If Sheryl Garrett's vision could be realized, 80 percent of the U.S. population would be able to pick up the phone and call to get an appointment with an hourly, fee-only planner. In 20 years, says Garrett, she'd like to see 75 percent of all advisors (an estimated 400,000 are needed) work this way. "Middle market" Americans are dream clients in many ways, according to Garrett.

• Do you share her views?
• What are the obstacles-real and perceived?
• What are you doing to take financial planning to more people?
• And just what is financial planning's social purpose?

I think if Sheryl Garrett is so driven to serve the Middle Market she wouldn't charge $7500 for CFP's to be a part of her network.  I really fail to see the value of what she has to offer.  I view her as an entrepreneur looking to profit from the hourly fee-only planner movement.  If she really wanted to make a contribution to the Middle Market she would charge a more reasonable fee to be a member of her network.

Dana J Hornquist, CFP 

Speaking as a former Garrett Planning Network practitioner, the answer is simple. The math doesn't support this model as a full-time business.

Using Sheryl's numbers, assuming full penetration (how many firms get that far?) the average planner would have top line revenue - before any expenses - of about 90K a year, in today's dollars.  That is 75 million households at an average cost of 500 each - and a 100% renewal rate, divided by 400K of them, toiling away, one customized and labor intensive plan at a time. 

The only shot of making this model work, in my view, with all due respect to Sheryl, who I do admire very much for all she has done, is if a big national company launched a national planning model, some modest brick and mortar, staffed by CFPs who would only earn a salary of about 30 - 40K.  And the significant start up and advertising costs would borne over a long term business plan.  GPN's independent driven model is not realistic (I can bet you fairly confidently the internal retention and revenue stats bear this out) and is also, paradoxically, provides less quality to the public at large because each planner has his/her own vision, process and quirks.  So a GPNer in KS might have a completely different client experience than the planner in manhatten. 

So the plans themselves would need to be, at best "mass-customized" - think mcdonalds - because the reality is most midlle class families do not need boutique level, detailed service.  Which is why frankly I was glad to see Sheryl say that the average family seems to currently only value this at 500 bucks a plan. I happen to think the average family is right.  To sell something for more is not only only over-kill for them - it is over-engineering for the planner!

Frank Manziano

The initial fee to join the Garrett network is $7500, but the annual renewal is $1200.  I found the initial training to be valuable for someone setting up a business for the first time.  One avoids reinventing the wheel by using the operations and procedures suggested in the training.  The ongoing fee allows one to participate in several types of business coaching calls regarding marketing, practice management, compliance, and financial case reviews.  Some of these calls offer CE credits as well.  As a member you have access to many documents, presentations, and templates regarding financial planning.  Members are very generous about sharing what they know and materials that they have developed for themselves and their clients.  Having a listing on the Garrett website has resulted in several clients who otherwise may not have known about me.  Lastly, being part of the network allows you to bounce ideas off of other planners in a virtual office.  When most of us work as solo planners, it's nice to know you can ask for feedback when needed.  For me, it's money well spent.

Lisa H. Byles

I happen to be a long term member (since 2001) of Sheryl Garrett's network of hourly financial planners.  Do I share her viewpoint of serving the middle market?  You bet!

Are there obstacles?  Yes, the biggest one being that Americans do not know that hourly financial planning advice is available.

Is providing hourly financial advice a viable business?  I've been practicing this way for years and am doing just fine.  CPA's and Attorney's already know this.

Would the current mortgage crisis have been as bad as it is if more Americans had professional financial advice before making big financial decisions?  I think not.

In short, yes, I and my colleagues at Timothy Financial Counsel, Inc. in the Chicago area share many of Sheryl's views. While we are not part of the Garrret network, we do work strictly on an hourly fee-only basis.  Two of us had several years of experience in traditional wealth management firms.  The way we work  requires us to be highly technically competent in many areas, keep up-to-date work efficiently.  The resources of NAPFA really help us here.  It also requires that we refer clients who would be better served in a traditional fee-only wealth management firm to those firms.  Having a team of three, defined processes,  and a support person help.  Our clients are extremely diverse in their economic and other circumstances.  I'm not sure about the "social purpose" but it fulfills my mission to partner with clients to equip them to identify their goals and use the financial strategies and resources reach them.

Leisa Brown Aiken

I really need to respond to the comment regarding Sheryl charging $7,500 to join the network. 

I too am a Garrett Network member.

I just did the math.  Using my hourly rate, $7,500 works out to 35 - 40 hours of my time.  Would it have taken more than that to figure out how to get myself up and running.  ABSOLUTELY - this is a bargain.

In addition to all the things Lisa mentioned earlier, we get access to discounts from various service providers that I would not be able negotiate on my own.  We get tons of CPE's, sessions with business coaches, compliance experts, a marketing coach and several technology experts.

In my business situation, the jury is still out regarding my profitability in the long run.  I am entering my third year as a solo practioner and I am very pleased with the amount of business I am getting.  I have encountered plenty of clients that find great value in paying $1,500 - $2,500 for my services.

I don't mean to state the obvious - but I can see demand increasing significantly as more baby boomers get closer to retirement. 

I joined the Garrett Planning Network in 2004 and after 30 years at a major wirehouse I couldn't be happier.  $7,500 is a lot of money if you are not receiving value in return but what is it worth to have someone boost you quickly up the learning curve and provide ongoing support and valuable information (not to mention referrals)?  BMWs cost a lot more than a Volkswagon but the buyers clearly believe they are getting their money's worth.

Being a part of the Garrett network helped me establish my office, gave me a business model to follow, and connects me with other like-minded investment advisors each with their own area of expertise.  It gives me access to the GPN intranet where you can post a question and receive thoughtful and informative answers from advisors who have dealt with the same issues.  More than anything else, it is Sheryl's tireless marketing of GPN and the GPN model that educates the public and provides regular referrals through the Garrett website. The annual GPN retreat is invigorating, motivating and a great opportunity to rub elbows with other advisors with an (admittedly) unconventional but insightful perspective on how to best provide investment advice.

Personally, I think Sheryl is a visionary.  Her business model serves the middle market, the average investor, better than any of the alternatives - demonstrably better than most.  The only problem is that people are only now becoming aware of this alternative approach.  But it also took a very long time before John Bogle to convinced the public that index funds were valuable alternatives to conventional mutual funds.

Is it a tough to get started with this business model?  Absolutely!  If your goal is to get rich quick the Garrett model won't work for you - you are better off concentrating on your selling skills.  On the other hand, it is liberating to have your compensation directly correlated to the work you do and not have to turn away good people who don't meet a particular minimum net worth.  I've dealt with wealthy and even ultra-wealthy clients in my career and I find it much more rewarding - personally and financially - to work with the middle market. What other model allows you to give desperately needed advice to someone about his company-sponsored 401k and not only receive appreciation but fair compensation in return?

As far as Frank's opinion that Sheryl's model won't work - well, I would say that just means it doesn't work for Frank but it is that same business model that seems to work very well for quite a few attorneys and accountants, among other professions.  Is it any easier to get strarted in those businesses? This isn't for everyone but the conventional approach no longer worked for me and I am very grateful that I discovered GPN.