Creating A Vision
McClanahan is high energy, but even she realized that keeping up with her clients and her education endeavors was too much to handle solo. So she and her business coach, Tracy Beckes, came up with a long-term plan to expand her practice into what McClanahan refers to as an ensemble firm. “I couldn’t do what I do without the team,” she says. Her four-person shop includes a senior planner, a chief investment officer and an office manager.
Beckes, founder of Tracy Beckes and Associates, a Washington state-based coaching firm for financial advisors, also helped McClanahan improve her communication skills and develop client engagement standards that specify what Life Planning Partners does, what it delivers and what it expects from clients. “In the ER, I used to bark orders and I had to learn not to bark,” says McClanahan.
Life Planning Partners’ newer clients typically have $1 million to $10 million in assets. Clients are charged a flat annual retainer based on the complexity of the work, taking into account the number of family members, whether the firm does business planning for the client and whether the client has significant health issues that require heavy planning. The minimum retainer is $10,000 a year. If McClanahan doesn’t think prospects require that much work, she’ll refer them to other planners.
She does the tax planning, estate planning and emergency planning for clients. Carrie Jones, a senior planner with the firm since early 2014 and a 25-year veteran of the financial industry, handles projection planning and insurance planning. “I call it deep-dive financial planning,” Jones says of the firm’s approach. “It’s not just health care, and it’s not just people dying!”
Jones speaks frequently with clients about retirement planning and annually reviews their insurance coverage (property and casualty, disability, personal liability, life and long-term care). “We serve as a second set of eyes looking over their shoulder,” she says.
Life Planning Partners isn’t licensed to sell insurance, but it makes sure clients’ premiums and coverage seem reasonable. When it spots red flags, it turns them over to the client’s insurance agent. The firm also helps clients shop new coverage.
On the health-care side, Jones walks clients through the insurance options offered in their workplaces. She also helps them decide whether to opt for full coverage or a health savings account. Considerations include how much they spend on drugs and doctors each month and whether they should seek second and third medical opinions on their health issues, she says.
Jones also checks to see if clients qualify for premium subsidies under the Affordable Care Act. Because these subsidies are based on income rather than assets, people who are retired or on sabbatical may be likely to qualify, she says.
Tim Utecht, a former analyst and portfolio manager, has been the chief investment officer at Life Planning Partners since 2009. He was disillusioned with the industry’s focus on asset accumulation and product sales and considering going out on his own when he stumbled upon McClanahan’s ad for the position. He relocated to Florida from his native Wisconsin to take it.
Utecht walks clients through the firm’s investment process, develops their investment policy statements (which he reviews at least annually) and makes sure clients are able to meet their cash-flow needs. “Planning for us is always an ongoing process,” he says. “It doesn’t accumulate dust over five to seven years.”
He gives clients manageable pieces of investment education during their office visits, through quarterly newsletters and through the letters that accompany their quarterly performance reports. The team also contacts clients when there are significant moves in the market.
Life Planning Partners isn’t the right fit for everyone. Clients must agree with its client engagement standards and investment policy. A doctor with $10 million in assets refused to let the firm see all his accounts, which it requires for tax-efficiency purposes, and he also wanted to dictate his investments. “He couldn’t believe we’d turn him down as a client,” says Utecht—but they did.
A growing focus for Life Planning Partners, and the chief concern voiced by advisors McClanahan speaks with, is dementia and cognitive decline in clients. The firm is creating long-term-care plans that spell out at what point a client will stop driving, move to assisted living or enact other arrangements. The plans will be reviewed annually with clients and used as a touchstone when clients start to decline, she says.
McClanahan has also arranged for Life Planning Partners to serve as a test bed for new software that aims to catch early cognitive decline in the financial decision-making process.