Why I Chose the Income + Net Worth Retainer Model

Since deciding to start a career in financial planning 14 years ago, I’ve been looking for a model that made it possible to serve people whose financial situation looked more like mine. But I struggled to find a satisfactory answer to these questions: How can I serve people like me? How can I make it affordable for them? And how can I make it profitable for me?

I needed to find a way to charge for my services that was fair, affordable to people still in their early career, and that would still support my family without requiring me to sign on hundreds of clients just to pay the bills.

Then a few years ago I had a great conversation with Jude Boudreaux, who founded Upperline Financial Planning and has recently merged with The Planning Center. I’d heard about Jude’s fee structure and wanted to learn more. When we sat down together at FPA Retreat, Jude started to share the Why of his fee model. And I fell in love with it.

While I don’t recall the specifics of our conversation, it laid the foundation for my current fee structure. The four main reasons I chose the Income + Net Worth Retainer Model are:


When an advisor charges you based on your investments, you focus on your investments. When you’re charged based on net worth, you focus on your net worth. Net worth is a much more accurate and well-rounded figure to focus on since it includes your debt. (I haven’t yet found a model that makes it possible to charge based on setting and meeting goals, but I would love for that to be more of the focus!)


Financial planners traditionally have had a hard time figuring out how to profitably serve clients with no assets, partly because they are focused on charging based on assets. So by including income in the calculation, I can feed my family while helping young families that have income, but no assets, and by helping retirees who have assets, but no income.


When advisors charge based on your investment balance at the end of a quarter, you can’t know the amount of your fee until a few weeks after the end of the quarter. With my fee structure, you know what your fee is up front, for three years at a time, so you can budget accordingly. And before it adjusts, you sign a fee agreement so you’re aware of the new fee amount.


Many fee-only financial planners charge 1% of assets under management (AUM), with either a minimum on invested assets or on the fee. Then as you gain more investments, they lower the fee. Instead, our fee is built to be affordable at all points in a client’s life and profitable for me as well. For example, a client who is early in their career, with a combined dual income of $150,000 and a net worth of $50,000 will pay $135 per month. Under the AUM fee structure, that same client would traditionally be charged a minimum fee between $5,000-$10,000, if they were accepted as a client in the first place.

As you can see, this approach allows me to put the client first. The model does come with some drawbacks, which are that it is more difficult to calculate than a straight investment balance; people aren’t as familiar with it; and it brings the fees out into the open. To tackle these problems, we will only calculate the fee every three years; take a lot of time to educate prospects before they become clients so they know what they are paying and why, and revel in the fact that our clients know EXACTLY what they will be paying us and when. Additionally clients are billed monthly and they will be sent a reminder before each automatic payment, instead of being sent an invoice after the fact.

If you’d like to know more, schedule a call with me and I’ll be happy to answer any questions you have!