Why I Started My Own Financial Planning Firm

Mark Meredith, CFP®

Originally Published on April 8, 2019

On March 6th of this year I started my own financial planning firm. For my first blog post at Meredith Wealth Planning, I wanted to tackle:

  • Why I started my own financial planning firm.
  • How it is different than every other firm.
  • Why this is beneficial for my clients.
  • What to expect from this firm in the future.

“I am going to start my own financial planning firm”

I told myself this many times. There was never a timeline as to when I planned on pulling the trigger. I just kept telling myself I’d do it “someday”. Many excuses would come to mind as to why I shouldn’t do it:

  • “I work for a good company”
  • “I should wait until my kids are older”
  • “Why would I risk it?”

Last year the company I worked for was bought out. After reviewing my options I decided it was now or never. I chose to do it now (when my wife was 7 months pregnant!). If I hadn’t, I was terrified of the regret I would face.

While there are many other wealth management firms to work at, I never considered applying at any of them. Traditional brokerage firms are littered with conflicts of interest that do not align themselves and the clients properly. When I looked around the independent advisor marketplace in the Metro-East area, I noticed there was a lack of fee-only firms.

Further, the fee-only firms that do exist generally assess client fees based on assets under management. I find this to be inequitable and again leaving open conflicts of interest.

The value of independence:

I do not have to please shareholders and analysts, because I am the only shareholder. There are no sales goals to hit because I only have one product to sell, advice. There will not be any revenue to Meredith Wealth Planning outside of the annual client fee we charge.

Brand names do not add additional value to clients in this industry. The days are long gone of listening when E.F. Hutton speaks. Today there are over 17,000 state registered investment advisors, and over 12,000 federally registered.

Expenses (there will be an entirely separate future post on this issue):

It doesn’t take twice as much time to manage a $2 million portfolio as it does a $1 million portfolio, but under the industry standard 1% annual advisory fee, the $2 million client would end up paying twice as much. The higher net worth clients end up subsidizing the cost of advice for the lower net worth clients. I’ve implemented a simple flat-fee structure. That fee is $5,700 annually per client household.

As far as I am aware, very few firms across the country have implemented a similar fee structure. I doubt many will be quick to adapt to it. They will wait until change is forced upon them by the marketplace, which will probably take many years.

I would rather disrupt my own business rather than wait to be disrupted by somebody else.

Growth is not the mission:

Between now and the time I retire, I do expect the firm to grow a lot. However, growth is not my primary focus. My mission is to be an exceptional financial planner for 100 – 120 families, and if I do that, growth will come as a result. Once I hit my personal capacity, I will hire more people and they too will be capped on the number of clients they can work with.

At my former employer I was the responsible financial planner for over 400 households. While that is already way more than one person can handle, I was still expected to grow that number each year. Under that business model, you become a reactive financial planner as opposed to a proactive one.

Less is more:

The clients will receive better service, more proactive planning, and a cut in expenses from this change. Some clients may be concerned that I am now a staff of 1, as opposed to 20-30 wealth management employees. There will be no difference in the end product though.

There are many firms out there with large numbers of employees. If they all operate independently of one another with no cohesive team structure, the number of staff is not much of a benefit to the end client.

Setting an example:

Since my son was born in 2016, I have become much more of a wimp (not that I was such a tough guy to start with). We expecting our second child (a girl!) on May 16th. I have had many thoughts about their futures, and what type of example I can set for them.

There is no shame in working for someone else. I did it since I was 15 years old, until now. What I want to show my children is that they can control their own destiny. They do not have to worry about a boss or company determining their success.

A few years ago a good friend of mine sent me this video by Larry Smith titled “Why You Will Fail to Have a Great Career”. I have watched it a few dozen times, and there’s always a part that gave me goosebumps. When Smith mentions that one day your son or daughter may come to you and tell you what they want to do with their lives. How will be conditioned to respond? You might say “I don’t know kid, there’s a lot of risk to that, it may cost a lot of money, it may not work out….etc”.

Alternatively, you could say “Go for it kid, just like I did”. My father was able to say that to me, and I want to say it to my kids as well.

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