Matthew Jarvis, CFP®

Can someone please show me a time log of 16 hour AVERAGE to make a financial plan for a prospect?!?

If we assume the average financial planning client is $2m AUM, a home and $250k of income, what can possibly take 16 hours?

Either advisors are guessing wrong about their time (a major issue with all surveys) or they are wildly inefficient.

Until I see time logs, my bet is the latter.

1 month ago | [YT] | 7

Matthew Jarvis, CFP®

Questions for the Priests of the High Order of Fee-Only Advisors:

If you don't take the $50k commission on an insurance product because commissions are evil, but you refer it out to someone else who takes the $50k commission, aren't you still guilty of making a client pay a commission?

What's that? You refer them out to people who also don't take the commission? So those people are working for free, or worse yet, charging a fee and letting the insurance company keep the commission?

What's that? You use non-commission insurance products? Ok, and you've compared the pricing against traditional policies to see that the insurance company actually discounted the policy by the commission amount AND had enough economy of scale to make the product less expensive?

Not saying this can't happen, but it feels like a lot of creative mental accounting to not soil the holy robes of the fee-only priests...

1 month ago | [YT] | 3

Matthew Jarvis, CFP®

Why is it so hard to understand that TIME does NOT matter for Roth conversions?!?

I constantly see articles, including by financial advisors, including in the FPA journal, claiming that Roth conversions only make sense if the client has a long enough time horizon.

Setting aside the added benefit of eliminating RMDs and the 5-year rules, let's make this math so simple that even a Kindergartner (or CFP) can understand:

A Farmer has 4 bags of seed, which are enough to plant 4 fields. Yeah!

The IRS comes demanding the farmer pay 1 bag of seed today, or 1 field of crops when he harvests (25%). Boo!

If the Farmer pays in seed today, he can only plant three fields, but at harvest, he owes the IRS nothing and keeps all three fields for himself (Roth).

If the Farmer waits to pay, he will owe the IRS one field of crops, leaving him three fields for himself (IRA).

In either option, the Farmer is left with three fields of crops.

If we put this to numbers, if a client had $100k of IRA money and a 25% marginal rate now and in the future, no matter how much time went by, or how much the accounts grew, both the after tax balance of an IRA and a Roth would be identical.

Yes RMD deferral, and ability to control future taxable income, and the widow's tax, and flexibility and IRMA will all tip the scales towards Roth, but TIME and IRR, do NOT matter!

What DOES matter? The marginal tax rate in the year of conversion and the marginal tax rate in the year of distribution.

This ain't rocket science.

1 month ago | [YT] | 6

Matthew Jarvis, CFP®

What's wrong with this picture from a recent mastermind? I count four things.

#1) Bad Math: $100m x 1% = $1m and NOT $600k
#2) Discounts/Exceptions: If AUM is right, Gross (and net) are short by $400k, likely due to discounts/exceptions
#3) Even Stated Fee is Low: Any advisor delivering massive value, can charge 1.5% (or more).

If this advisor just charged her stated fee of 1%, she'd increase her Gross and NET by $400,000, annually. Assuming she stays in business another 10-years, that's $4,000,000 (plus market growth) of PURE PROFIT.

Even if the advisor wanted to invest $100k annually for a white glove client concierge before raising her fee to 1.5%, it would be $800,000 of new profits, nearly tripling her current income.

Will these changes be easy? Nope. If they were she'd already done it.
Are these changes complicated? Nope. Just need the systems and accountability to make it happen.

1 month ago | [YT] | 4

Matthew Jarvis, CFP®

“How did that work in your practice” is the first question every advisor must ask before taking advice.

1 month ago | [YT] | 7

Matthew Jarvis, CFP®

Only work with clients who are paying you enough to be worth the risk.

1 month ago | [YT] | 5

Matthew Jarvis, CFP®

Tell me you’re a N.A.R.C. (Never Advised a Real Client) without saying it:

-You think numbers are the most important part of the decision
-You recommend scripts that will clearly never work
-You make blanket statements like “choose a niche” or “prospect more”
-You think referrals come from asking
-You talk about the “great wealth transfer”
-You parrot corporate catch phrases as if they apply to small businesses such as “career progression”
-You believe any survey data
-You act smarter than us lowly financial advisors, despite not being able to do the job
-You have more letters after your name than clients

What else?

2 months ago | [YT] | 3

Matthew Jarvis, CFP®

I've not charged a planning fee in 15-years and I have no plans to start charging. Why?

-Most advisors I meet who charge planning fees (with the notable exceptions of Thomas Kopelman, Micah Shilanski and a few others), are running on thin margins with low profit levels (e.g. sub 7-figures of revenue). In other words, not a model I want to duplicate.

-Most planning fees are not high enough to be worth my time and have little to no enterprise value, at least when compared to AUM fees.

-Planning fee models typically create short term engagements, where the planning ends long before implementation is complete (is implementation ever over?).

-Planning fees create a friction point to becoming an AUM client. And since it's not enough money, unless you have too many unqualified prospects, charging a planning fee is unnecessary friction.

-Not charging a fee is a selling point in my prospect process: "before you pay us a dollar in fees, or trust us with a penny of your nest egg, I'm going to show you exactly how my team can help. THEN you can decide if you want to hire us.

If you charge planning fees, or don't, what's your logic and more importantly, how has it played out in real life?

2 months ago | [YT] | 2

Matthew Jarvis, CFP®

Prove me wrong: The single biggest productivity killer unique to financial advisors is Financial Planning Software (eg Money Guide Pro, e-money, etc).

Sucking up hours of time to generate dozens or even hundreds of pages of noise, none of which tells the client anything useful, or more importantly, what step to take next.

But seriously, what action has a client ever taken based on a 100 page report that couldn’t be done in just minutes with a calculator?

How much to save for retirement? How much to safely spend? When to start Social Security? This is all basic math, not elaborate rocket science.

Other than demos, I haven’t used planning software in over a decade and not a single client or prospect has ever complained, in fact most, as one UHNW client described it, feel that “you’re the only planner I actually understood.”

What am I missing?

2 months ago | [YT] | 4

Matthew Jarvis, CFP®

I finally realized the hardest part about becoming a successful financial advisor, and it explains why the ones who make it get paid so well and why so many advisors stall-out, or completely wash out.


Drumroll please:

The hardest part of becoming a successful financial advisor is that for hundreds or even thousands of reps (aka hearing 'no'), which can take years, it feels like you are making zero progress.


It's NOT 'take two steps forward and one step back' but rather, 'do this 1,000 times with no measurable success and on the 1,001 attempt you will 'suddenly' arrive at the top of the profession.



This is crazy to think of because if you do the 1,000 attempts, you are all but guaranteed success, but because the first 999 attempts show no results, almost nobody can keep after it.


Also explains why people who get a paycheck every week (or every other week) make so much less money.

7 months ago | [YT] | 3