No matter how difficult the
financial planning challenge, Bill Simonet tries to keep his fee structure as simple as possible.
The managing principal at Simonet Financial Group still offers an asset-based pricing model for clients who only want
portfolio management services, but for everyone else he rolls out what he describes as the "McDonald's menu model" of retainer-fee options.
"I've built my business around retainers to support the
financial planning aspect of what I do," he said. "I've found that clients appreciate the transparency and simplicity of the model."
Like the packaged meal options at many fast food restaurants, Mr. Simonet lets clients choose from four different retainer-fee relationships that start at $1,800 a year and can go as high as $14,500, depending on what the client wants.
The entry-level Wealth Builder Fundamentals plan, for example, includes an initial plan and annual review, plus five hours' worth of advice.
The step ups from there include the $3,000-per-year Wealth Planner Standard program, the $3,500 Wealth Planner Premium program and the Wealth Planner Premier program, which starts at $5,000 per year.
With each step up comes a few more services designed for more complex client accounts, and more hourly advice and services throughout the year.
"The prospective clients can choose from a list of packaged planning services to address their goals, and we can upsize or customize each package to a client's individual needs, and the price is clearly identified," he said. "It has made the selling process so much more streamlined."
(More: Fee pressure has RIAs considering moving from AUM to retainer model)
In addition to the $3 million he manages under an asset-based fee structure, Mr. Simonet said he has 48 clients on retainer, generating between $12,000 and $15,000 worth of monthly revenue.
"I put these packages together based on various life stages, so people can decide what's important to them," he said. "The Fundamentals package is for those people who are fresh out of college or starting over after a divorce or bankruptcy, and it's more focused on things like risk management, goals, and cash-flow analysis."
From there, clients can progress through the levels for a greater emphasis on things like college savings, debt
consolidation, and retirement planning.
"My price points are determined by the clients' goals," Mr. Simonet said. "If you're a small business owner with a lot of complex financial issues, then we're starting at the Premium package. But if you're a husband and wife with young children, you can start at the Standard package."
Beyond the small asset-based part of his business, and the retainers, Mr. Simonet also has one client who prefers to work with him strictly on an hourly basis.
"The downside of hourly is that they are disincentivized from picking up the phone and calling me," he said. "On my retainer fees, I get primarily positive feedback. It is all printed out. There's not guess work. The client can read it and say 'that's me.'"
