Not Your Parents’ Financial Planning

Financial Planning

Not Your Parents’ Financial Planning

I’m going to make a bold assertion: Financial planning is the thing that happened before any of the world’s oldest or second-oldest professions. How do I know this? Well, I don’t factually … but anecdotally, if you consider that someone’s motivation for earning a financial resource is what he or she will actually do with that financial resource, you can’t help but come to the conclusion that the first payment made from one to another involved the forethought of financial planning. 

From there, advisors of all backgrounds have been around us for centuries. They’ve taken financial planning from an internalized practice to something that one does for another. It was only after the passage of the Investment Advisers Act of 1940 that the modern U.S. financial advisor and, later, the first cousin once removed — the financial planner — became an actual title.

When I entered the field at the beginning of the 21st century, financial planning was still a very different thing than it is today. In the last 15 to 20 years, financial planning has emerged as something more than nearly a cliche. It has become something that is sought out, rather than hoped for as a part of a relationship with another financial services provider like an insurance agent or investment broker. These changes have led to an improvement in the actual deliverable in the financial planning process: the financial plan. 

Accessibility

The first thing that sticks out to me in the evolution of financial planning is the accessibility of it — both from the professional and client side of the process. When I entered the field in 2004 as a dually-registered advisor/broker, I thought I was signing up to do honest-to-goodness actual fee-only fiduciary financial planning from day one. And while I was close, the reality was that I was given the task of finding clients to contract for “financial plans.” These turned out to provide the analysis and recommendation set the client needed … but eventually led to the positioning of a product. Also offered through me, that product was the solution to whatever problem(s) the plan identified. I was able to switch hats and go from advisor to broker, and the plan itself offered that opportunity.

This plan to sell a product model still exists today. But now, it’s not simply because the professional has a massive barrier to entry into the practice of fee-only fiduciary financial planning. Organizations like The National Association of Personal Financial Advisors (NAPFA), XY Planning Network, Simply Paraplanner, and more have broken down these barriers. They’ve made it easier than ever to guide an aspiring financial planner to a place where he or she can practice as a fee-only fiduciary.

From the client’s perspective, finding a fee-only fiduciary financial planner is easier because of this trend. When more professionals can find their way to practicing the way they want to, it creates a bigger pool of potential candidates for clients to hire from. And as competition often does, it makes the cost of finding and hiring the right professional that much more reasonable. In short — finding and hiring a fee-only fiduciary financial planner is far easier and more accessible now than at any point in the past.

Technology

Speaking of the past, what hasn’t technology changed in the last 20 years? I remember the first financial plan I ever created — and this was in 2004 — was a two-inch-thick, blue, three-ring binder with at least 100 pages of text, charts, and graphs. Recent business major, finance concentration me thought it was the coolest thing ever — a super detailed road map of the client’s financial life, with all sorts of supporting stuff to reference when needed.  Long-time practicing financial planner me is mortified at the thought of slapping down such a monstrosity with a thud, flipping through a couple of graphs, and wishing the client all the best in implementation. I mean, what if we needed to change a single variable by as little as 2%? Warm up the printer!

Technology has introduced the ability for our financial plans to nearly live and breathe. Planners and clients nowadays can collaborate over the client’s financial plan like it’s a grocery list. Quickly gaining insight into the impact of major decisions today — without having to recreate 100 pages of text, charts, and graphs — makes the pace of analysis and, more important, implementation much quicker and the overall process much smoother. Other innovations like web-meeting platforms that work on any device or the ability to chat with your financial planner by just visiting their website, allow technology to foster improvements in the accessibility of financial planning as well.

It’s Not All About Retirement and Dying

This is also anecdotal but, in my experience, many people believe financial plans exist to prepare for two life-events: retirement and death. Seemingly two very difficult interconnections of life and finance, retirement and death — preparing to make your money last after you stop working or make it do what it needs to do after you stop living — are no longer the headlines of a modern financial plan.

Today, I find a lot of great energy spent developing financial plans that focus on aiding a client in a complete journey. From the basics of cash flow management and employee benefits elections to more complicating factors like stock compensation or real estate ownership, the considerations for developing a more complete and comprehensive financial plan are numerous and sometimes very deep.

Focusing on experiences and goals both near and afar within a lifetime lead to the need for a financial plan that is responsive, easier to reconstruct and stress test, as well one that is collaborative between client and planner. Of course, developments in the accessibility of financial planning and the related technology have made this a reality for the modern financial plan and the financial-planner-and-client relationship.

Where does financial planning go from here? As always, time will tell. What’s important is to stay focused on making your financial plan do the things you need it to do for you — not the latest trend, pitch, or product.

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Jason Speciner
jason@fpfoco.com

Jason Speciner is a CERTIFIED FINANCIAL PLANNER™ professional, an Enrolled Agent, and the founder of Financial Planning Fort Collins, a 100% employee-owned and fee-only firm. He is also a member of the National Association of Personal Financial Advisors (NAPFA) and XY Planning Network (XYPN). Since 2004, he has served clients of all ages and backgrounds with unique experience working with members of generations X and Y. To learn more, check out Jason's blogs and see the media he's been featured in.



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The minimum initial investment for the Invest:FOCO platform is only $5,000 per account. This minimum can be met via transfer of an existing account or with new funds.
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1.00% of assets under management ($100 per $10,000 managed). Debited from your account(s).
FINANCIAL PLANNING
Strategy:FOCO financial planning services are ongoing, and include unlimited phone, email, web and in-person meeting and consultation time. Pricing is based on the unique circumstances of each client situation. Generally, there is a one-time plan development fee ranging from $500 - $2,000 and a monthly fee of $150 - $500; cancel anytime. Clients utilizing investment management services with portfolios of $500,000 or more will typically receive financial planning services for no additional fee.
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Assets Under Management (AUM)Annual fee as a % of AUM or flat-dollar
$0 - $249,999(See Invest:FOCO)
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 - $2,999,9990.50%
$3,000,000 - $3,999,999$15,000
$4,000,000 - $4,999,999$20,000
$5,000,000 or more$25,000 + $2,000 per additional $1mm
MINIMUM ACCOUNT SIZE
There is a minimum initial investment of $100,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. A client household may generally include accounts for a head of household, a significant other, dependents, and any controlled organizations or entities.

Minimums do not apply to inStream proactive financial planning as a stand-alone service.
ANNUAL FEE
Assets Under ManagementFee as a % of AUM
$100,000 - $249,9991.00%
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 or more0.50%

inStream proactive financial planning as a stand-alone service: $1,000/year or $100/month
MINIMUM ACCOUNT SIZE
There is a minimum initial investment of $100,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. A client household may generally include accounts for a head of household, a significant other, dependents, and any controlled organizations or entities.

Minimums do not apply to inStream proactive financial planning as a stand-alone service.
ANNUAL FEE
Assets Under ManagementFee as a % of AUM
$100,000 - $249,9991.00%
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 or more0.50%

inStream proactive financial planning as a stand-alone service: $1,000/year or $100/month
MINIMUM ACCOUNT SIZE
The minimum initial investment for the Invest:FOCO platform is only $5,000 per account. This minimum can be met via transfer of an existing account or with new funds. Invest:FOCO is currently available for Individual, Joint, Traditional IRA, and Roth IRA registrations.
ANNUAL FEE
0.65% of assets under management ($65 per $10,000 managed)
MINIMUM ACCOUNT SIZE
The minimum initial investment for the Invest:FOCO platform is only $5,000 per account. This minimum can be met via transfer of an existing account or with new funds.
ANNUAL FEE
0.65% of assets under management ($65 per $10,000 managed)
TAX PREPARATION
Invest:FOCO clients are eligible for a 10% discount on income tax preparation services offered through Fort Collins Tax Service, LLC. This discount applies to the base cost for return preparation as well as Schedules B & D. More details can be found here.
MINIMUM RELATIONSHIP SIZE
There are no minimums when utilizing inStream proactive financial planning as a stand-alone service.

When investment management services are desired, there is a minimum initial investment of $125,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. A client household may generally include accounts for a head of household, a significant other, dependents, and any controlled organizations or entities. inStream proactive financial planning is then included at no additional cost.
ANNUAL FEE
inStream proactive financial planning as a stand-alone service: $1,250/year or $125/month

Assets Under ManagementFee as a % of AUM
$125,000 - $249,9991.00%
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 or more0.50%
TAX PREPARATION
Strategy:FOCO clients are eligible for a 50% or 100% discount on income tax preparation services offered through Fort Collins Tax Service, LLC. This discount applies to the base cost for return preparation as well as Schedules B & D. More details can be found here.
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Monthly Economic Update
Stay in the loop with our Monthly Economic Update. It's a great way to catch up on the things effecting your financial plan in an easy to read and relatable format.

We promise to only use your name and email address for sending our Monthly Economic Update. We will not sell, rent, lease, loan, or use your name or email address for any other purpose, internally or externally. You can easily unsubscribe at any time.
MINIMUM ACCOUNT SIZE
Minimums do not apply to always-on, real-time financial planning as a stand-alone service.

For investment management services there is a minimum initial investment of $125,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. Investment management fees are generally debited from the accounts to which they apply. Financial planning services are included for Strategy:FOCO investment management clients at no additional charge.
ANNUAL FEE
Always-on, real-time financial planning as a stand-alone service:  $125/month or $1,250/year

Assets Under ManagementFee as a % of AUM
$125,000 - $249,9991.00%
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 or more0.50%
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FINANCIAL PLANNING
Financial planning services are ongoing, and include unlimited phone, email, web and in-person meeting and consultation time. Pricing is based on the unique circumstances of each client situation. Generally, there is a one-time plan development fee ranging from $500 - $2,000 and a monthly fee of $150 - $500; cancel anytime. Clients utilizing investment management services with portfolios of $500,000 or more will typically receive financial planning services for no additional fee.
INVESTMENT MANAGEMENT
Assets Under Management (AUM)Annual fee as % of AUM or flat-dollar
$0 - $249,9991.00%
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 - $2,999,9990.50%
$3,000,000 - $3,999,999$15,000
$4,000,000 - $4,999,999$20,000
$5,000,000 or more$25,000 + $2,000 per additional $1mm
ESTIMATE YOUR FEE
Your fee is determined by the complexity of your needs and situation. The primary proxy we use for complexity is your investable net worth, which is generally your total net worth, excluding your primary residence. Your investable net worth includes the value of cash, bonds, stocks, mutual funds, rental real estate, and other business or financial interests. This aligns with the holistic nature of our comprehensive services. You can use the chart below to estimate your fee based on your investable net worth. In some circumstances, your fee may be more than the minimums in the chart below.
Annual Fee Investable Net Worth (INW)
$4,000 (minimum for an individual)Up to $500,000
$6,000 (minimum for couples)Up to $1,000,000
$8,000Up to $1,500,000
$10,000Up to $2,000,000
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Need some tips to help you tackle your next critical money moment? Stay in the loop with our weekly(ish) email!

We promise to never sell, rent, lease, loan, or otherwise use your email address for any reason inconsistent with our privacy policy. You can easily unsubscribe at any time.
ESTIMATE YOUR FEE
Your fee is determined by the complexity of your needs and situation. The primary proxy we use for complexity is your investable net worth, which is generally your total net worth, excluding your primary residence. Your investable net worth includes the value of cash, bonds, stocks, mutual funds, rental real estate, and other business or financial interests. Our transparent pricing aligns with the holistic nature and value of our comprehensive services. You can use the chart below to estimate your fee based on your investable net worth. In some circumstances, your fee may be more than the minimums in the chart below.
Annual Fee Investable Net Worth (INW)
$4,000 (minimum for an individual)Up to $500,000
$6,000 (minimum for couples)Up to $1,000,000
$8,000 - $12,000$1,000,000 - $3,000,000
+ $1,000per additional $1,000,000 of INW