Plancorp staff are paid bonuses tied to the growth and success of the firm. Currently, 14 individuals own 60% of Plancorp, and all of the firm’s staff are salaried.
“Building a cohesive team like that requires dedication to a specific culture and discipline,” says Kerckhoff. “We’ve tried to make sure that we’re attracting the right kind of people who can put their own egos aside and make sure the client’s interest is first and foremost.”
So far, clients and advisors appear to appreciate the Plancorp philosophy—the firm boasts an advisor retention rate of approximately 95%, and a client retention rate of 99%, Kerckhoff says.
New clients are acquired largely through referrals, both from clients and centers of influence, in the regions served by Plancorp advisors.
The firm remains open to innovation and change, says Kerckhoff, as long as a strong case can be made for proposed changes. The same philosophy governs Plancorp’s investing decisions.
Zero Alpha Sought
Plancorp’s ultra-passive, efficient investment philosophy also jibes with the index fund and the smart beta management preferences of most robo-advisor services.
Plancorp believes that active management often leads to suboptimal outcomes for investors. The firm’s investment philosophy can be boiled down to three mandates: embrace market pricing, don’t try to outguess the market and resist performance chasing.
“One thing I can assure you is that no client’s financial plan has in it that they need to own an asset that goes bonkers to meet their goals,” says Peter Lazaroff, co-chief investment officer at both Plancorp and BrightPlan.
Rather than timing the market or finding the best opportunities, Plancorp tells clients that the market should be made to work for them. Success comes from a patient, long-term approach. No investment advice should be given unless it is academically supported. Financial decisions must be made with the backing of evidence.