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.

To keep his monthly costs affordable and to protect his business, Cofield charges an onboarding fee which clients must pay -- either in full or in installments -- within 30 days of signing up. It’s $1,000 for his starter service package, $2,000 for his growth service package and $3,000 for his wealth builder package.

When he explains the dual purpose of his onboarding fee to clients, “they get it,” said Cofield, who does extensive work for clients during their first few months with his firm. “Clients are better clients when they have skin in the game,” he said. They associate price with value and are less likely to “blow off your recommendation,” he said -- a lesson he learned when he joined the XY Planning Network to receive guidance on starting a firm.

Cofield also educates clients that “expenses are guaranteed, returns are not,” he said.

One client who had $100,000 invested in a brokerage-sponsored target-date fund didn’t realize it had a 1.9 percent annual operating fee (including a 1 percent management fee). Cofield showed the client his account could potentially be worth $1,005,000 after 30 years but its fees would top $440,000. He then explained a passively managed fund with the same potential returns but an annual operating fee of 0.15 percent could provide about $962,000 in retirement instead of $565,000.

Cofield said his free consultations have a conversion rate of 60 percent to 70 percent. If hourly clients wish to establish a long-term relationship, he’ll apply their project costs to his onboarding fee.  Millennials earning below $70,000 annually usually don’t need an advisor on a continuing basis, said Cofield, who doesn’t want anyone to pay for services they don’t need.

“That would defeat the purpose,” he said.