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Who Are My Clients?


Every fall I go in a treestand for a few days.  I like it as I get away from the phone and have a chance to think.  My mind always wanders to my business as I think about the past year and start planning for the upcoming one.  Something I was thinking about this year was what my client base looks like.  The timing was perfect as I have been getting the question lately of – “Who do you work with?”  Well, it can be broken into three primary categories, from youngest to oldest.

  • “Life Just Got Real” Clients 
    • These are mostly new doctors and dentists who are now done with school, residencies, fellowships and more.  They are now fully in practice and realize their wealth management lives are rather complex.  First, comes the realization the odds are good they will pay more in taxes their first year in practice than they made in total during residency.  Next, comes all the decisions that need to be made around student loans, work benefits, 401k plans, Backdoor Roths, insurance, estate planning, college savings for kids, and more.  These are the clients who have little assets to manage so an AUM-based advisor isn’t interested. They also don’t want to deal with the high-pressure insurance salesperson trying to get them into some expensive, high-commission product.Plus, their schedules are often hectic and having a planner who operates virtually is a perfect fit.  Here are mostly Millennials. 
  • “It’s All in My 401k and Is Getting Complex”
    • In this category are primarily my fellow Gen Xer’s.  They are the clients who have been diligently saving in their 401ks and stock incentive plans for the past 20+ years.  There may have been quite a bit of work done years before on their estate plan, insurance, college savings and more.  However, there is often a conversation along the lines of “Yeah, we haven’t touched any of those things in years and years.”  When it comes to the 401k balances, well, they have become sizeable.  However, the closest they have to an advisor is the 401k rep they get to spend 15 minutes with once a year at work, and odds are the rep is different every year or two.Unfortunately, these clients too are ignored by the AUM-based advisors as the bulk of their assets are sitting in 401k plans so there is nothing for the AUM advisor to charge on.  Plus, they feel the same about the insurance pitches.
  • “Gearing up to Retire Soon…Help!”
    • Here are the Boomers nearing retirement in the next few years.  This is when the conversations of turning the 401k balances into a retirement income stream become reality.  And I am NOT referring to annuity sales.  As I have mentioned before, taxes don’t go away in retirement and are often a bigger issue than during the accumulation years, especially as RMDs come into play.  Plus, there are quite a bit of conversations on any new legal work they may need done and verifying things like dropping their disability insurance once they stop working (you would be surprised how many people continue to pay for this in retirement because their AUM advisor never asked about it or their insurance-based advisor still gets paid on it). It’s also here we start talking about everything from a retirement bucket strategy to charitable giving.  These clients are fawned over by AUM advisors because now there is money to manage and charge on.  My clients like me because I do so much more than just manage money and there is never a question of what they are paying.

When I launched I mistakenly assumed my clients would be mostly in the “ready to retire” category.It was a pleasant surprise to find out I was wrong as I have so many wonderful clients and they are evenly distributed between the three categories.  I honestly don’t know of another planner who has this sort of balance with his client base.  And I consider myself very fortunate I am able to work with all three of these types of clients.  Oh, and in a future article I will explain how I determine whether I will take on a client.