For decades, commissioned advisors have known that the fee-based financial planning model has gained popularity among clients and advisors alike. But the daunting task of making the switch has left many uncertain about leaving their commission lifestyles behind.
Here at ACP, our goal is to empower, teach, and guide advisors in our fee-only, fiduciary model, which not only better serves clients but also provides advisors with a business plan that works.
Leaving the world of commissions isn’t easy, but we are here to help you make the transition. You need passion, hard work, diligence, and a strong sense of community, all of which ACP has in spades.
We are so excited to bring you a blog post that dives into the way we support advisors on their unique journeys into the fee-based world. Our post today is inspired by our podcast where we featured Meredith Briggs, CFP®, and co-owner of Taconic Advisors on her journey from commission to fee-only financial planning.
We are grateful for all of our talented advisors who help make ACP the rich and diverse community it is today. After reading this, we hope you will be excited by the possibilities available in the fee-only world and understand why once you make the switch, you won’t want to go back to your commissions ever again.
The allure of commissions
Our guest on the podcast, Meredith Briggs, didn’t get her start in the fee-only financial planning world. In fact, she began her career in a lucrative sales job. Her success in the industry was apparent, but after her family fell on hard times, she became excited to take her career in a new direction. This move led her into the broad world of financial planning.
But her first financial planning gig didn’t turn out the way she expected. After interviewing and receiving a job offer, she discovered that her firm (like many out there) was primarily focused on the sales of financial products like insurance and annuities as opposed to the strategic and problem-solving aspects of true comprehensive financial planning.
She found that she enjoyed the sales aspect of her job and the benefits it brought her and her family, but over time she felt like something was missing. She recounted a time when she helped a client with their financial strategy but there was no way for her to be compensated for that extra work.
With commission-based financial planning, she felt that the product held more intrinsic value than the needs of the client. This was never done with malicious intent but at the end of the day, certain products and annuities made the advisor and partners more money, encouraging many to push those products to their clients.
She recounted a circumstance of being advised to prioritize pushing a product over advising the client to fund their 401(k) or 529 plan. Suddenly, she was faced with an important ethical dilemma: balancing career goals and the client’s best interests.
As time went on, Meredith became interested in the strategic aspects of financial planning and wanted a way to put her clients’ needs first while still making a living. She wanted to be able to sit down with them and help them through their toughest financial problems, but in her current role, she couldn’t do that. So she started to find resources elsewhere.
Resources you need to start the transition
Without a clear path, Meredith began reaching out to other people she knew and started to establish important connections, people who served as mentors, friends, and eventual business partners. A network of people is a great way to help you make any transition in your life. It helps when you move or when you start a new job—especially when that new job means a change in your career.
Our community at ACP is one of our key assets. As a close-knit group of advisors, we find that our members create mentorships, peer-to-peer networks, and mastermind groups to learn more about our dynamic industry and to grow together. It’s through these key relationships that Meredith was able to learn more about what fee-only financial planning really was and how she could adopt that model to create a fulfilling and financially stable practice.
Another important resource for Meredith was education. Through a mentorship program, she became exposed to and interested in learning more about the qualifications needed to be a CFP®. The CFP® designation was an important part of her journey and led her to want to make the full transition into fee-only planning. Education is so important throughout each stage in your career; this is why we have a whole host of online resources for our advisors to hone their craft and teach them both what our system is and how to use it.
But remember, not all resources are external. Some of the most valuable resources come from within and that is what Meredith found to be true in her own life and career path. The transition from commission to fee-only had to start with a mindset, an idea, a yearning for something more. The drive that inspires and motivates you will be instrumental in your path through this career shift.
But even with all of these resources, she, like many others, found the transition to be difficult.
Why is the transition so hard?
Even though you may be interested in making the switch to fee-only, it isn’t as easy as turning a light off and on. There are so many obstacles that can be in your way; a few of the most prevalent are:
- Fear of giving up a certain lifestyle
- Lack of understanding of how fee-only actually works
- Being overwhelmed by the prospect of picking up and starting over
One of the most prevalent obstacles advisors face is thinking that a fee-only practice won’t lead to financial success. Even for Merideth, many mentors told her that she would need to do something else to supplement her financial practice whether it be actively managing assets, preparing taxes, or selling insurance. She recalled someone saying to her that financial planning doesn’t pay the bills.
This fear can hold a lot of advisors back from making the switch. When you have been accustomed to a certain lifestyle and income, the idea of giving all that up isn’t appealing. But what our members have been finding (and what we have known all along) is that you can create a lucrative financial planning business that is able to give you the lifestyle you want while also delivering optimum value to your clients.
Selling clients on the value of fee-only is one thing that we are passionate about at ACP and something we train all of our members to do. Understanding the value that you provide and the additional services you can give your clients will help establish a client base who knows, respects, and most of all, trusts you. Trust is one of, if not the most necessary thing to establish in client relationships and our fee model supports that trust-building process.
You won’t miss your commission as a fee-only advisor
Armed with the knowledge, resources, and community support, Meredith met her current business partner Chip Simon and is running a successful fee-only financial planning practice. We loved speaking with her on the podcast so much because she embodies the spirit, drive, determination, and passion we see every day in our community.
Once she was able to fully immerse herself in the fee-only space, she found that she was not only attracting the type of clients she wanted to work with but also building a practice that supported her own goals and dreams. Once afraid of not making a healthy living, Taconic Advisors is doing so well, they are currently not accepting new clients, and Meredith said that she is even working fewer hours than she had in previous roles. She has found both success and balance in her current practice, something she didn’t have before.
Meredith’s passion for comprehensive, holistic planning drives everything she does. The beauty of comprehensive planning is the ability to strategically create a client’s financial picture. As an advisor, you have time to see how A connects to B connects to C, and so on. She loves helping clients see the connections between financial decisions like taxes, retirement savings, insurance needs, cash flow, lifestyle considerations, and more.
Instead of drowning in paperwork, she is able to employ her knowledge and passion for comprehensive financial planning which allows her clients to live the life they want. In the fee-only space, your clients become people you really care about.
Our fee model gives them the freedom and flexibility to call and talk about an insurance question or whether or not to give a gift to a family member, or even how to pay for a moving company—questions so personal that they probably wouldn’t feel comfortable talking about it with their commissioned advisor.
There are so many benefits of a fee-only practice but one of the most beautiful and unexpected are the relationships you can develop by truly caring for your clients’ needs while building a practice and life that you love.
Meredith found that the community, resources, and education provided by ACP gave her the blueprint and support she needed to successfully transition from commission to fee-only.
Our advisors could talk all day about how their fee-only practices have changed their careers for the better. Interested in learning more about our model and how it can transform your business? Set up a time to talk with us.