Why We Became Fee-Only Financial Planners
In this episode, Bridget and I share our journeys to becoming fee-only financial planners and why it was important to us to choose the "fee-only" route where we focus not only on our clients' money but also on helping them create meaning in their lives.
TRANSCRIPT:
John: How does somebody decide to become a financial planner? On today's episode of Friends Talk Financial Planning, Bridget and I will share our stories about getting into this business. Hi, I'm John Scherer, and I run a fee-only financial planning practice in Middleton, Wisconsin.
Bridget: I'm Bridget Sullivan Mermel, and I've got a fee-only financial planning practice in Chicago, Illinois. John, before we start, I want to encourage people to hit the subscribe button. It helps people find us and helps us grow our channel, so thank you very much for subscribing.
John: That's right. Well, Bridget, I'm so excited to have you here. As you can see, we're both in the same office. Bridget's up and visiting in Middleton, so it's great to get a chance to talk. I thought this would be a great opportunity to talk about why we got into this business. And I don't know the whole story about how you got to be a fee-only financial planner, so tell me what happened? How did it go for you?
Bridget: Well, I've been interested in personal finance since a young age. I used to watch Wall Street Week with my mom. I used to talk to my dad about stocks. He used to be in a stock club. They would figure out investments together. I was kind of fascinated by that. They'd all come over every six months or so, take over the family room, play some poker, and I guess they figured out some stocks, too. And so, I've been interested in it since I was a kid. I had a class in economics when I was in high school, and I won the stock picking contest, because I just figured out how to leverage things😊
It's something I've always been interested in, so I decided to go to business school. I've also been interested in small businesses because people put so much into them and they're really creative because people come up with new stuff all the time. I just think that's fascinating. I've always been fascinated by it. And so, when I was in business school, I decided to get an accounting degree and a marketing degree because I felt like I would learn the most about business if I had to both figure out how to sell stuff and how to track all the transactions.
And I worked at Starbucks in the early days. It seems crazy now, but at one time that was a small business and that was very interesting. I have always struggled, though, because some of the businesses that I've worked in, it's all been about money. And, of course, you want to make money, but I feel like people want something more. For me anyway, it's important to find some meaning outside of that. It's not just about money. So I've had periods of my life where I haven't focused on money at all, and I didn't really like that either.
That didn't quite hit the spot either. So now I look at it as an end conversation. I'm looking for ways to make money and find great meaning in my life, and a career in financial planning actually does that for me. I had a tax practice before this, but that was more a matter of saying, “Oh, can I have my own business?” And the answer was, “Yeah, I can do a tax practice. This is great.” But financial planning practice really helps people figure out how to make their dreams possible, and it can be very meaningful.
John: I love that idea of the financial planner who doesn't focus on money😊
Bridget: Yeah, money is part of it.
John: Yeah, absolutely. But for most people it is only how do you make your investments; how do you make more money? For you, however, this is not necessarily the goal. Maybe that could be a tagline for you: the financial planner that's not focused on money. It'd be different.
Bridget: Well, I mean, I am really focused on meaning. I want people to find meaningful, happy lives, and money is part of that, too. I’m not saying, “Okay, I'm just not going to make any money.” I think putting them together is the most interesting.
John: In an earlier episode we talked about money as a means to an end, but not the end itself. That really resonates with what you were saying just now.
Bridget: Yeah. So that's my story. How about you, John? Let's talk about how it all started for you.
John: Yeah, it's funny, I had not thought back on it until hearing you talk that I've always been interested in money. And I remember I had a little book from the Wall Street Journal that talked about how stocks work, and I thought that was the coolest thing back in those days. And my degree is actually in education. My parents are both teachers, and by the time I graduated, I decided I didn't want to be a teacher. But after four and a half years, I was going to get a degree and get out and do something. And a college roommate of mine, his father-in-law, ran an insurance agency in Madison, and he said, “Boy, you should come out and see. You can sell insurance and sell investments. You can do financial planning.”
I thought, “Well, that sounds like a lot of fun.” And I quickly figured out that selling investments in insurance was not financial planning, but I sort of liked the idea of things. And so, as I was trying to figure out what I wanted to do, since I wasn't going to be an insurance salesman for life, I came across Burt Whitehead, who started the Alliance of Comprehensive Planners, of which Bridget and I are both members. I'd seen his picture on the front page of a trade publication. He was wearing a cowboy hat and standing on a pier up by his house. The article was about how you can do fee-only planning for Middle America.
They called it regular people. I didn't know a lot of rich people, and so the idea that I didn't have to sell anything, and I could just give people advice and help them was really appealing. I thought, “Oh, that's exactly what I’m looking for.” And it goes back to us when we first bought our first house. I had a friend of mine who helped us buy the house, but the more money we spent on the house and the faster we bought it, the more quickly she made her money. I thought, “Listen, whatever you need to make, just tell me what it is and be on my side.” That experience of I want to be on somebody's side and not having the question, “Oh, jeez, why are they saying to buy this insurance or buy that investment?”
So that's how I got into it, and I've always been interested and had this opportunity to actually give people advice, and you don't have to sell things. And I go back far enough that I remember talking with other people in the advisory world and saying I was doing fee-only, and they would say, “Well, yeah, but what do you sell?” I would respond, “Well, nothing but my advice.” They would counter, “Well, yeah, but how do you get paid?” Again, I’d say, “I charge people for my advice,” They would ask again, “Yeah, but what do you sell?” That just did not compute for them. That's my story.
Bridget: In the financial world, a lot of people are actually not financial planners, they're really trying to just help you with your investments or sell life insurance. You say, “Oh, I want to make plans.” And they say, “Well, that must involve life insurance.” And I remember when I started out in financial planning talking to somebody who was an estate attorney, and he said, “Well, how can you stop yourself from taking these huge commissions on life insurance? You could make $50,000.”
First of all, I don't know at all if that is true, but I said, “Well, that's not what I want to do. I don't want to try to sell somebody life insurance. It's just not what I want to do.” And when I had a tax practice, some CPAs sell life insurance; they sell annuities. And I'm not going to say that's never the right thing to do, but that's not the approach I wanted to take. I wanted to sell my advice and then tell people what I really thought.
John: Yeah, that's one of the things I tell people now when they look to hire us. You might question our recommendations, thinking, “Should I buy this insurance or make that investment?” But I don't want them to question my motives, saying, “Of course, he's recommending more insurance or more of this investment.” To have that independence is really valuable for me as I thought of my experiences and so that's why I try to deliver that to clients.
Those are our stories. Hopefully seeing behind the scenes into how two people got into the business is of some interest. And as we wrap things up, I'll just remind people to subscribe. Bridget and I mentioned the Alliance of Comprehensive Planners. If you're looking for somebody to give you holistic, comprehensive, tax-focused advice, check out acplanners.org to find an advisor in your area. With that, until next time.
***
To schedule a free 15-minute prospective client call with John Scherer please click here.
To connect with Bridget Sullivan Mermel please click here.
For advisors around the U.S. visit https://www.acplanners.org.