How Do You Know Which Type Of Financial Planner To Look For with Daniel Wrenne and Jeff Wenger

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Welcome to the “Finance for Physicians” podcast, join Daniel Wrenne and Jeff Wenger, as they dive into a multitude of financial topics designed to empower physicians on their financial journey.

In this episode, Daniel and Jeff tackle pressing questions and explore a wide range of financial themes that resonate with physicians. They discuss everything from optimizing cash flow and determining affordable homeownership to advising on the ideal percentages of income to save and invest for your unique financial goals.

Whether you’re a medical student, resident, attending physician, or an established practitioner, this podcast offers invaluable insights. With a particular focus on physician-specific financial planning, the hosts share their expertise on investment management, crafting financial plans, and achieving financial success while aligning your decisions with your values.

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Full Episode Transcript:

If you’ve been listening to the show, you know I’ve been diving into the direct care business model for physicians as a way to rebuild our American healthcare system and end the burnout epidemic. If you’re working with us as a planning client, we can help you get clarity on what it takes to get there, keep you accountable, and even give you a bunch of examples of how well this has worked for others.

But I know many of you will need more than that. You may need support doing things you’ve never had to do before, like business planning, or marketing, or even IT. And I’m sure you could probably use a partner. That’s what my friends at Freedom HealthWorks can do for you. They are the complete, direct, primary care solution for physicians that want to buck the system.

They can help you set up and run your own practice. With easy financing and support you with the business strategy, hiring guidance, technology setup, client acquisition, and even your website. If you’re curious to learn more about them, hit pause, grab your phone right now, and save this number. 317 804 1203

That’s 317 804 1203 We’ve also had their CEO on our May 2nd episode, one of their current clients on our June 13th episode, and a client of ours who just started working with them on our show that aired on July 18th. Make sure and give those shows a listen if you’re curious, but if you want to get some questions answered directly, give them a call.

They’re a great team. And once again, find out more at 317… 804 1203 and make sure to tell them I sent you.

Daniel: What’s up guys I am back for another Q& A show with my good buddy Jeff. Jeff, say hello. Hello everybody. we’re gonna pull a question from the Facebook group.

the Physician Finance Facebook group. And, just to kind of talk through that. And, if you guys have questions on your end. Please post them in the Facebook group and we’ll cover them in future episodes. So, the question, that was posed in the group. So this was about actually very close to home here.

We have a little bit, a little bit of bias on this question,so the question is, have you ever used financial planning services not to manage investments, but to help you set up a cashflow and advise on how much of a home you can afford, what percentage of income should be saved, invested, for your goals.

and then do you have someone you would recommend and how much would it cost? So that is, I say, it’s a biased question. That’s what Jeff and I do, by day. So of course we’re going to say, you know, we’re going to say, get, there’s plenty of them, but, you know, we’ll talk about the pros and cons of that because there is cases where, It might not make sense or, you know, different directions to go. So, Jeff, you want to try and tackle this one first? Sure.

Jeff: So I think we were, as we looked at the question, you know, there are lots of different answers that come up too. And, like Daniel said, we are in this business. So we certainly have a little bit of bias DIY.

Daniel: Yeah. Hardcore.

Jeff: and just through personal experience with my own family came to realize there’s, there can be value for others that are on this journey. Um, so that’s real quick me and how I even happened to get here because I didn’t like financial planners. So there you go. so real quick, I think what matters here is having a good idea of what you are looking for help with.

I think some of the, the answers that we saw there actually had to do a lot more with investment management. So, I mean, I’m going to go to, we love, I love Vanguard personally and, and the investment options that they have there. And, so like if you want investment help or even just. Going there for like, Hey, I have a goal and I want to be on track to fund it.

that’s not a bad

Daniel: option. Yeah. Jeff’s referring to, there was one answer and it was Vanguard. So we wanted to kind of give a more full scope answer. And then Vanguard can be a great option. it’s, I mean, we use Vanguard funds and Vanguard funds are fantastic, but, Vanguard also has a. Investment management service.

they even have a financial planning service. But

Jeff: so the initial question though, what are the areas that the questioner was looking

Daniel: for? So help with not to manage investments, but help you set up correct cashflow. Advise on how much of a home you can afford. What percentage of income should be invested versus saved based on your financial goals.

So I think. That’s not a Vanguard sort of need there, I don’t think. I mean, like, it could be, but Vanguard is very much a generalist, like, uh, low touch, very general and more investment focused sort of setup if you’re using them for financial planning. I don’t think, like, a Betterment or something like that is a good solution because they’re very investment focused.

I think most financial planners… Or financial advisors or whatever they call themselves are not great fit because they’re the industry entire industry is very focused on investments So that’s probably what the person asking the question has already realized because the fact that they brought up, you know Not to just manage investments Makes me think that they’ve kind of felt that but that’s, I mean, really we’re a fantastic, solution for that.

like if you look at our time, with families, what do you think, Jeff? We’re probably like 10 percent or less on investments. Like the majority of our, the bulk of our work is more in like family and money and balancing and all that stuff. Right.

Jeff: Yeah. I would say I’d almost wear that as a badge, 10 percent or so of investment time, maybe less.

and these questions that they’re asking for, looking at my cash flow, looking at how much home I can afford, start to get to someone that is going to lead with what are your values and how do we align

Daniel: everything around that. Yeah, because those decisions heavy depend on values and what’s most important in goals, right?

Jeff: Because it’s, well, you can always go to general rules of thumb on cashflow. Like I need 25 percent here, 25 percent there, 50 percent here.

Daniel: but to

Jeff: understand your personal values, that’s going to Dictate then how do we use that current cashflow to align it with values and actually achieve the goals while balancing some of these competing priorities?

Because you’re going to find with a lot of investment management platforms is, all right, I want to retire at age 65 with this much money. And it can pretty, it can spit out a number and give you an amount, but then balancing those questions of, all right, how is this going to impact something else?

Like, am I going to be able to afford? You know, a one and a half million dollar home. If I’m also saving this, am I going to be house poor versus not,

Daniel: to do that? The other thing I’ll throw out is, seems like a lot of people that have not ever worked with advisors or planners are sometimes thinking like, I just need a plan.

And so that’s like, it’s like, I just need to figure out how to find someone that can help me come up with a plan. And then I’ll, got it from there. and so, If that’s truly the desire, You can look for financial planning services or companies that, just do, plans only or find like a hourly planner to kind of do a, a plan for you.

So I’ll throw out like a network, like Garrett planning network is like an hourly planning. network, a network of hourly planners, and they’ll do, you know, plans for hourly rates, and then they give you the plan and then you’re kind of off to the races. what I have found maybe were skewed towards the people we work with, but like our experience working with people is that they get that plan and the to do list.

And then they’re like, Oh, and they have a hard time executing on it. When you get into like life and day to day. And so a different style of planning that’s more like ongoing, doing life and money together. It’s kind of like concierge medicine style planning. And so that’s, that’s kind of what we do is more of like the concierge medicine style of planning where we’re going to help with like the executing aspect of planning.

And so sometimes it’s hard to know what that’s actually like. you know, it’s hard to explain. It’s hard. It’s hard to recognize it until you’ve done your first plan. so I get that. Like, it’s hard to know, but if you do know which direction you fall in that, that can kind of help with the decision making as well, but you don’t have to get married to a planner.

I think sometimes that’s, um, I do that with my doctor. I’m like, I don’t want to change ever again. I want to get one and be done. you know, can always work with somebody for a while and then graduate or, you know, change transition and whatnot. That’s, that’s not a big deal.


Jeff: The different types of. help that you could, work with, then would you label that? maybe so you’ve got the one that we didn’t want to look at at the beginning. It wasn’t even part of the question was basically investment management help. And you could look to that. Maybe you look at some of the robo advisors, bad Vanguard, personal investment services, that type of thing.

And yep, usually you’re looking at some kind of a percentage of your investments

Daniel: that go there.

Jeff: In our, our view, you’re going to get kind of financial planning light there, where it’s very, just

Daniel: give me a number to save, right. And it’s like, that’s because they’re focused on the investments. That’s how they get paid.

That’s what they’re focused on. Number two,

Jeff: there was kind of the one time type financial plan where let’s look at stuff together. It’s a project based, maybe it’s hourly. have you seen anything as far as pricing? So I didn’t, I think that the price was one of the parts of the question as well.

Daniel: Yeah. Thanks for reminding me. Yeah. that’s very wide range, but I would say the pricing for like a one time plan. if you’re talking. Overall, you get, it’s a big range, probably like, you know, a couple thousand to like up to 10, 000 if you start to narrow it down to like physician specific, planners, I would say probably more like three to 6, 000 for a one time plan.

That’s, some of the firms will do a little bit of a discounted rate for in training, but I would say a few thousand, maybe, maybe like a 4, 000 average. Plan or fee for the plan. If you’re in practice, that’s kind of what I would ballpark. I don’t know Jeff You think that’s a good ballpark for that?

Jeff: That was the range I was gonna give somewhere in that really five to ten maybe three on the lower really low end there for a a plan that’s gonna look at a Lot of areas of life and really dive deep and not just say alright You want to fund a hundred thousand dollars for college save this much a month?

but get into the values

Daniel: anyway. Yeah. that’s right. That’s a good, qualifier. And then, okay. Were you going to go with the third one? Ongoing. Yeah. So that’s the other category, ongoing, pricing for that. I think most of these, uh, the firms doing that, including us are doing.

Like a monthly fee. And so I would say we’re talking annual, cause we’ve already been talking to annual, let’s stick with annual pricing, they usually charge monthly, but like if we look in annual terms, I think 5, 000 a year is a good average for that with a lot of them charge like an upfront fee as well to get started, or they lock you into the contract.

For example, for us, we charge an upfront fee, but don’t lock you into the contract. So you can leave at any time. so, you know, depending on what that is, you know, they often will charge an upfront fee and I’d say the average is about 5, 000 a year. Now that pricing will typically flux up and down.

Depending on circumstances. So like in training, so like, I’ll tell you what our average households are paying. Like in training, you know, couple thousand a year is probably a good average across the board. Now, somebody that’s like single is going to be different than like married with children and both spouses work.

Um, but I think a couple of thousand is just rough average. And I think that’s what the industry is charging. And then in practice, I would say, you know, it can range a little bit more. under probably 10, 000, to 10, 000 would be the, the average for most physicians in practice. Yeah, I think, and from what I see,

Jeff: especially kind of the early attending new in practice is, is probably in that mid thousand range, you know, not mid 1, 000, but,

Daniel: you know, somewhere in the 5, 000 range.

Yeah, right. Now, if you’re… Further along, or you own a practice with employees and like multiple, lots of accounts and, you know, that’s going to obviously add to the complexity and it’s going to go higher. but a lot of, so another little side note, the last thing I’ll throw out is like a lot of, uh, Jeff mentioned the beginning, the investment focus, firms, there’s a lot of like planners that say they do the third thing we talked about, but that charged like the first category.

So that gets a little confusing, but like a lot of financial planners are like, do the third, like we’re doing financial planning. Like we’ll do cashflow, all this stuff, but we charge based on your assets. So that’s kind of a confusing setup because they’re charging based on investments, but they’re doing the other stuff.

So typically with that setup, when you don’t have a lot of assets, you end up kind of getting into this low touch. Situation where you’re not going to get much love just because of the nature of the way it’s charged. so, but it, tends to be on average 1 percent of assets when they’re doing that model is what they typically charge.

So, I mean, that sounds like a good deal if you’ve got a 100, 000 account, right? But what happens is as your wealth builds, you end up, and you want them to give advice on the full scope. It’s, you end up with like, you know, several million dollars with them. That’s like, you know, 2 million, that’s 20, 000 a year.

you know, if it’s 1%, so those fees kind of creep up pretty fast in that setup, but, you know, it can work well if you’re, if they’re giving you good service and they’re just charging 1 percent and the balance is lower. I mean, but, you know, sometimes you get what you pay for. Sometimes you don’t, it’s hard to say.

I think the key

Jeff: to all of this is just to really know what you are looking for as a service

Daniel: too, because

Jeff: our experience, like Daniel said, vast majority could actually probably use, just the extra ongoing help. And there’s a lot of value in that. if you’re listening to this podcast and you just love personal finance, you might be skewing even more a little bit towards the, I would just like a plan and I will take it and run with it option as well.

But just knowing what you’re looking for, know the areas that you want expertise in too.

Daniel: yeah, all good stuff. I’d said one more thing, but I got one more thing. One more. All right. This is your last, the last one more thing is. the free financial advisor.

The free financial advisor is not good. They’re never good. So the, the ones we were going over, it’s kind of like, eh, you know, one could work better in this situation, but the one that’s free, you’re not going to get objective advice and they’re selling stuff to make money. So I would steer clear of that setup.

Like the free financial advisor and they’re typically working for like insurance related companies.

Jeff: Definitely a really good rule of thumb if not almost

Daniel: an absolute there. Yeah Even and I this is coming from me. I used to be that one. So All right, jeff enjoyed chatting with you again today and we’ll look forward to seeing everyone next time All right.

Hope someone finds the

Jeff: right fit.