By Robert Roy Reed, Ph.D., CFP®
Partnership Financial LLC, Columbus, Ohio
Partnership Financial LLC has used the retainer model since we began business 20 years ago. We prefer it for two reasons: first, it is to the client’s advantage and, second, it allows us to work with a wider variety of people than is possible using other compensation methods.
Today I address the first issue: the client’s advantage. In the next post, I will discuss how the retainer model allows advisors to work with people at all stages of the financial life cycle: from young people just getting financially established, to older people transitioning out of their working life and into retirement.
The retainer model is simple (another advantage). You pay one annual fee to get all the help you need. There is no extra cost for unanticipated services or meetings. This model is particularly well suited for comprehensive financial planners, that is, professionals whose services go beyond mere investments.
In our office we know that every year everyone must have their taxes prepared and investments reviewed, plus they need a tax projection so they can plan around their current situation. But other issues can also arise. Some can be anticipated (imminent retirement) and some cannot (you need a new roof, right now!). With the retainer model clients don’t have to calculate if they can afford to address an unforeseen issue or have a question answered. There is no extra cost, so they can just pick up the phone and we get to work.
The retainer model ensures that unanticipated issues don’t become unaddressed problems.