Earning a living advising millennial clientele may seem implausible, considering many are up to their eyeballs in student debt. But since opening his financial planning firm a year ago, this advisor and accountant has developed a fee-only compensation structure that is working well for him and his young clients.
Cortlon Cofield, CPA/PFS, owner of Cofield Advisors LLC in Chicago, advises young professionals and business owners. Approximately 35 percent to 40 percent of his clients are self-employed or have a side business. His clients' annual household income usually falls between $100,000 and $200,000 (his minimum is $70,000) and their investable assets most often are $100,000 or less, with some having no money to invest. More than half need help with student loan payoff plans.
“Most clients are completely lost,” said Cofield, who holds bachelor’s and master’s degrees in accounting and previously worked for KPMG and Northern Trust Asset Management. “They make good money but have no idea” how to plan.”
This is not to say they’re not smart,” he added. “They’re smart in their own respective fields.”
Nearly all his clients are ages 25 to 40, although a couple of them are 42. “I want clients I can relate to,” said Cofield, who turns 27 this month. He also likes working with millennials because they’re ascending the career ladder. “It can become lucrative if I get them early and get them building good habits.”
For clients seeking help with a problem or project, Cofield charges $150 an hour. But approximately half of his 50 clients have hired him on a long-term retainer basis through one of his non-contractual packages. Millennials don’t favor contractual agreements, he said, so he avoids this barrier.
Cofield’s starter service package ($125 per month) includes financial coaching and planning, investment advice, insurance review and risk management, financial education webinars, budgeting, debt management and credit consulting. His growth service package ($175 per month) includes his starter services plus retirement and investment planning, student loan payoff plans, mortgage consulting, basic investment analysis and college saving strategies.
His wealth builder package ($225 per month) is geared for clients who already hold investments and need more complex planning strategies. It adds tax planning, business consulting, annual portfolio rebalancing and advanced analysis of 401(k) and investment accounts.
Cofield adjusted his fees multiple times during his first year in business. “It was a lot of trial and error,” he said. “I was substantially underpricing at first to get clients in the door.”
His package fees currently run 1 percent to 2 percent of his clients’ average monthly income -- in line with some other fee-for-service advisors. Many consumers are comfortable spending this percentage on monthly subscription services, he said, and pushback from clients is rare when he mentions his monthly fees.