Well, everything should be in place to manage client assets very soon. I've chosen the RIA custodian, provided them with all of the necessary paperwork, and now I am waiting on them to overnight a package to get me started. Of course, I will need to be trained on their systems, paperwork, and such, but I can now see the light at the end of the tunnel. More on this later.
Up to this point, I have been collecting fees for financial planning engagements. Moving forward, I expect to retain these clients by providing ongoing advice, under an annual agreement with a retainer type fee structure. The challenge here is that the planning process can be very labor intensive.
Therefore, I can only accept two or three new planning clients per month. I have been charging $2,000-$5,000 each and when you do the math, using $3,000 as an average, it's difficult to generate enough revenue with this as my primary source of income. I will either have to become more efficient ?EUR" something I fully intend to do ?EUR" and/or increase my fees, something I probably need to do. I believe the fees are a function of the level of client wealth and the advice you're providing. Clients are willing to pay a fee, provided they receive value.
Let's talk about providing value in financial planning for a moment. In the past I have been with organizations where planning was simply talking with the client, getting a rough idea of their wealth, and presenting some isolated strategy, such as a series of rolling GRATs to assist them in gifting assets. This is obviously a solution in the planning process, but in and of itself, I don't believe it constitutes planning.
