The retainer-based financial planning model


A fee-only fiduciary certified financial planner is someone who is a financial professional. “Fiduciary” means “putting your interests ahead of my own. Not equal to, but ahead. I have to act as a trustworthy agent for you. It’s the professional standard that you should insist on, but most people never even realize there’s that option. There are over 600,000 broker/dealers in the United States and about 2,500 members of the National Association of Personal Financial Planners (the main group of fiduciary fee-only planners.)  Of that group, about 200 are in the Alliance for Comprehensive Planners, which is the group I’m in that follows a tax-focused retainer-based model. Most of us are CPAs and we use the same business tools and support each other in our private practices, which provides you with continuity if something should befall me. Think about the difference between a physican and a pharmacist.  A broker/dealer investment advisor will sell you the medicines most suitable for you that he has available for sale.  A physician will tell you what is in your best interests, whether it’s free (putting your sprained ankle up on ice) or not something you can find at CVS.)

It starts with a meeting to determine if we’re good fits for each other.  Bring your issues, and goals for our relationship to that meeting.  Some examples might include:

  • Are you looking for retirement planning?
  • Strategies to provide the cash flow you need in retirement?
  • College planning?
  • On-going tax strategizing for deferred compensation?
  • Trying to figure out how to get out of debt and find the money to save?
  • Do you want someone to shepherd you through estate planning or review your insurance with nothing to sell?
  • Just hate being in charge of this stuff and want a concierge?

There’s no charge, and we won’t be solving them in that meeting.  I’ll just be determining if I can (and want to) help solve your issues. At the second meeting I’ll present what I can do for you and tell you what it’ll cost and give you some way to understand the value of it as part of that presentation. At that point you’ll either choose to become a retainer client or perhaps decide to go elsewhere.

The model I’m following schedules a minimum of four meetings a year:  we hash out your goals (and revisit them each year), set up your investments (using a passive asset allocation strategy and bearing in mind what retirement money you have already), do tax planning in the late Fall and then do your tax return in tax season. In addition we have as many meetings as it takes to implement the strategies we determine for you. This can resemble marriage counseling, therapy, and personal coaching as well as doing the actual hands-on investment trades and paperwork for financial aid or loan applications (or whatever it is you need). Most of the time you’ll be present, but it can by using technology (skype or Google Hangout or the telephone), and sometimes I’ll do some data entry or move along a project in between meetings.

If you know you just need help with a specific issue and don’t want an on-going relationship meeting at least four times a year into old age (smile) then a limited scope project retainer might work, or doing work on an hourly basis. I won’t necessarily accept those engagements but they are available for Tea & Taxes Company tax clients primarily.

The genius of the retainer system is that it is the right model to help with the implementation stage. We simply do what needs doing until it’s done. It works better for knowledge workers who spend thousands of dollars on continuing education each year to be able to answer questions quickly. It also works better than hourly work because I find myself overwhelmed with appointments so that I can’t respond quickly to emerging issues. With more clients on retainer and fewer clients coming to me for just one-off engagements I’ll be able to focus on client problem-solving, which is what I love to do.

I will always be a tax accountant.  It’s baked into me, and as a certified financial planner that’ll always be my strongest side. I will continue to have a tax season where I see more than just the retainer clients. I imagine building this out so that I have about 30 retainer clients – the amount manageable for me and one assistant – and keep as many tax season clients as I can handle as I age and my retainer practice grows. I see this as a gradual shift. I do not see the tax clients as having a large cross-over to the retainer clients: perhaps only five or six will want to change our relationship that way.  That’s okay.