the country, that the current administration and everything that’s going on with the Department of Government Efficiency is causing grief and anxiety and fear across the United States, particularly with our federal employee clients and potential clients and listeners of this podcast.

It’s unprecedented what we’re going through right now. And we know, guys, I mean, the amount of people that are calling our office for introductory phone calls is up. The amount of people that we can help we know is up. So folks are gonna be searching for a financial planner. They’re gonna be searching for a financial planner for a federal employee. So I hope this episode will continue to drive home what is real financial planning and hopefully it will drive home or give people some takeaways on how to select a financial planning firm or interview a financial planning firm. In fact, we have a YouTube video coming out shortly and I think the title of the episode is ‘Financial Planner Near Me’ because that’s typically gonna be what you search for when you’re looking for a financial planner.

We would suggest that’s probably not the best search term going forward. So before we answer the questions that we’ve highlighted in the introduction, what I’m about to say is why there’s so much issue still with the term financial planning is that most people don’t even know what financial planning is. And it’s so bad. Well, let me backtrack. The Certified Financial Planner Board, CFP Board, not college football playoffs, Certified Financial Planner Board was founded in 1985. So this year we celebrate 50 years of having the CFP board.

Arguably, certified financial planners and financial planning is not yet a profession. We’re still trying to grow into this over time and we’re trying at Mason & Associates to fast forward that as much as we can. So it’s a new industry; it’s a new profession.

But here’s what Google AI says. If you Google financial planner, this is what Google AI says. It says, “Financial planning is the process of managing your money to achieve your financial goals. It involves tracking your cash flow, budgeting, investing, and paying down debt. And here are the steps. Assess your current financial situation, set goals, create a plan to achieve your goals, fund your goals through savings, and monitor your progress.”

So AI, artificial intelligence, is supposed to source the entire world of data, the entire internet, to give the best answer possible. And Google AI gave us that.

Mike Mason: Yes, it’s kind of amazing because nowhere in there was assess your life insurance needs, maximize your government pension. Should I have FEGLI option A, option B, basic? It’s not financial planning.

Tommy Blackburn:Well, yeah, I mean, you could drill it down so far, right? To me, it almost starts at like, what’s your where are you at in life and what are we trying to accomplish? And then all the pieces fill in around it. So if you’re early in your career, it’s a whole set of things versus if you’re approaching retirement and what those set of things should be, as well as just like, who are you? It’s very individualized. So it has to focus on the individual first and then fill in around it.

And yeah, it’s a young want-to-be profession, I would call it. And my hope and desire is that we will one day get to be in an actual acknowledged profession. I think we’ve made progress and continue to make progress. But I think about as a CPA, what do I think a traditional profession looks like versus where is financial planning? And that’s where I’m able to, at least personally, kind of look and see, okay, I can see where I think we need to go or to actually get to that same level of establishment as a profession.

Part of that is some regulation around who can call themselves a financial planner or any other synonymous title. I think that’s very confusing because currently anybody can pretty much call themselves a financial planner with no background, education, certification. It’s not a high bar to be able to call yourself that so some regulation around title, as well as a licensure. So CPA is a license granted by the state, and you have a national uniform exam and boards that help set things, but that is not the case in financial planning.

So this is the soapbox, so I’ll step down from here, but that is where we would ultimately, I think, get to the profession.

Mike Mason: Let me give you guys, and Tommy, you probably haven’t heard this one, so some perspective. When Ken and I were building the federal employee seminar that we did for 20 years, we started building this seminar in the early ‘90s. And anytime you’re going to present to a group, you have to send the presentation through a compliance department. So we built this entire seminar, how to calculate your federal retirement for CSRS, life insurance, and whatnot. And we sent it to Equitable, which was an AXA, and they thought they were financial planning firms. And the lawyers got ahold of it. And every screen had a disclosure: consult with your CPA or your attorney. And we sent it back to them and we’re like, “The CPA doesn’t know. The attorney doesn’t know.”

The compliance department thought that the attorney was the financial planner or the CPA. We’re the ones telling them how their benefits work. We’re the ones that decoded it. But even the high-powered folks in a company as big as AXA, which is now Equitable, defaulted to somebody other than them, other than themselves, to give financial planning advice.

John Mason: Not only that, not only that, when they reviewed the presentation, they said, where in here are you selling life insurance? Where in here are you selling investments? How are you going to make any money? Why the—excuse the language audience—why the hell did you even put this together? Because I’m failing to connect the dots on how we win from this at all.

Mike Mason: And guess what? They didn’t because they couldn’t connect the dots. And Mason & Associates is one from that, separate from any other entity.

John Mason: So addressing a couple quick things. The Google AI definition guys did not address any of the areas of financial planning other than investment management. And what it did a decent job at was saying your investment should have a purpose. We should invest to achieve a specific goal or outcome, meaning our risk profile, our time horizon, all of that.

So yes, your investments should be purposeful. They should be intentional. Like Mike, you said, they didn’t address estate planning, tax planning, insurance planning, retirement, employee benefits. Nothing was mentioned on any of that. Even something as simple as having an umbrella liability policy is not gonna be encompassed in that definition given to us by Google AI.

And I’ll just say to kind of continue on Tommy’s soapbox is that you can call yourself a registered investment advisor and investment advisor representative, a wealth manager, a financial planner, a financial advisor, a certified financial planner, a wealth transfer expert. If you start looking at all of these different words that people use, it is very confusing for the consumer to be able to differentiate between the two, unfortunately.

Tommy Blackburn: And I think to part of y’all story too is where we’ve come from. Actually, as we went down that, it all started with sales, pretty much insurance sales is how financial planning was born and it’s morphed into a pretty beautiful place now. We still have a lot of that out there that’s just purely sales-focused. It’s actually kind of impressive when I put it in that light, that AI summation has really gotten away from sales. So maybe we are making a lot of progress, but I think that can also be sometimes an impediment to people seeking out a planner is because they’re afraid of who is on that other side of that table. Is it the actual professional who’s going to help them and come alongside them, or is it somebody who’s just looking to make a sale? And unfortunately that still exists, but I believe that world, the world has continued to change in a positive way and that’s becoming less and less.

John Mason: So fiduciary, meaning your advice should be in the best interest of the client, not the best interest of yourself. Fiduciary is strongly encouraged, but not required. There are still people out there that can call themselves financial planners or fill in the blank of whatever jargon you want to use that do not have any fiduciary obligation or duty to their client legally or morally or ethically to do what’s in their client’s best interest. And yet they can still on their website say, “We provide financial planning advice.”

So if I’m going to redefine financial planning for our audience, Mike, I want to redefine financial planning to say a team, “One or more people like an advisor or a group of advisors who provide fiduciary financial planning advice, which means they’re going to address all areas of my financial plan to include my employee benefits, my taxes, my insurance needs, my children’s college education, my social security and Medicare in every single time that I have to go through these transitions in life where I only get to make that decision one time, they’re going to have helped hundreds of clients make a similar decision.”

That’s how I want to, and I know that’s long and could be fine-tuned a bit more, but that’s my definition for our audience of what they should expect with financial planning.

Mike Mason: Yeah. And a really good, really good question to ask yourself if you think you’ve got this financial planner is, when life hits you upside the head, when you get bad news, and unfortunately doing this for 40 years, John, you for now, 15, our clients get bad news. They get bad news when a parent dies. They get bad news when they get a diagnosis. Where are you in the line of a phone call? Do they tell their spouse first, their family, closest family members, and then you? Or do you not find out about it until you hear it on the street?

A good financial planner, you’re going to get that phone call right after the spouse gets it because that’s when you can bring all of that knowledge that you have about that family and say, “You just need to work on beating this because your finances aren’t going to be harmed by it.” So where are you in the pecking order? If your financial planner is not in those top three or four to call, they’re probably not a really good financial planner.

John Mason: Well, continuing down that path, we were joking before we hit the record button, how many times we field introductory phone calls where people call in and they say, “I have a financial planner, but I have a social security question.” And it’s like, well, that means you don’t have a financial planner. So if you’ve hired somebody to do something for you, yet you don’t have confidence in that firm or that person to answer your questions, that’s a good indication that you have not hired a financial planning firm.

One of our favorites, Tommy, is when folks call in and they say, “Hey, I’ve got this social security question. I don’t really know how my federal pension is going to work, but I’ve hired a financial planner.” And we’re like, “Well, what did they suggest?” And they say, “The firm told me to call you guys.” That’s like, oh, man, unbelievable.

Tommy Blackburn: I guess good acknowledgement that you’re not a financial planner. At least you’re self-aware enough to throw the ball to somebody else versus trying to make it up or pretend and do some disservice there. But yeah, you’re not a financial planner. And it’s also surprising to us. That’s a more extreme example, but you’ll get the intro calls too, where I have the question about Medicare, retirement, insurance, estate, financial planning type questions. “But I’ve already got a guy. He’s really good at managing my money or she.”

And that’s where we’re always just slightly dumbfounded and just that when you don’t have a financial planner, you have a money manager and they’re charging you a fee that somebody who’s giving advice should be charging you. And you see nothing wrong with this situation right now, but hopefully we’ll enlighten you in a very delicate way as you see what financial planning is, which includes money management, but it’s much more than just money management to see that to Mike’s point, you shouldn’t be reaching out to anybody else. You should be reaching out to your planner. If you have one, there’s no question as to who you’re going to reach out to with those type of questions, as well as when life happens.

John Mason:So two great ways, Tommy, for our audience to know whether they’ve hired a financial planner is do you have the confidence to reach out to that person or that team when life throws you a curveball? Do you feel confident in that team for all of your financial planning and tax planning and insurance and estate, etc.? Do you feel comfortable reaching out to that firm for all of those things? If not, you do not have a financial planning firm. Now, I do want to say that the person, your team, may not always have the answer either. So if somebody calls me with a very ambiguous tax questions on a 1031 exchange or some crazy estate planning loophole that maybe we haven’t looked at in a little while, I hope our clients still have the confidence to call me and say, “Hey, John, I want to look at a 1031 exchange,” and I’ll say, “Great. I know exactly what that is. Before we proceed, let’s make sure we cross our T’s and dot our I’s and also let me do some researching it back to you.”

It’s okay for the financial planner or team to not know all the answers. They should know most of them. They should know many answers, but they don’t have to know everything instantaneously. But we should still feel confident asking them the question first and then allow that team to maybe source other professionals as needed to get the job done.

Indication two that you haven’t hired a financial planner is if you’re having your annual review or your annual get together with your person or your group of people and the only thing you talk about is the insurance contract that you purchased last year or what insurance contract you should buy this year or what annuity would be much better than the annuity you magically bought seven years ago that’s now out of surrender and can pay them again or performance or investments or alpha and beta.

If that’s your conversation, that’s not financial planning conversation. That is investment conversation. That’s investment jargon. It’s trying to be probably—I don’t mean to be overly disparaging—but it’s either completely self-serving to get another product sale, or we’re trying to justify our fees through confusion more than likely, because most people, investment managers don’t beat the market. So we’re probably just trying to confuse through self-preservation at that point.

Mike Mason:You mentioned 1031 exchange, which doesn’t happen very often, definitely won’t be happening many times in a firm like ours that specializes with federal employees. So for a planner to say, “I need to do some research before I can answer that, it’s one thing.” But when 97% of the people in America have social security and you call yourself a financial planner and you don’t understand social security, there’s a big concern there.

And I also wanted to say, John, in our strategic planning meetings, and Tommy, you’ll know the couple that I’m thinking about on this. One of our questions is tell me about your parents. Because the people we’re working with are 59 and older. Tell me about your parents. And we asked this question, Tommy, to this couple three years ago. And the answer we got let us get in there and elevate the son to an active trustee for a father whose health was not so good. But his mind was real good and he saw the power and then dad died and the son was in there as an active trustee able to do many good things for his mother.

So it is a family thing. Now John you may call it self-serving because now we’re managing another two million dollars of assets, but it was really the intent of the question was for him not to recreate the wheel and for us to get things done in a timely manner when it was easy. Because we had to help them do it. But if we waited until dad died and mom’s cognitively impaired, now the courts get involved, right? To be able to declare her incompetence.

We were able to do it in an easy mode for them. We were going to get it the easy way or the hard way. So it was beneficial to get it the easy way.

Tommy Blackburn:And it’s ongoing. I have to jump in on that example because we’re still working with that that client and yeah, to your point, Mike, because sometimes we get this too where we weren’t involved and we inherit problems. And a lot of times those can even come in existing estate plans, whether they were implemented correctly or not. Sometimes things are way more complicated than they need to be.

That one that you mentioned, we were able to do all that good. And then it wasn’t self-serving for us to get mom’s assets. We were really just trying to help. And as we continued helping, one of the things the client professed to us was “I’m really uncomfortable with how this account was swinging with the markets.” And we said, “Well, it’s heavily stock-weighted.” And the response was, “Well, my current advisor says they don’t want to stick me with a bunch of capital gains to rebalance it.” I was like, “Well, that’s probably true on the non-retirement account. But there’s a couple million in an IRA. And there’s no capital gains to rebalance this thing.”

Right. So that was just trying to help again. And eventually it just became like, all right, you we both know this is much better served under our tutelage than where it is at this point. You mentioned Social Security and calling yourself a financial planner. Mike, my mind went, I agree. Or at least you certainly don’t specialize in retirement. Maybe you’re a financial planner for budgeting and income, but you certainly don’t specialize in retirement if you don’t understand it.

And then actually going back to that one, the ongoing piece that I’m thinking of is as tax laws have, cause I’m preparing for that strategic planning meeting currently. So I think it’s kind of timely to talk about it. As tax laws change and as we see with trust administration, how things go, I want to talk to them about the beneficiary designations on some of their accounts. And I don’t think that they’re wrong, but I think there may be a better path forward as we think about where we’re inevitably going to get. And so we need to touch base on where the family is. Maybe talk to the state attorney as well to get their thoughts on this since they originally drew it up. But I think that we could avoid some trust complications here on some retirement assets, just depending on where the family is. And so that’s just that ongoing piece of it.

We may decide to leave it as it is and revisit again later. But that’s me. That’s prime. All that entire situation we just sketched out, that’s good financial planning: addressing so many different areas as it evolved. And finally, John, I had jotted down the thing about like, let me go research that. That to me shows confidence and experience, right? You’re confident that you, yeah, I know something about that, but I’ve probably got enough experience that I also know there’s about 20 exceptions that I need to go check on before I make a statement that I’m gonna regret, right? That to me is confidence and experience.

John Mason:What a great point. And I love the story that y’all are talking about, the real-life experience that we mentioned that we’ll share with our audience and beneficiary review and a state planning document review and understanding how all of this works, like how does the asset actually get from A to B to C? That’s not incorporated in that Google AI definition at all. And we’ve reviewed beneficiary designations, maybe not every single year during a strategic planning meeting, but frequently. And we give advice, and we talk to our clients about the difference between different types of beneficiary designations, why some things would flow through or not flow through the trust, for example.

So I’m excited to talk more offline about what y’all are doing preparing for this client. But before we go to the next topic, Mike, you mentioned self-serving because I mentioned self-serving, and self-serving is not necessarily a bad thing either. Like this was self-serving because it made our life easier cleaning it up while everybody’s alive and competent. It’s certainly self-serving and self-preservation but that was also a huge win for the client.

And it did result in increased compensation for us, which is a win, but there was a commensurate additional value had by everybody in the family. So it’s okay for it to be self-serving, and it’s okay for it to be a win-win as long as the increase in fee and compensation is commensurate with an increased value that’s being provided to the client and to the family.

So I’m going through a similar one right now where a client is helping manage money for their 90-year-old parents and there were assets in about 12 different custodians and it’s super confusing and there’s multiple trusts involved, and yeah, it’s a lot of work. So I want to be clear, it’s not any bit self-serving for like the first 6 to 12 months because it’s a lot of work. And then after that, everybody gets to see the fruits of the labor because not only is it hard for us, it’s hard for the client who’s caring for the 90-year-old parent to get the estate docs in order, get the transfers over, monitor things, check the mail. It’s a big lift for the client too.

Tommy Blackburn: Well, it’s one of those things where if it’s painful for us as somebody who does it all the time, you can just imagine for a client who only goes through this once. It’s overwhelming. One thing, Mike, I want to toss it over to you because I know you’ve got something you want to share. It’s interesting too, is I think, and we’re on estate planning at the moment, there’s theory and there’s practice, right? And sometimes I think that’s where the experience and us having gone through this many times too, where we can say, yeah, I understand in theory that this is how this is gonna go, but I also know in practice working with a custodian, this is gonna get troublesome for maybe there is a simpler direction for us to go that gets us to the same answer versus going through this kind of convoluted exercise here. So that’s a professional, I think, and it doesn’t have to be a state plan; there’s so many things, whereas the art and the science to give any advice.

Mike Mason:Yeah, was just gonna, self-serving, you try to be, we’re always as honest with our audience as we can be. We gave great advice, right? Nobody calls a surgeon that just completed a four-way heart bypass self-serving, but he was successful in a heart bypass. The client lives, will live in a very happy life for the next hopefully 20 years, and he got paid to do it. When you’re in business, you get paid to do things. As long as you’re doing right things, it’s okay to get paid to do them.

John Mason: Well, that takes us perfectly into the next topic, which is, or question, whoever wants to answer it. “Why should I pay someone to manage my money?”

Mike Mason: I’ll take it. Yeah, I’ll run with it. So first and foremost, you should pay somebody to help manage your financial life, your retirement if you die early, if you’re disabled early, your estate, all the things we’ve talked about. And oh, by the way, if they charge you inside a brokerage account by managing your money at the same time, then that’s great, but I would say, you have to search pretty high and far to find somebody that only manages your money. That’s because I don’t know that you’re gonna win there, especially if they don’t know taxes. So how well can they manage your money if they don’t know that when they do something, it’s gonna generate a tax burden.

John Mason: That’s a great point. So I love maybe we shouldn’t if that’s all they do. you know, the standard fee in the industry is quoted at 1%, and it can go lower or higher based on the value that they provide or the perceived value that the firm is providing. It would be a mistake for us not to highlight the Vanguard study, which says investment managers or financial planners can add value, whether it’s 2%, 3%, or 4%, depending on which studies you read. And it could be from proper asset allocation, rebalances, making sure that money’s actually invested rather than sitting in idle cash. It could be behavioral coaching.

If you’re thinking about exiting the market right before it goes up or getting too conservative, there are ways that a money manager could add value. We would not say that outperformance alpha over and above benchmarks is where you should probably hang your hat on, but like sophisticated systems and implementation of a good strategy can add value.

The problem is there seems to be a big breakdown in communication between what clients or potential clients have hired versus what they’re actually experiencing. So there’s a lot of times where folks who start to work with us come from another financial planning firm, but all they were receiving is investment management. But in their mind, they hired a financial planner.

So this goes back, Tommy, to the breakdown or like the 50 years that we’re still trying to grow up in this profession. Unfortunately, there’s just a big breakdown in communication between what people are wanting and what they’re receiving.

Tommy Blackburn: Yeah, absolutely. Communicate and yeah, or even what they think they have, right? And so. It’s a specialized experience. We know who we specialize, what we do here. I think that’s part of it is kind of what am I looking for? Is it money management or is it a planner? And like, what kind of planner and relationship am I looking for? Because I think we kind of want to get into how we specialize or the different specializations out there. Mike mentioned a heart surgeon. Not everybody is looking for Mason & Associates, just like not everybody’s looking for a heart surgeon, right?

Maybe you needed a general practitioner. You don’t go to that specialist. So it’s matching to the right value proposition. And maybe you’re a do-it-yourselfer, and that’s understandable as well. And some people can do it pretty good. You probably still want a community of some sort. And I would almost even think with the way information flows around today, it’s even more confusing. So it can be pretty helpful if you have a, it’s hard to find a trusted professional. We get it even with all the resources to try to help you narrow it down today, it’s overwhelming. But if you can find that person, their ability to distill the information down to action for you, it’s pretty powerful. And it’s a good piece of mind, right?

Because I know when I look at other things in my life and I start doing research, it’s confusing of just, well, I’m reading this and it says this and this over here says this and these people say this and simple example popped in my mind. John, you recently wanted a backpack and you texted me and said, “What backpack do you have?” I sent it over to you, and you said, “Thank you for making my life easy.” And that’s a very boiled down example, right? But it kind of still holds to what we’re talking about.

John Mason: And you’re wearing Brooks. running shoes right now because Mike and I have been wearing Brooks running shoes for the last two years.

Tommy Blackburn: Yeah, made my decision easy.

Mike Mason: One of our favorite statements, “You only live, retire and die one time.” So if you’re not reaching out and getting help from the experience of a firm like Mason & Associates that has lived, retired and died thousands of times through our clients, you just can’t replace that experience.

John Mason: So maybe a couple of takeaways here as we dive into the last question or so would be, how do you evaluate a financial planning website or a firm? One good way is to pull their ADV, which if you went to masonllc.net down in the footer, you can pull our ADV part 2A as well as 2B, our form CRS. You can learn a lot about a firm through the disclosures that they have or don’t have on their website. You can learn a lot about a firm by seeing the professionals and reviewing their biographies. You can go to the SEC, and you can learn a lot about firms there.

The data is out there if you want to find it. And as far as fees go, which I think I don’t wanna just harp on fees too much, but I would suggest to our audience that anywhere between 0.25% and 2% is a realistic fee that you could be paying a firm to do a job for you. 0.25% could be a robo-advisor or dial-a-CFP at Vanguard, all the way up to 2% for a firm that specializes with federal employees and are near retirement with a million dollars or more.

Our standard fee is 1.5% on the first one million of assets that we manage. So the fee can go a bunch of different directions, but it should be commensurate with the value that’s being provided. The reason, I guess one other just quick example here is because it’s almost tax time, what you’re paying a CPA or tax professional to prepare your return is a much different fee than hiring that CPA or tax professional to provide ongoing annual tax planning advice. So if you’re curious, maybe ask that person what it would cost to receive a year of tax planning advice. And I’m sure you’d be shocked to see what that number is or if that service is even offered.

So next and last question is, what does it mean to specialize? So what does it mean to specialize when we say we specialize with federal employees? What does that mean? And then we also want to dive a little bit deeper into how granular our audience should be searching for financial planners. And we do have a—I don’t know if I mentioned this already—YouTube video that’s out or coming out with the search term or the title called ‘Financial Planner Near Me.’

And your local financial planner near you could be a great team of fiduciary financial planners that have never helped a federal employee once in their lifetime. We would suggest to you right now that that’s probably not, guys, the firm that should be hired for federal employees who are going potentially through a VERA or a RIF or have a VSIP coming or debating whether or not they should retire this year. That’s not the right place to go. So what is what does Google say? It’s nice to see this every once in a while.

So Google says, what does it mean to specialize? “To specialize in something means to focus your study, work or expertise on a particular area or subject, becoming an expert in that specific field rather than having a broad knowledge across multiple areas. Essentially, it means to concentrate on a niche within a larger category.”

You’ve done it more than one time is what this is saying. So I also wrote down, Your continuing education, your firm, your website, your marketing, and everything you do is designed and geared to help a specific client avatar, which for us as federal employees, enter near retirement with a million dollars or more. Let’s talk about why federal employees should be looking for, one, at least some specialty, and then how important is it to go down to level two and three as far as specifics?

Tommy Blackburn: Well, let’s see, we’re kind of starting a little broad there. So why is it important for a federal employee to look for somebody who specializes in federal? It’s someone who knows you, I mean, just instantly is in your benefits and understands it. And also when something happens in your world that’s applicable, like their visas, deferred resignations, or whatever may be happening, social security changes, it spreads like wildfire throughout our client base.

So once one client has the benefit of it, everybody is getting the benefit of that new knowledge or that change applied to their individual circumstances. And John, we’ve talked about before, and Mike, we think us having this expertise not only allows us to bring a lot of technical value to the table, but allows us to be pretty present when we’re meeting with clients. Because we’re not so concerned about, I’ve got a new benefit package, I got a new pay stub, I’ve never seen what this thing looks like and I need to dive through it. I mean, it’s second nature. So that stuff, we don’t need to spend a lot of time focusing on because we’ve got it. And so now we can just talk to you as a person and understand what’s happening with you and be present for that conversation.

Mike Mason: Yeah, I would add to this, the OPM is not going to give you financial planning advice. In fact, if you ask them a specific financial planning question, they’re going to tell you they can’t give you financial planning advice. But sometimes you get it anyhow. They don’t even know they’re doing it. Like when you have that question for survivor benefits and somebody around you that may be OPM says, “I hear many people do life insurance instead of survivor benefits.” And there you go. You just got some financial planning advice that’s probably not very good. You know, so we’ve had that question that one asked a 10,000 times, I’m sure. And we’ve heard every argument you could ever hear for why we should turn it down.

We don’t have to think about what our answer should be because we know what our answer is. And that’s like, we’ve talked about the professional quarterbacks, the paid and managed, the, Eli and who is it, Tom Brady? You know, they don’t have time to get back and think about where their receiver is supposed to be. They know where that receiver is going to be. We know what the questions that need to be asked are. We know what the answers are going to be and we know what your objections are. And when they’re not valid, we know they’re not valid.

John Mason: All good points. Adding to that the benefit of having a firm that specializes in a particular niche like us with federal employees. Tommy, you kind of hit on this, but things spread like wildfire. So when the Windfall Elimination Provision and GPO was repealed through Social Security Fairness Act, we could instantly identify 50 or 100 clients who were impacted by this. And then we get to go out to them individually and say, “Hey, this is how you’re impacted.” But then clients are also heroes for us.

We, during this deferred resignation or VRAS or things of that nature, we’re getting pinged by 400 families, here’s what we’re hearing, here was this letter that was just sent to us, here’s what they’re telling us, this is what HR is saying today, so we have the collective benefit. I mean, we don’t have access to that information, but clients share it with us so that we can be prepared to help them and other people. So that’s a value of specializing.

And then kind of adding on to both of your points about the emotional. or being able to connect with our clients on an emotional level because we don’t have to relearn benefits package, we’re also able to talk to the experience. It’s so different if I’m saying, Tommy, Mike, I know you’re about to retire and you’re going to pick one of the last three days of the month. And then what’s going to happen is this. And then six months later, you’ll be adjudicated. And this is what we’re going to do. And I know you’re probably concerned, but month one won’t be too bad because your annual leave is going to pay out. And because we already have an IRA distribution set up, we can activate an IRA withdrawal. And don’t worry about delaying social. And you just start talking to the experience of what that retirement is going to feel like.

It’s one thing to be able to communicate to a client how much money they have. It’s another thing to be able to connect with them and tell them what the experience is going to feel like and be able to be there as a partner for them throughout each one of those unique daily experiences that they’re having. You’re never going to find that in a firm that’s helped one federal employee retire. That doesn’t mean they can’t get the math right. It just means they can’t talk to the experience and they can’t be there. They haven’t seen the things that we’ve seen.

And let’s face it, the OPM manuals are pretty extensive and there’s a lot to be seen and a lot to experience. And we’ve experienced a lot in the decades that we’ve been serving. So how granular should clients go from here? Like, is it enough to just say federal employee financial planner or should it be young mid-career, inter-near retirement? Or then should we have the minimum fee that we’re willing to pay or the minimum fee that’s required from the firm?

I guess we can just all probably agree because we’re short on time. The more specific and granular you can get, the better it is. If the best you can find is financial planner for federal employees, that’s where you start. But if you can find one that can meet you where you are, how old you are, with your asset range, with the fee range that you’re comfortable paying, the more granular or specific you can be, probably the better experience that you will have and the likely chance that that relationship’s gonna blossom into the long-term partnership that you’re looking for.

Mike Mason: One piece of the granular you don’t wanna go too deep on, you said it earlier, near me, to find the best one. We’ve added Seattle. We’ve got an upstate New York client coming on. Your best financial planners may not be close to you and they don’t need to be.

Tommy Blackburn: And yes, I agree too about that diving down and the niche because the better match that you have, if you can afford and you fit each other right, that specificity, you’re going to get a such a better experience. Cause I’m thinking you mentioned, John, like, oh, they can probably learn the math and maybe they won’t get confused. Not that the math is very difficult, but there’s a lot of different like branches to that OPM manual.

And can you imagine if you’re dealing with hundreds of clients and you have one federal and they mentioned VERA to you or something else, you might begin spending time going down a rabbit hole, but it doesn’t make as much sense for you because it only applies to one person. So you’ll probably give it some effort, whereas for us, I mean, it makes plenty of sense because it impacts how many of our clients. And if they’re in retirement and they meet all these things, it makes all the sense in the world for us to go very deep and bring that very deep expertise to your situation.

John Mason: So highlighting that just one more step further is it is a hundred percent in our best interest to understand VERA and RIF because we can help our clients and we can have happy clients doing that. If I am a financial planner with one federal employee going through a VERA or a RIF, I’m probably, maybe I’m being mean, probably gonna say, you should probably talk to HR. You should probably talk to HR about that because what’s the incentive for me to dive down these rabbit holes for hours on end?

I mean, if you’re a good person, you’re a good fiduciary financial planner, that’s what you would expect. But at the end of the day, 1 out of 100, to your point, Tommy, maybe you’re not going to get that advice because it’s a lot to ask of somebody just to do all of that for one person. It’s not a big lift when you’re doing it for 400, 500 families. So I do think that that’s important.

And for us, if there was the student loan forgiveness program where you could work for the federal government for 10 years and then you’re—I don’t really know how that worked. Like, I know it, but I don’t really know it well because we work with clients who are in or near retirement. So younger professionals who have all of those issues that younger professionals do are going to be better served by somebody that specializes with them. Again, just a better, more polished experience. I think the more granular, maybe we just leave it at that. The more specific you can find, the better.

Guys, this has been a great episode. Thanks for being with me on the Federal Employee Financial Planning Podcast.

Tommy Blackburn: It’s always a pleasure as we try to make sure we don’t step on each other. Always a pleasure. Get started. Don’t let perfect get in the way of good enough. We hope you find this very helpful. We love doing this. So thanks, guys, for taking time to continue doing this together.

Mike Mason: Go ahead and wrap it up, John.

John Mason: Well, guys, thanks again. Thank you, audience, for being on this journey with us. We’re over three years doing the Federal Employee Financial Planning podcast.

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Thank you for tuning in to another episode of the Federal Employee Financial Planning Podcast. We’re financial planners first; we do this second. As always, we hope you leave this episode feeling educated and empowered to make positive changes in your financial plan.

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