What is a financial planning relationship and how can you as the client best show up for it?

When you hire a financial planner, what is it you’re really signing up for?

In part the answer to that question depends on what type of planner you’ve decided to hire. If they manage your assets, that will define the relationship a little differently than if you hire an advice-only planner. How they get paid may also define the terms of your relationship and how often you engage. As you decide on the type of financial services you’re looking for, I would encourage you to first consider what you’d like the relationship to look like because YOU get to decide what works best for you.  Then, you can use this information to help guide your interviewing process and select the planner that best matches your desired way of engaging. Not all planners will engage the same way, just as not all potential clients will seek the same type of engagement – and that is ok! There’s no one right way to do financial planning. Finding the planner that best fits you is what matters.

I am going to approach this article from the perspective of advice-only financial planning since that’s the type of planning I do at Find Your FI.  In all reality you could use this as a template for your relationship with any advisor. Where it differs significantly I’ll do my best to point that out.

First, a quick review of what advice-only planning is and isn’t. The premise behind advice-only planning is that you pay your financial planner directly for the advice they provide you, as agreed upon in a written financial planning agreement. And as the name suggests, there is no management or discretion of financial assets – you are paying for advice and only advice. This type of planner will not have access to your account in any way – they will not place trades or actively monitor performance. Some advice-only planners do offer ongoing service to help you implement your plan and guide you through learning how to open accounts, roll assets over to new accounts, and teach you how to rebalance your account if needed. Other advice-only planners like myself will incorporate mindset and accountability coaching into their ongoing offerings.

The services that advice-only planners offer can range from hourly to a longer-term engagement. There are some fundamental building blocks you can bring to the table in any relationship. These include the following:

  1. Clarity of purpose: What’s the question you’re trying to answer by engaging in the financial planning process
  2. Teamwork: Financial planning is a team sport. You’re the expert in your life and the planner you hire is the expert in personal finance. You’ll both need to bring important components to the playing field to get the best outcome possible.
  3. Stay engaged: Try your best to be fully present in the meetings. Limit distractions so that your attention is fully on the task at hand! This is a process designed to benefit you and pursuing that which matters most to you, so it’s worth your undivided attention in these moments! Ask questions, take notes – this process can reach its full potential when you choose to show up as best you can! 

Now, let’s review how you might best show up in each of these engagements:

Hourly: 

This one is pretty straightforward. You’re paying a planner by the hour to get a few questions answered. This arrangement is the most limited in scope with minimal if any longer-term relational considerations. However, knowing how to engage even in a limited amount of time can really help you get the most out of the interaction! 

The best use of your time, energy and attention in this are arrangement may look like this:

  1. Clarity: Be as clear with yourself as you can on the questions you have before you engage the planner. That includes getting clear on what you know and don’t know! Write your questions down; that process plus reflecting on them can help create clarity.  If you don’t feel super clear, be transparent about that! You can say something like “I have some questions on my 401(k) but I’m not exactly sure how to ask them”. Or, “I don’t fully understand my 401(k) but I’d like to learn more about it and how to best utilize it”.
  2. Teamwork: Provide the planner the information they ask for in as timely a manner as possible. They can only work with the information they have and they need your help to do it! Remember – planning is a team sport!
  3. Stay Engaged: When you show up for the meeting, be ready to take notes. You’re paying by the hour so make the most of the time you choose to pay for. 

This type of planning tends to be best for people who:

  1. Have specific questions in one or two areas. Example: How should I invest my 401k? Can I afford to buy a house?
  2. Aren’t yet in a position to afford more comprehensive planning but are ready to get started taking control of their finances
  3. Are DIYers. They can take the information provided by their planner and implement it independently.

 

One-Time Plan:

If you choose a one-time plan, the engagement will be of a limited nature. Beyond the set meeting structure established at the outset, there may not be a ton of space for additional interactions, keeping this relationship more limited in scope, though more in depth than hourly planning.

The best use of your time, energy and attention in this are arrangement may look like this:

  1. Clarity: This is true for all planning engagements! The more clear you can be with yourself on what you’re looking for from the financial planning process, the better.
  2. Teamwork: Provide the information your planner requests to the best of your ability. You can expect some type of “data gathering checklist” to help guide the collection of documents needed to build your plan. Giving them this info in a timely manner is tremendously helpful! If an item they requested doesn’t apply to you, just let them know! And if you’re having a tough time finding something, let them know that too! They’ll likely be more than happy to help you locate it. If there’s something you think is valuable for your planner to know, but you don’t see it on their checklist or it hasn’t yet come up in conversation, feel free to provide it. The more transparent you are with your planner, the better they can help you assess your situation and provide the guidance you’re hoping for. I know it can be uncomfortable to share such personal information with someone who is likely a perfect stranger. But assuming you’ve done your research about their qualifications and had a positive intro call – there’s a reason you hired them! And part of that reason likely has a lot to do with trust. 
  1. Stay Engaged: Be an active listener and take lots of notes! Most planners provide some sort of follow up note after a meeting so you’ll also have that information to reflect on after the call – but your own notes help keep you focused and engaged. And don’t forget to Ask questions! If you don’t understand something it’s ok to ask.

This type of planning tends to be best for people who:

  1. Have specific questions in MORE THAN one or two areas. Example: How should I invest my 401k and how much should I contribute each year? If I contribute more to my investments, can I afford to buy a house? How will those decisions impact my choices.
  2. Are able to afford a comprehensive plan and understand the value of learning how the various components of personal finance interact with one another across time.
  3. Are hybrid-DIYers. They want some help in learning about personal finance and can take the information provided by their planner and implement it independently.

Ongoing or longer term engagements:

Longer-term engagements provide the most space for a professional relationship to grow into a valuable and trusted partnership. These relationships are where it really makes sense to focus on how to best show up and make use of this resource! 

The best use of your time, energy and attention in this are arrangement may look like this:

  1. Clarity: Be open and honest with yourself and your planner about what you need. If you can’t be, pause and ask yourself why: you either picked a planner that isn’t the right fit for you, or you may need to do some self reflection around why it’s challenging to do so. You don’t need to share your deepest darkest secrets here, but without some mutual respect and trust you ultimately won’t walk away feeling satisfied with your plan or the experience.
  2. Teamwork: If you’re working with me that’s how we’ll practice financial planning. I want to co-create this plan with you in a way that honors your objectives. Working together with mutual respect, open lines of communication, clarity and grace will do wonders!
  3. Stay Engaged: Provide the information your planner requests in a timely manner. It helps them create the best plan for you! If you’re stuck and can’t find something – ask for help. If you need a little more time, say that too. Life happens and sometimes we need some extra time – that’s different than kicking the can down the road indefinitely though. If at a certain point you don’t provide your documents to the planner, it may be time to check in with yourself on whether or not this is the right time for you to engage in this process. 
  4. Slow Down. Here’s where I think the beauty of true financial planning starts to shine through. In an ongoing relationship you have the advantage of time and space on your side. Notice if it’s time to pause before a choice or purchase and check in with your planner. Your planner will be more familiar with your goals over time, and as such is in a unique position to coach you through various financial decisions. And remember – these decisions don’t just need to be about the stock market! In fact, most won’t be.

Done right, ongoing advice-only financial planning is like preventative medical care and not like emergency medicine. 

This type of planning tends to be best for people who:

  1. Understand that financial planning at its best is a dynamic process across the lifetime; a one-time plan can only take you so far.
  2. Are in a position to afford the ongoing fees
  3. Are hybrid-DIYers. They appreciate the educational and coaching aspects of an ongoing relationship and can also take the information provided by their planner and implement it independently.

If you’re thinking about a financial choice – or any choice that MAY have a financial component, reach out to this trusted advisor you’ve hired! That’s what they’re there for. Thinking of buying a house? A car? Maybe it’s even just some new furniture, a vacation, or any purchase that feels significant to you and your overall plan. Talk to your planner. A good planner will listen to you with deep empathy and respect. They will ask good questions. They’ll respect your autonomy. And they’ll give you their professional thoughts on whatever the thing is you brought to them. 

So before you make a financial decision that you think could significantly impact your plan … even when (and perhaps especially if) it doesn’t have anything to do with the stock market … drop your planner a note, give them a call, take a few minutes to run it past them.  I’m not suggesting you call your planner every time you buy a cup of coffee or buy new running shoes. That’s not a good use of anyone’s time! 

But choices that could hold significant mid- to long-term outcomes for your plan are worth a brief pause and check in with the person you’ve entrusted to be your sounding board and provide trusted advice. You always get the final say in what you do with your money ..  but if you’ve decided to enter into a paid agreement with a planner, use that relationship as it’s intended!

If that sounds like the type of relationship you’re looking for with a financial planner, be sure to ask them questions in the prospect call about their process. If it’s too limited in scope for you or you don’t feel comfortable sharing with them from the outset, it’s probably not a good fit. Keep looking until you find the fit that’s good enough for you!

What’s an accountability partner?

When you hire me as your financial planner, AND you choose the 12-month Find Your FI program to start, you are also hiring me to be your accountability partner. But, what’s that really mean? And why would you want an accountability partner? I think this is a term that deserves your attention, and a clear definition. It means different things to different people, and can vary across context, too.


In this article I will lay out my definition of accountability partner and how I implement it (and don’t implement it) during my 12-month financial planning process, as well as in any subsequent years we work together.  I will also touch on why people seek out this type of accountability. After reading this, I encourage you to consider what “accountability partner” means to you and if it’s something you want. If it’s closely aligned to how I integrate it into my planning process, we may be a great fit. If it’s not aligned with my process, chances are good my planning process isn’t quite what you’re looking for right now.


When expectations in a planning relationship (or any relationship for that matter) aren’t clear, a natural consequence tends to be confusion, disappointment and ultimately decreased motivation to stick with the thing you originally wanted to focus on. In a team setting you’ll see the manifestation of unclear expectations as lower moral and lower performance  and results. In a way you and I are a small team when we begin our work together! We have a shared mission (achieving your stated goals), roles to fulfill in pursuit of this mission (I’m focused on financial planning; you are the expert in your life and provide me with the necessary details to start constructing a plan) and a focus on collaboration to bring your vision to life.


The way I practice as an accountability partner is very straightforward – I hold you accountable to your stated goals. It sounds simple. Yet, it’s a journey and every journey comes with expected and unexpected challenges. If you’ve ever taken on any sort of challenge before, you’re familiar with this. Maybe it was a 5k or a marathon, improving your golf game or finding the right healthy eating plan … on paper it looks easy enough, but in practice isn’t it helpful to have some support and guidance to help you navigate the ups and downs? 


I help create the processes and structures to focus on getting your to-do list done. I do this by holding space to deeply listen, offering thoughtful yet challenging reflections to help you clarify your vision, and creating structures and feedback mechanisms to let us know how we’re doing.


Here’s what it looks like …


Listen & reflect

I do this at almost every meeting. It’s especially important in our first few meetings as we orient towards your “why”


Clarify

A natural extension of listening and reflecting, clarity comes with thought provoking questions, knowing you’re seen and heard, and having the space to focus on what it is you really want.


Identify 3 focus areas for the year

When there’s greater clarity, we can chunk that vision down into 3-focus areas for this year. We can’t do everything in one year, but we can do a lot in the way of building up a solid foundation!


Develop action items around these focus areas and organize them into a realistic timeline


Realistic goals attached to timelines – in written format – are incredibly powerful! 


Identify next smallest steps … 

Every action item has a next smallest step. We focus on the small steps to keep moving forward.


Set up a structure to check in on progress

Are you still taking the next smallest steps? What’s the next one? What needs to stay the same or change in order to keep going?


Allow space to coach you on these three processes: 

review where you are in making progress, or not; reflect on why that’s so; and prepare to shift  as necessary and continue on the journey.



Now that I’ve outlined how I intend to function as your accountability partner, it’s equally important to understand what I do not mean by “accountability partner”. The most important thing to clarify is that, while I’m a trained marriage and family therapist, I am not functioning as your therapist. I do use therapeutic techniques frequently in my work with clients, but I do not offer the space, time or licensing requirements a therapist offers. If your sense is that you need ample space and time to process thoughts and feelings holding you back from achieving your goals, you will not be fulfilled with my coaching-centric financial planning.  I designed the year-long program to offer just enough space and time to slow things down so that we could create a collaborative plan and check all the things off your list. Even with this slower pace (compared to most other financial planners) we will move at a deliberately steady yet thoughtful pace, in a forward direction, with an end-state in mind. You will find this more fulfilling if you’re at a certain level of readiness to face your finances and engage in this collaborative process.


You may notice I’ve excluded the one-time Ignite plan in this definition. With a short-term, limited engagement like a one-time plan, the process was not designed to include the role of an accountability partner. People who choose the one-time plan are usually looking for a 2nd set of eyes on a financial strategy they’ve set up for themselves and don’t desire the accountability piece.


Why would you want an accountability partner, as it’s described here? 


If you’re feeling late to FI chances are good you feel like you have a lot to catch up on. That can be overwhelming – maybe it feels like your head is spinning (or it’s stuck in the sand!!). Having an accountability partner in your corner can help alleviate some of the pressure you might be feeling to figure it all out and do it all NOW. Or you may want to finally rid yourself of the pain of avoidance. You need a process and some structure to slow things down just enough, in the right ways, and to increase momentum just enough, in the right direction, in just the right areas. It’s a balancing out of energies, focus and resources. The accountability process helps with just that – you don’t have to do it alone.


What kind of a DIYer are you? 

In the advice-only financial planning sphere we often use the term “DIYers” to describe those clients who have a certain comfort level with their finances. These people often don’t feel it’s necessary to hire a financial professional for a robust menu of services. In particular the distinguishing factor between DIYers and those that prefer a hands-off approach to their finances is the financial zone of investments.

 

DIYers are likely more comfortable opening investment accounts, depositing money, buying their chosen securities and monitoring the performance of their investments. Those with a hands-off approach prefer not to do any of this and seek out investment advisors to do it for them. Neither are right or wrong, good or bad. It’s just a preference. Knowing your preferences can go a long way in  helping you select the right financial professional to hire (if you want one at all)!.

 

On a scale from 1-10, imagine 1 being “not at all – I’d rather hire someone to manage my investments and monitor my overall plan” and 10 being “complete DIYer – I feel completely comfortable managing my own investments and creating and updating a plan as necessary”. 

 

If you’re a 1 or a 10, you’re probably not reading this blog anyway. So, let’s explore what the other numbers might mean for you. Most people fall somewhere in the gray zone of this scale. This isn’t an exact science, rather a framework to help you think through how you’d like to approach your personal finances and what type, if any, of a financial professional would be best for you.

 

Mid-Way on the scale: The 5 marks the start of the hybrid-DIYer zone

 

Let’s start with the number 5. This mid-point gives us an anchor point to understand the zones both above and below it. I see 5 as the beginning of the range 6 thru 9 that describes someone who is a hybrid-DIYer, and the end of the 2-4 zone that describes the “aspiring DIYer”. At a 5 this person feels comfortable enough to be guided through their finances and understand financial speak “just enough” to feel confident in their abilities to grow. Where they don’t feel comfortable, they are first able to acknowledge that and decide they want the advice of a financial professional who is willing to teach, guide and coach them to increase confidence and competence. 

 

As you progress from 6 thru 9 you are increasingly confident and competent in your abilities to manage your finances, investments and otherwise. Folks in this zone (5-9) who hire a financial planner often fit best with an advice-only planner. But so do the people in the zone of 4-5 … and often they are the silent middle who get overlooked! You don’t need a ton of assets, financial know-how or time on your side to deserve quality financial advice. You just need the desire to learn and move forward.

 

Now that we have a mid-point anchor, let’s step back to the beginning of the scale let’s explore the range of 2-4 on our scale of 1-10.

 

If you fall in the range of 2 – 4 you may be in the zone of “Aspiring Hybrid-DIYer” … you are learning more about personal finance so that you can become a hybrid DIYer. 

 

These phrases/questions might fit for you:

 

  • I don’t yet have a lot of assets, and I feel a little (or more than a little) embarrassed about my finances – is there anyone who will start from this point?
  • I’m not sure where to start with personal finance, but I’m curious to learn more  
  • I could probably use some guidance, but I wouldn’t know who to ask for help.
  • How would I begin to think about an investment philosophy?
  • I’ve asked for help from financial advisors who charge based on assets under management (AUM) but I don’t reach their minimums so I couldn’t gain access to the advice I know I need.
  • I’ve read enough and listened to enough podcasts to know that: 
    • Given enough guidance and coaching, I could manage finances on my own. I just need a starting point!
    • I don’t want to go this alone – someone please help guide and teach me!
    • There’s so much to learn – who can show me what to focus on?
    • I don’t have the time to learn this on my own – I want a guide.

 

To be successful in working with a financial planner in this zone you will be willing and able to …

 

  • Dedicate the time necessary to learn the basics of personal finance
  • Pay for the services that will help you build the muscles of discipline and know-how to reach our goals
  • Move outside your comfort zone, even if just a little bit, to learn something new about money and yourself!
  • Be patient with yourself (and your family) as you try some new things

 

Finally, let’s explore the range of 6-9 on our scale of 1-10.

 

If you fall in the range of 6-9 you may be fully in the zone of “Hybrid DIYer” … of tightening up your personal finance philosophy by gaining the opinion of an advice-only financial planner on your plan. You’re open to suggestions and would feel better knowing you’ve had an objective opinion.

 

These phrases might fit for you:

 

  • I know quite a bit about my finances, but I would still really appreciate the support, guidance and coaching of an advice-only  planner
  • I’ve spent quite a bit of time learning about personal finance and feel pretty confident in my abilities to select the basic ETFs or Mutual Funds that comprise my portfolio.
  • I don’t invest in anything complicated. I understand that investing is for the long-term and my philosophy is to buy and hold in index funds
  • I’m curious to know what alternative courses of action  a financial professional might advise for me – am I missing anything?
  • I am confident in my abilities and I want a dedicated coach and thinking partner along my financial journey

 

To be successful in working with a financial planner in this zone you will be willing and able to …

 

  • Dedicate the time necessary to monitoring your financial plan, to include your investment accounts
  • Pay someone to review the hard work you’ve already done … and be coachable and open to suggestions
  • Stay the course when things get off kilter … if the market tanks, you aren’t going to sell everything and sit on the sidelines. 
  • Be open and patient with yourself (and also collaborative with your family if applicable) as you take responsibility for the financial path you’re designing



If you find yourself falling somewhere on the hybrid-DIYer scale and you’re ready to engage in advice-only financial planning, use the link on my website to schedule your initial consultation!

What is Advice-Only Financial Planning?

The purpose of this article is to give you a very basic primer on what advice-only financial planning is and how it differs, specifically in its billing and handling of investments, from other types of planning and advising. Stay tuned this summer for more in depth articles on many of the topics you’ll read about in this intro!

 

First, a quick distinction between financial planning and investment advising. Financial planning takes a broad look at the key elements of your personal financial landscape and integrates this information to help you make informed decisions about how to best use your resources. For those of us that are CFP® professionals we are encouraged to look at the following areas, assuming the client agrees to explore each area:

 

Goals

Cash Flow

Retirement

Investments

Education

Taxes

Estate Planning

Insurance

 

In another article I will address each of these areas and the typical 7-step process a CFP® professional will take you through (and I’ll tell you more about my additional category which is mindset).

 

Investment advising typically focuses just on your investments. And while investments are critical to building your wealth, a focus exclusively on their performance without review of the categories listed above, provides you with an incomplete picture of your financial landscape. 

 

Start to know the difference between who wants  to manage your investments and who wants to help you navigate the broader financial landscape known as financial planning. They are not the same thing.

 

For now I want to focus on a very specific type of financial planning that has emerged in recent years: advice-only planning. Advice-only financial planning arose out of a demand for access to financial advice for those who did not meet the typical minimum assets needed to work with many advisory firms. This type of fee arrangement is known as assets under management (AUM). The way an AUM advisor is compensated is based on a percentage of the assets held under their management and is typically about 1%. So if you have $500,000 in investable assets managed by an AUM firm (a common minimum needed to engage in planning), you will pay them $5,000 a year to manage those assets (sometimes there’s not even a financial plan associated with this cost – that fee is for managing your investments).

 

Often the advisors who charge for services under this model have a minimum amount of assets they require clients to have before they’ll work with them. Whether or not this is the “right” way to charge for financial advice is beyond the scope of this article, but it is important to have a basic understanding of it in order to understand the evolution of advice-only planning.

 

There are many people who do not yet have assets accumulated at a level that would allow them to work with an AUM advisor, but would appreciate the guidance of a financial professional in learning how to create a healthy financial landscape and start to build wealth. Additionally, in the accumulation years, many people’s investable assets are held in workplace retirement accounts like a 401(k) and cannot be rolled over into an AUM advisors control, thus continuing the reasons why many are disqualified from working with AUM advisors and gaining access to the financial advice they could benefit from.

 

Then there is a growing pool of folks who see themselves as DIYers. Many come from the FI or FIRE (Financial Independence Retire Early) community. They are comfortable opening investment accounts at the custodian of their choice and have learned how to buy and sell stocks and bonds to fit their investment philosophy. However, since investments make up just a tiny fraction of a person’s financial landscape, these DIYers also appreciate the guidance of a financial planner to look at their overall plan, to include investment allocation. 

 

Then there are the hybrid-DIYers who are willing to do some of the work themselves when it comes to investments, but they don’t want to learn how to do it all alone. I find the hybrid-DIYers delightful to work with! They tend to be open, curious and determined to find their FI!

 

Enter an advice-only financial planner … like me!

 

When you hire an advice-only financial planner you are paying a fee for their advice on your financial landscape. There is no incentive for an advice-only planner to encourage you to roll assets into their management because by definition and regulations we do not have custody or discretion over any client funds (I can’t see your accounts on your custodian’s platform nor can I trade anything within your accounts – I have zero access). Therefore they are not compensated via AUM fees. They do not sell any products or receive any commissions (this also makes them a fee-only advisor). Their job is to give you their professional opinion on where you currently stand financially and what changes you may want to consider, if any! It doesn’t matter what your net worth is or how much you have in investable assets – advice-only planners charge a fee for their service. Sometimes that will be hourly and sometimes it will be a flat fee. So if you can afford their fees, you can get financial advice!

 

Who is the best fit for an advice-only planner? 

 

Someone who appreciates collaboration and engagement and is willing to do the legwork of monitoring their investments. If your preference is to be as hands-off as possible with your investments and overall financial plan, an advice-only planner is not the right fit for you. 

 

People who believe in low-cost simple investing are also often good candidates for advice-only planning. While not all advice-only planners will subscribe to a basic 3-fund portfolio (think Vanguard and the Bogleheads community here), many do. I am one of them. If you are looking for an advisor who will help you pick individual stocks or complicated investments, this isn’t the right place for you. 

 

Most clients of advice-only planning value simplicity – they are looking to be true long-term investors, not short-term traders. Therefore their investment portfolio does not need to be tinkered with on a routine basis. They add money to their accounts, invest in their basic funds, and rebalance once, maybe twice, a year. Perhaps most importantly, they recognize that their investments are not the entirety of their financial landscape and want the guidance of a professional to navigate the remaining areas of financial wellness to ensure they’re on track to reach their goals.

 

Advice-only planners know that a product is not a plan. Your insurance policy, your investment account, an annuity you purchased … none of these products in and of themselves constitute a financial plan. They are stand-alone products that may or may not add value to where you’re headed in life. Advice-only planners take a step back and look at all the areas that touch your financial landscape. They are not just investment advisors and they don’t believe that a focus on investments to the exclusion of all the other important areas will get you where you want to go.

 

Stay tuned for more articles on this area of planning. I’m constantly surprised by how many people are not familiar with this model of planning – to include those in the industry! This summer I will focus my writing on educating you about the various methods of planning and how advisors are compensated for their work. That way you can choose what works best for you!