The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: nealashley on October 23, 2012, 12:00:04 PM
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I'm a CPA and have looked into adding financial services to my practice. Many CPAs do this simply because it is an easy cross selling opportunity.
However, as has been noted on this forum several times, most financial planners suck and suffer from groupthink.
Therein lies my idea and my opportunity....a Mustachian Financial Planner!
I could offer the service at a flat annual fee instead of the customary assets under management fee.
I could teach the clients how to invest themselves using a portfolio of Exchange Traded funds.
I could help them review their budget and find holes/areas of improvement.
I could help them become more bada$$ all around and change their way of thinking.
I could also offer a maintenance option for those who have either achieved their goals OR can
now safely do it on their own.
It would be rewarding to help people achieve such significant goals in life.
Any ideas? Am I onto something here? Or will this fall on deaf ears.
My biggest concern is that the type of people I'm targeting will be those who WOULD
do it on their own. The rest most likely aren't going to do it with or without my help.
Any input is greatly appreciated.
Neal
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Generally I think it is good, not sure what the income potential is. I think the target should be those that make $75-175k - to me that seems to the the range where people may not have the time, energy, or knowledge to see the light and there is usually a lot of fat in the spending that is "needed" and those are the ones you can have a high impact with.
That said, once they see the light they will know that they can do it themselves and will have no need to pay you any longer.....but maybe it results in a lot of referrals. Think along the lines of life coach as opposed to financial planner.
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Great idea, especially since it's fee only. You already have a pool of clients, and now you can just add an additional service to your offerings. You'd want to make sure you're not required to register as an RIA for any of the services, but that's relatively trivial and low cost. (~$300-400/yr depending on your state and with some work you can do the paperwork yourself, I did!)
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How will you explain the fist to the face technique for providing guidance? >:>
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welcome to my world, in that I find myself among the few mustachian financial advisors around. You won't need to register as an RIA as long as the investment advice is incidental to your CPA practice, meaning - you can't hold yourself out as a financial planner or investment adviser, but if you have clients for whom you do work with already, you can certainly offer advice there.
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How will you explain the fist to the face technique for providing guidance? >:>
An additional service OP could offer.
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I work in IT but I have found myself acting as a financial advisor for several work colleagues (and friends) and I think it’s fun educating people. I do it for free because I enjoy it so much. I think that charging someone a flat fee or charging by the hour could work out really well.
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I have been using an flat hourly-rate financial planner for a few years. He has had amazing success with 2 of my uncles, neither of whom earned as much as I do during their careers, and both of whom are retired and seem to have absolutely no financial worries about spending including tons of travel, golf, constant fancy restaurants, expensive wine, etc. He is very clear about being free from conflicts of interests and works exclusively under flat rate terms. I have met with him annually for the last 4 years or so, paying for between 2-6 hours of his time depending on how complex things got that year (stock options, house purchase, etc).
In general, I think he's done well by me including moving me to Vanguard before MMM confirmed this choice. However, in the big picture, these costs do add up and I plan to rely on his services much less frequently going forward as my own knowledge and confidence increases. He's definitely not of a mustachian persuasion by default, but I have explained my goals to him and he adapts pretty well. mint.com makes is trivial to compare his guidance to the index, and so far, as you would expect, he's not outperforming the index.
So to answer your question, YES, I think it is a great idea and something I would consider. There is value in reviewing the exact details of your situation with the appropriate expert mentor who is on the same wavelength WRT FIRE.
I hope to ween myself off advice, but I do have friends and colleagues I would love to refer to a mustachian financial advisor as opposed to someone who will guide them toward un-badassly goals.
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I'm not a huge fan of the idea, but I've thought about it quite a bit.
Previous discussion here: www.mrmoneymustache.com/forum/ask-a-mustachian/is-it-anti-mustachian-to-become-a-financial-planner/
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Thanks for all the comments and thoughts.
I enjoyed reading from those who are already in the industry and gave some their insights.
@arebelspy - thanks for this link. I didn't know it was out there. I will read that thread as well.
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One of my cool benefits at work is access to a financial planner on retainer - he's not a mustachian financial planner, but he seems to take a more interesting approach than most... he wants to help you determine your life goals, look at budgets, answer a wide variety of financial questions, and give good investment recommendations. He gave me "The Millionaire Next Door" on CD.
If you could get an "in" as a holistic financial advisor for a big company or group of companies, I think you could easily present mustachian ideas to a lot of people and make money doing it... the question is, how common is this arrangement? I guess it's probably pretty rare.
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As others have indicated, the face punching might be a problem. I suspect your profits will quickly be wiped out by having to have a lawyer on retainer ;-)