Is it Anti-Mustachian to become a Financial Planner?

[Blaise]

Hey everyone, I'm looking for some feedback about an idea I have.  As I'm sure is the case with many of my fellow Mustachians, I get pumped when it comes to finding new and exciting ways to drop my expenses, but I'm not very happy with the money making side of things, i.e. my job.

To accelerate myself towards freedom, I am considering doing some paid financial planning as a side hustle.  As a CPA, I'm already fairly qualified to do this type of work, even though I have no specific experience or expertise when it comes to personal financial planning other than reading PF blogs and books in my spare time.  Before taking on any paid work, I would be sure to buff up on relevant PF topics.

Even though I'm new to the ways of the mustache, I feel like I could really help people without the desire, knowledge, or time to DIY when it comes to planning for their financial future and potentially considering ER.  Obviously everyone reading this blog would scoff at the idea of paying for money advice, but most of the general public isn't as motivated to be so hands on with their finances.  And of course I would be one of the "good guy" financial planners, offering sound, mustache approved wisdom.

Judging from some of the other posts on here, financial planners aren't looked at all that favorably in this corner of the internet.  But what do you guys think?

Is it Anti-Mustachian to be a paid financial planner?

[arebelspy]

I've thought of it too, because I know so much about the topic and feel most financial planners are just so wrong about much of their advice.

I'd bet a lot of us here have.

In the end, I do think it is anti-Mustachian, at least in my mind, unless dong it for free. I wouldn't want to be taking people's money, even if I saved them much more than my fee.

The other major problem is you can't be giving punches in the face.  So much stuff I'd want to tell them "you don't need the super deluxe cable package" or "cut down that cell phone bill" "don't get a brand new car" ... And then ultimately they just wouldn't listen.

Most people seeking that sort of advice will find it.  But most people don't want that.  They want to be told "invest your retirement with me, buy my annuity, you will be a millionaire, look how good this looks on paper" and so on and so forth.  The financial advisor market exists as it does because it makes them money but also because that's what people want to hear, and the advisors are telling people what they want to hear.

More Mustachian would be debt counseling, where you can just tell them how it is, and not charge them, IMO.

[shedinator]

I don't think it's necessarily a bad choice, so long as you're approaching it the right way. But the right approach would be teaching people that they don't really need you, so it might not be very good for business. What about financial advising, or personal finance classes? Dave Ramsey's Financial Peace University,* for instance, has a one-time fee for a short class that gives people the tools to tackle their finances (the Dave Ramsey way). Crown Financial offers something similar, and I'm sure they're not the only ones. If you could give seminars/courses on frugality and DIY financial planning, you could probably still make a decent profit, and not be taking a regular cut of the money that your clients might otherwise be saving. Heck, you could even do it the Dave Ramsey way- I think he offers a certification course for a few grand that would let you teach his materials, if you're in to that sort of thing.

*I am not an advocate for Dave Ramsey or FPU. He seems like a nice enough guy, but I'm not totally sold on his ideas. He was just the first example that popped into my head.

[JJ]

I think it's a great idea, and I would have absolutely no problem morally or ethically charging for it.  You would be in a position to change their lives forever, save them tens or hundreds of thousands (or millions potentially) of dollars in waste and let them spend decades extra with their kids & grand kids.  Even if you make a couple of thousand in fees it is still extraordinary value for someone who is on the wrong track.  Teaching them they don't need you is also fine and I would think a highly sustainable model - you will get a lot of recommendations if you provide good, honest advice that makes a real difference.  If you are concerned that up-front fees would ding their already broken cash-flow you could spread it out over a year or so with a mentoring model that reinforces behaviours (e.g. monthly transaction analysis for all expenditure) - you may end up with, say, 10% of the improvement they make over the first twelve months - I'm sure you can figure out a model that works.  Maybe pro-bono for difficult situations.

What I would say is make sure you own house is in order with respect to cash-flow etc so you are never tempted to do the wrong thing.  The shedinator and arebelspy make excellent points - I don't think it will work if you compete directly with "normal" financial planners.

One more comment on charging - I have thought about this a lot in a different part of my life.  Most people do not _hear_ advice if they do not pay for it because they do not value it.  I do not feel comfortable about receiving money for some classes I teach, but I still charge and then pass it on to a charitable cause.  This approach, in my view, provides a lot more benefit to whoever is trying to learn something. 

I say go for it!

[velocistar237]

I think there's room in the market for financial planners who can steer people in better directions.

How about the New Road Map Foundation, the organization carrying the YMOYL baton?
http://financialintegrity.org/index.php?title=Speakers

[arebelspy]

What about financial advising, or personal finance classes?

This is more Mustachian, and seems to be what velocistar is thinking of as well based on his last post.  I don't disagree with the two of you.

A fee-based financial planner could be okay.  In my mind though, their main goal should be to get their clients to not be repeat clients.

That's the opposite of their own financial interest, and - IMO - a unicorn.  You just won't see it.

I don't think a commission-based financial planner could ever be Mustachian, it's the anti-thesis of teaching them to do it themselves and take control.

[Mactrader]

I do not think it is (and it's actually exactly what my side business is, as I switched careers and miss it terribly). Think of it this way. MMM spends his time doing carpentry that anyone can easily do if they put the time into it. He charges a fee for these products for the convenience of not having to do so. If you are an ethical fee-only financial planner, there is no difference. You are bringing clarity and rigor to an otherwise chaotic financial situation, and being fairly compensated for it.

[arebelspy]

Got the advice ready to go for you:

Step 1: Go read every post, from the beginning, on mrmoneymustache.com
Step 2: Implement all his advice
Questions?

;)

[gangr]

If you do end up doing FP, have you looked into tacking on a PFS credential to your CPA?

[nondualie]

I see no problem with it.

People charge to be personal trainers, despite the fact that plenty of people could do well to just do body-weigh exercises, walk some stairs, and eat less crap.

There are people who could really use help and don't have time or ability to read blogs, books, and figure everything out for themselves.

You could set them on a road that really helps them in the long-run.  And I think that is a noble cause, even if you charge $250 for a two-hour consultation and review of their finances.  As long as you have something real to offer and not just the usual crap, I'd think it'd be worth someones money to get the inspiration and blueprint for MMM'ing their life...even if it's a 15-yr old milk-mustache to start ;)

[MacGyverIt]

I've thought of it too, because I know so much about the topic and feel most financial planners are just so wrong about much of their advice.

The other major problem is you can't be giving punches in the face.  So much stuff I'd want to tell them "you don't need the super deluxe cable package" or "cut down that cell phone bill" "don't get a brand new car" ... And then ultimately they just wouldn't listen.

Funny you mention this, I met with my FP last week and during the conversation he said, "I can't tell people to not buy a new car, I can only help them with what they have left over." Read: clients want to make lots of money but don't want to stop spending in the process to invest/save more. I have a feeling he's got a lot of spendy-spendy clients whom he'd like to give some major MMM treatment.

If you could work as a personal finance/frugality consultant in addition to FP/CPA that would really provide a full scope service by increasing people's income potential/quality of life, IMO. How many people are going to FPs to grow their remaining money but not really minding their spending in the slightest to maximize their income? FPs don't want to offend/tick off their clients by asking "Why the hell are you driving an Escalade when you make a tenth of what I do???". Having the willingness and ability to declare (to quote areblspy) "you don't need the super deluxe cable package" could transform a potentially hum-drum FP gig into something really fulfilling -- to know you are helping people learn the MMM/ER lifestyle, divorce themselves from consumerism and get them on the road to total FI.

Heck, now I'm getting interested in the idea LOL.

[nondualie]

A bigger MMM question might be: can you make any money doing it?

If not, might be something to save for post-FI or to do pro-bono for those who most need it...a form of volunteering, etc.

Would be cool to do it through a community program though.  Seattle has classes of that sort through the Community Colleges in the distance-learning programs..

[HeidiO]

  I think it would be cool to be an "early retirement coach."  Or a "financial independence guide."   Market what you do honestly - what a niche market!
Heidi

[Blaise]

If you do end up doing FP, have you looked into tacking on a PFS credential to your CPA?

Yes, I have.  It seems I would need experience doing financial planning first, as well as additional education classes and to take an exam.  There's another certification, Certified Financial Planner (CFP) that I could get as well, and would only need experience and to take an exam.  Either way, I need to get real world experience before I could add the title, so it's something I could always add on down the line.

[Blaise]

I've thought of it too, because I know so much about the topic and feel most financial planners are just so wrong about much of their advice.

I'd bet a lot of us here have.

I agree, most of us are probably better qualified to give financial advice than the average financial planner, especially commission based ones. 

More Mustachian would be debt counseling, where you can just tell them how it is, and not charge them, IMO.

Yes, I think something along the lines of counseling, or other volunteer work would be a great thing to get into post FI.

[Blaise]

Thanks for all the advice guys.  I am definitely going to research it more, and maybe can start with some family and friends to get practice and get my methodology down.  In fact, I already went over my 20 year old brother's finances with him.  Although he doesn't have a very complex financial life, I think it was very helpful to him to see what his everyday money choices are already costing him.  Maybe my niche could be college students.  If they learn the ways of the mustache when they are still young, it opens up a whole new world of possibilities for the rest of their lives.  Hell, I wish I knew all this stuff when I was 20.

[boy_bye]

Maybe my niche could be college students.  If they learn the ways of the mustache when they are still young, it opens up a whole new world of possibilities for the rest of their lives.  Hell, I wish I knew all this stuff when I was 20.

that could be really helpful to them ... just think about how you'd market yourself, since most college students don't have an extra couple hundred laying around to see a financial planner.

maybe you could develop a workshop to be given at a college as part of their activities budget ... or you could target your marketing efforts to adults who want to get a college grad a really USEFUL present ...

[velocistar237]

Maybe my niche could be college students.

People are always talking about how no one knows about personal finance anymore ever since home economics classes went away. I'm sure some colleges would be interested in someone who could impart that knowledge through a class or seminar. After all, that frees up money that would be spent on cars and houses so that students can donate to their alma mater.

[smalllife]

Maybe my niche could be college students.  If they learn the ways of the mustache when they are still young, it opens up a whole new world of possibilities for the rest of their lives.  Hell, I wish I knew all this stuff when I was 20.

Side note: hands down the best class I ever took in college was a Personal Finance course.  It was funded by an endowment specifically for that purpose: college seniors who were not in the business school got taught the basics of every financial aspect of life, and the "professor" had to be non-academia based.  It always had a wait-list even though it was at 8am and attendance was mandatory.  It started me down the MMM path, although I've always been interested in personal finance topics. 

Point being: there is definitely a market, but you have to find a way to do it on the cheap.  Adjunct professorship is a way to do that, but I know all universities are not as amenable to such a set up.  Business clubs would be open to charging for a one-time seminar.