March 5, 2019 was a wonderful day. I walked into my boss’s office that morning and said farewell as I decided to be an early detractor in a bank merger that did not interest me. I viewed it as a grand opportunity to run a practice the way I long dreamed of.

I left the bank and headed to Maryville to start a financial planning business in a very old brick building that still had a sign out front that read “Meredith Heating & Air Conditioning”.

Immediately I started reaching out to my contacts and telling them what I was doing, and people started coming in to move their accounts over in the following weeks. I wasn’t certain if people simply trusted me or were hopeful that I would load up the air conditioners with freon.

What I was doing took a lot of explaining to potential clients. When you leave a 150-year-old bank with over 400+ employees to becoming a one-man startup wealth management operation located in an old HVAC shop, people ask a lot of questions, rightfully so.

Many were intrigued by the flat fee advisory model. Some seemed skeptical at first. It was not my intention to be the lowest cost advisor around. My plan was to charge a fair professional rate for the time and resources involved, which was completely independent of how much money a client had. This did result in saving a lot of people a lot of money. But when you tell a client who was paying $30,000 a year for your services at your former employer that their new fee is $6,000, they do wonder if they’re missing something.

Something is indeed missing, and that something is a lot of unnecessary overhead.

The Idea Started Early

When I was 15, I started working at a produce stand in Collinsville for some summer cash and proceeded to do seasonal work there for the next 4 years.

From spending so much time there, I knew it could be a great business but that it probably wasn’t. There was way too much help for the amount of business that was being done and too much inventory going to waste. If the unnecessary overhead could be eliminated, I suspected the business could be improved significantly. However, it wasn’t my desire to give unsolicited business advice.

Fast forward to spending nearly 8 years in wealth management at a community bank, I saw the same issue of unnecessary overhead. There were a lot of expenses that, in my opinion, cost the clients significantly yet did not benefit them at all.

There is a common message in the industry that a “team of professionals” managing your money is quite beneficial to you, but it is a façade (How many CFPs does it take to screw in a light bulb….). The 2017 Cleveland Browns showed better displays of teamwork than you’d see at most wealth management firms.

From doing some fairly simple math, I determined that by starting my own business I could work with a much smaller client base, charge much lower advisory fees, provide better service, and still make a good living.

That part has gone exactly as planned. Today the firm serves around 190 households in 12 different states and advises on nearly $300 million in client assets.

The Lowlights

Not everything went as planned. There were many speed bumps along the way, and I think it’s important to touch on those moments as well:

• Just hours after starting the business I received a cease-and-desist order (the first of two) from an attorney representing my former employer (speaking of unnecessary expenses…). For a brief week or two (which felt like an eternity) I was in a panic. I had good people in my corner that made that matter go away quickly without any monetary harm to myself.
• The first ~70 clients were onboarded solely with paper documents. My rough estimate is that each client household was roughly 50 pages of paper, meaning we had about 3,500 pieces of paper completed. I came in every Sunday for a while just to scan documents for hours and hours and hours.
• 10 weeks after starting the business our daughter nearly died at birth and had an Apgar score of 1. By the grace of God she made it home 10 days later and continues to be a walking miracle. I remember sending Docusign forms to clients from my laptop in the NICU who were completely unaware of the entire situation.
• 7 months after starting the business TD Ameritrade announced they were being acquired by Charles Schwab, thus all the clients that I recently switched over to TD would be switching to Schwab at some point (finally completed in 2023) in the near future. I had nightmares that I'd have to repaper every client, but thank goodness that was not necessary.
• COVID flipped the world upside down in 2020. Financial markets were erratic and we saw 3 of the largest 13 daily percentage declines in the history of the Dow Jones Index. Around the same time we saw 3 of the largest daily percentage GAINS in history (Don’t time the market). The US stock market dropped over 30% in 34 days, and small cap value stocks dropped roughly 40%. I was on the phone day and night with clients.
• My first attempt at hiring another advisor did not work as I had hoped and only lasted 6 months.
• We experienced the highest inflation levels in over 40 years as a result of the fiscal stimulus from COVID relief, coupled with a disrupted supply chain and 0% interest rates. When you have a flat advisory fee and inflation erodes the value of the dollar nearly 20% in a 3-year period you do start to question your own wisdom.

I am confident there will be many more lowlights going forward, but they will be outpaced by the highlights.

Today

As you read this, I am at Disney World. Don’t worry, I am not working. I scheduled this email to be sent out while I was away.

While I am no longer the 22-year-old baby faced financial advisor I was 13 years ago (I know a number of you remember that), I am even more enthusiastic about this work today than I was back then. It is my strong belief that the work done here can help a lot of people.

The industry is trending in the right direction, albeit at glacier speed. Consumers are desiring more transparency on what they’re paying and what they’re getting. This has been good for MWP so far, and I suspect it will continue to be. From the early planning stages of this business, I tried to design an advisory model as to what I would want if I were a client:

• No commissions or asset-based fees
• No conflicts of interest
• No revenue sharing (For fun reading check out Edward Jones 2023 Revenue sharing disclosure)
• Responsiveness
• Proactive planning
• Stability
• An approach rooted in evidence, not opinions
• A maximum number of clients per advisor

Cheers!

‍

Disclosures: This article is for informational purposes only and should not be considered a recommendation. Information contained in this article is obtained from third party resources that Meredith Wealth Planning deems to be reliable. Consult with a financial advisor before implementing any strategies.