September 2015 10 Questions

​Alan Moore on Serving Gen X and Gen Y, Being Virtual, and Rethinking the AUM Model

Journal of Financial Planning: September 2015


Who: Alan Moore, CFP®

What: Founder of Serenity Financial Consulting, co-founder of XY Planning Network, and champion for Next-Gen at Abacus

What’s on his mind: “I’ve never heard of an adviser losing a client because they asked to meet virtually. Clients aren’t leaving for something as silly as that.”

Podcast: Listen to our podcast with Moore at

For some, getting fired is discouraging. For Alan Moore, it’s an inspiring wake-up call. After being let go from a job with a mid-sized RIA, Moore—in his mid-20s—started his own planning firm, Serenity Financial Consulting. Wanting to serve his millennial peers, Moore effectively blew up the common business model of assets under management, and instead began charging flat fees through monthly subscriptions for planning services.

When he joined a study group of three other like-minded young planners (they’re all location independent, serving clients in their 20s and 30s), he realized other planners were likely facing the same challenges and opportunities serving the next generation of clients. As a result, Moore co-founded XY Planning Network, an organization of fee-only financial planners dedicated to serving Gen X and Gen Y.

Moore has also become a go-to expert on running a successful virtual practice. He provides sound advice on embracing a virtual model here, but if you’re looking for more, you can download a new e-book from XY Planning Network, aptly called The Virtual Advisor.

The Journal recently sat down with Moore to find out how he successfully serves millennial clients and what he thinks the planning profession can do to better serve generations X and Y. A few weeks after our interview, Moore merged Serenity with Abacus Wealth Partners, bringing his RIA clients to Abacus, and serving as the champion for Next-Gen at Abacus.

1. You started your firm, Serenity Financial Consulting, in part because you wanted to make financial planning advice and investment management available to everyone, regardless of their net worth or income. How are you making this business model work?

When I started Serenity Financial Consulting, my goal was to provide financial planning for my peers. I started my firm at 25, so I wanted to help people in their 20s and 30s, and I needed a business model that was accessible to younger clients.

Anybody can run the numbers and realize a traditional assets under management model won’t work, because people in their 20s and 30s don’t have any assets yet. And that’s where the conversation often stops. Planners say, members of Gen X and Gen Y don’t have enough assets, so we can’t do that, we can’t help them. I thought that was an adviser problem, not a client problem. That’s just a business structure issue.

When I started my firm, I just charged an hourly rate for my services, which is really a great way to get started. I was charging $180 an hour when I launched, and I moved up to $200 an hour as I took on more clients. But I’m not a big fan of the hourly business model in the long run because it’s really hard to sustain that level of traffic coming in the door, so I went back to the drawing board.

Today I charge a flat fee on a monthly basis. [My clients] basically subscribe to financial planning. I charge between $1,000 and $2,000 up front for the initial plan development, then $100 to $200 a month on an ongoing basis.

People always ask, will somebody in their 30s really pay you $150 a month? The answer is yes. I pay more than that for my CrossFit membership, my Verizon bill, cable bill—it just becomes another bill.

When I tell advisers I charge clients on a monthly basis, they look at me like I’m crazy. They say, why would you do that? No one does that. That’s not the business model. But when a client sits down and you explain that they’ll pay $150 a month for access to a financial planner, they understand because they’re already paying for what they need this way. Their entire lives are monthly subscriptions, so it just makes sense to them. I think it’s funny to try to explain the AUM model to somebody in their 20s; it’s complicated. It’s really easy to say it costs $150 a month.

That being said, I do still charge a management fee for assets that I manage. However, I don’t manage investments for anyone I’m not doing financial planning for. What that means for me is that investments become an upsell and add-on service. Financial planning is the focus. Somebody can come to me and I don’t care if they’ve got a $5,000 Roth IRA or a $500,000 Roth IRA. I can run a sustainable business on that fee, then I add on investment management on an AUM basis if it makes sense.

2. You worked at two other planning firms before starting your own practice. What was the most important thing you learned at those other firms?

The last job I had was with a mid-sized RIA. I was there about six months and was called into the boss’s office on Friday and told not to come back on Monday. It was the first time I had ever been fired. It was in that moment that I realized just how risky having a job was. One person held the keys to 100 percent of my income. In one instant they could take away my entire livelihood. That was ultimately why I decided to start my own business. It’s a heck of a lot less risky to go out on my own and have 20 or 40 or 50 clients, and if one of them fires me, I lose a small percentage of my income—but I don’t lose all of my income. So that was an eye-opener for me, because we always view jobs as security.

In my first [financial planning] job, I worked for Rick Kahler, and what I learned from him was the “other side” of money; the emotional side of money and just how important that is. He taught me to always be willing to ask the next question, to dig just a little bit deeper to find out what else is there. What’s underlying the decisions a client makes?

One thing he used to always say is, every decision is rational when you understand where it comes from. As financial planners, we can get really caught up in thinking a client is overspending, and we believe that action is unwise or irrational.

It’s about finding what really motivates them and what really drives them. When you find it, that’s when you can really enact change in a client’s life.

3. Your firm is location independent, providing financial planning services on a virtual basis. What’s your advice to fellow planners looking to serve more clients virtually?

I’ve never talked to someone who was location independent and had them tell me, what I really want is to sit behind a desk from 9 to 5, five days a week and be terrified to take a vacation. But everyone stuck behind a desk says it would be so cool to be able to take a couple of weeks and go somewhere else—to travel abroad, or even just take the kids to see their grandparents for a week and not have to shut down the office.

The thing I always tell people is try it. Pack up your family and travel across the country. Go to the grandparent’s house. Go abroad. Go wherever you want for a month. Let your clients know you’ll be traveling for the next month and if they want to meet with you, you can do so with GoToMeeting. See what they do. Truth be told, most [clients] are already doing virtual meetings. They’re doing it with other vendors and having phone calls like this. Or if they’re older, they’re on Skype with their grandkids—they get it. They know how to use this technology already, so just give them the option.

Make [virtual meetings] an option even for your local clients. Sometimes people confuse working virtually with working with clients all over the country. One of the most powerful marketing strategies is still local marketing, but you can work virtually with local clients, especially if you live in a bigger city. Clients don’t want to drive to your office and deal with parking and getting a babysitter or taking a half day off work. If clients want to do a meeting at 5 in the evening after work, do it virtually so they don’t have to come to the office.

When I started [my own firm], I actually had an office. When I made the option available to clients to do a virtual meeting, I could never get them back in the office. It gives them the same freedom and flexibility it offers to the adviser.

I think the important first step is just do it and see how your clients react. I’ve never heard of an adviser losing a client because they asked to meet virtually. Clients aren’t leaving for something as silly as that. So just give it a shot and see what they do.

4. Tell us about Serenity’s client referral program. How does it work and is it effective for you?

It’s more of just a thank you than a referral program. I read the book Happy Money, which is all about the science of happiness. We always say more money doesn’t make you happier, yet, if you spend your money effectively, more money can actually equal more happiness.

One of the ideas in the book is that instead of giving people money, give them the ability to donate money, because we know that donating money really does make people happier. So I went out and found, which is an organization that allows you to donate to specific projects that teachers in the school system have requested. If you donate $50 to any project, you get a handwritten note back from the class. So I order $50 gift cards and give them to clients who make referrals, and they can decide where they want that money allocated. It could be local; it could be a project they’re really passionate about.

People love it. I’ve gotten really good response on that, but I won’t say that it’s generating client referrals all over the place. It was never intended to drive a ton of leads or anything like that. It’s just a nice way of saying thank you, and people seem to really appreciate it.

5. Why is educating your clients so important to you, and where does this passion stem from?

I was home schooled from second grade through high school. And the cool thing about being home schooled is that you get to play with your curriculum; it doesn’t have to be quite as rigid as the traditional school system. When I was about 15 years old, my mom put me through Dave Ramsey’s Total Money Makeover book and course.

When I went to college, I was getting a monthly check from my parents like a paycheck, and I would divvy it out in little envelopes. I would save this much for gas, this much for going out, this much for dues for organizations, and all that. I looked around. No one else was doing this. Everyone was signing up for credit cards outside the local pizza shop because they got a free pizza in return for signing up for a credit card—that stuff is now illegal, but it wasn’t when I was in school. I saw that there was so much lacking on the educational side when it came to money. I didn’t know that people didn’t get money education in middle school and high school.

So when I was getting my degree in financial planning, I stayed on and got my master’s degree as well. I thought I’d go on and get my Ph.D. I really wanted to be professor. But as my resume shows, I don’t work well when I work for other people. I quickly learned that being in the academia world was not a good fit because I don’t play politics all that well.

But I had the experience of interning with, and then going to work for Rick Kahler. That’s where I saw there was an opportunity to educate clients and empower them. Finanical planning could be more than just telling them what to do, but really helping them understand the “why” behind what they’re doing.

I’m a big fan of Carl Richards, author of The Behavior Gap. One of the things he talks about is selling simplicity. Instead of trying to sell complexity and confuse clients into believing that you know everything and they should inherently trust you, it’s better to simplify things. Help them understand what you’re doing and educate them along the way. At that point, your clients will really take control of the situation and actually go implement.

He’s got a great metaphor on being a doctor. You don’t go to the doctor when you’re not feeling well and get 100 pages of reports and data and graphs. You get a single slip of paper with a prescription that’s a few words and a number of milligrams and how often to take it. And we pay a lot of money for that little slip of paper with a few words on it. So how do we do that as financial planners? It’s all about educating.

And the truth is, clients do want to understand. They do want to be empowered. We shouldn’t want to create a culture of reliance on the financial planner. Once you break away from that culture and really educate your clients, they don’t ever leave because you’re empowering them.

6. You are a co-founder of the XY Planning Network, the largest organization of fee-only financial planners dedicated to serving Gen X and Gen Y. In your opinion, what are the common financial planning needs among Generations X and Y?

I like to start with what we don’t do, because this is where planners really get hung up. We don’t do a lot of retirement planning. We don’t do a lot of complex income tax or complex estate planning because younger clients don’t need it. Typically Gen X runs up to age 50. They’re turning 51 this year on the oldest end, so we’re talking about the 50 and under crowd. That doesn’t mean we don’t do comprehensive financial planning.

[Gen X and Gen Y] are looking for comprehensive financial planning. We go back and scrap the existing service model and instead ask, what do younger clients actually need help on? The answer is cash flow.

Cash flow is huge on the income and the expense side. On the expense side—which is where advisers tend to focus—we’re doing a lot with budgeting and spending habits and debt management.

Student loans can be its own bullet point. Student loan analysis is this generation’s Social Security analysis. I’ve yet to work with a client that didn’t come to me with student loans. They don’t understand them. They’re too complex. So we’re doing a ton of work around student loans and maximizing the programs that are available.

We’re also doing a lot of work on the income side—negotiating salary raises, starting businesses, or looking for ways to do what I call “side hustle.” For instance, if you and I sat down because your budget wasn’t quite working, and we realized you needed to cut $500 a month out of your budget, you’d want to cry, right? No more eating out, not more vacations, no more fun.

On the flip side, what if we said, we have a $500 a month issue here. What are ways you could earn $500 a month? Could you freelance for another publication? You’re going to get really excited to tell me all the ways you could earn $500 a month. It’s a much better conversation to have with our clients. What we find is those side hustles often have the potential to become full-time businesses.

We’re there to help, because as financial planners—especially those who are part of Gen X and Gen Y— many of us have started our own businesses. We know what it takes and can help clients with that process. Life transition planning is a huge piece of what we do—buying a house, having a baby, getting married, getting divorced—all those things that tend to happen in our 20s and 30s.

7. Do you think the financial planning profession as a whole is doing a good job serving the needs of Gen X and Gen Y clients?

No. Our issue, as a profession, is we don’t have enough young talent. Right now, we only have enough advisers to serve the rich, old people. We need more advisers. And I mean, we need a lot more advisers. Gen X and Gen Y is 150 million people between the two generations.

We have to grow the ranks of financial planners so that we have enough planners to start serving these younger clients. Then, I think the other piece, is for older advisers who have built successful businesses, if they really want to engage and retain and recruit younger advisers, they’re going to have to serve younger clients.

From my experience, 90 percent of the younger advisers are not excited about helping rich people spend their money. They want to help people with the life situations that they’re in.

If we want to serve younger clients, we’ve got to refocus the profession into helping people and bringing in more young advisers so that they can serve the younger clients.

8. Having a virtual practice, what are some of your favorite software programs or technology platforms?

I wish I could pick a financial planning technology, but let’s be honest, most technology with financial planning is just not up to snuff. It’s getting better, but we are very behind. So, my baby when it comes to technology is my scheduling software. I use ScheduleOnce, but there are a bunch of other ones out there that other advisers use and love. It allows me to do 100 percent of my scheduling online.

I realized that I was caught in the email hell of going back and forth trying to get things scheduled. With online scheduling, I send a link to my clients, or I can put it on my website for prospective clients to schedule a meeting. Just go to my website and click this button and schedule. I use it with members of the media and other financial planning professionals. You can set up parameters like no more than three meetings in a day, or no more than seven a week, or prospective calls only on Mondays. You can really customize it.

It does make the scheduling process much easier, but I think it also eliminates no-shows because clients get a reminder email 24 hours in advance. It can be used for in-person meetings, virtual meetings, Skype—whenever you need to arrange a meeting. It really helps me manage my calendar with multiple businesses and a lot of different pieces that pull me in different directions.

Another piece of technology I like is the time-tracking app RescueTime. The paid version allows you to track your time so you can see where you spend your time. One of the things we know about clients is that if they start tracking their spending and looking at reports, they will inherently make spending adjustments based on that information because they’ll see it. It’s the same with time.

When advisers start tracking their time, they suddenly become a lot more efficient. For instance, if they see they spend 10 hours a week scheduling clients, then they go buy ScheduleOnce. Or if they’re spending a good amount of time answering the phone, they go hire Ruby Receptionists to answer calls. It’s really interesting to see that.

9. You are active in a virtual study group. What’s the key to a virtual study group’s success?

The study group is FP Hackers. There are four of us in the group. We represent all four time zones. At 28, I think I’m the youngest and the oldest is 34, but we run very similar businesses. We all run monthly subscriptions, we’re location independent, and we work with clients in their 20s and 30s. We formed in the summer of 2013, and I think all four of us would tell you it has launched our businesses and our careers. It actually launched XY Planning Network.

I think the key to success to any study group, particularly one that is virtual, is you’ve got to have a willingness to collaborate and help other people build their businesses. Ultimately, we’re not competing for clients. If a client comes to me and I’m not a good fit, I’ll send them to one of my study group members. We really do help each other.

The No. 1 underrated thing about a study group is that it provides a way to share your wins and losses with others. It’s really hard to brag on Facebook about getting a new client or vent about losing a client. The study group is a safe space to share and really lay it out there.

If anyone in my study group called and said I need you here tomorrow, I’d be there. I wouldn’t ask questions. That’s what you’re looking to cultivate.

10. As a young planner, where would you like to see the financial planning profession headed in the next five to 10 years?

I hope in five to 10 years we’re actually a profession. I think a lot of us call it a profession because we’re just hoping that one day it turns into that. I think the way that we become a profession is we do real financial planning that focuses on planning—that gives advice, that’s provided by a professional who is a fiduciary, and all the things that are just inherent in what consumers expect of us. I hope that’s the norm and not the exception anymore.

I believe that within 10 years the assets under management business model will become a niche business model and no longer the predominant one. I think that’s also how we’ll know when we’ve become a profession, because an AUM model can only serve maybe 5 to 10 percent of Americans. Financial planning will never be a profession as long as we are stuck on this business model. Instead, it will be a combination, I think, of hourly and monthly subscriptions, some other types of quarterly retainers, or something else. Other business models will pop up. In 10 years I hope we get paid to do financial planning in a way that makes sense and makes it accessible to many more people.

We carved out the Gen X and Gen Y niche, but ultimately, there are a few baby boomers who will pay $150 to $200 a month for financial planning who don’t have assets. Yet, few advisers are really interested in targeting that market right now. I think that’s going to be huge, and when that shift happens is when we’ll start attracting more and more talent. People will go to college thinking, I want to be a financial planner; I want to go help people with their money.

And I hope one day that high school kids know what a CFP® [professional]or what a financial planner is and what we actually do. That’s another way we can get people interested in it. We have an awesome profession. Ultimately, we help people live great lives, and not many professions can say that. I’ve never talked to an accountant who said, I help people live great lives. No, I save people money on their taxes.

I hope that as we move into true “profession” status, that people actually become aware of what we do to the point that it becomes really exciting to go get a degree in financial planning and have the opportunity to join the ranks of financial planners. Image removed.

Carly Schulaka is editor of the Journal. Contact her HERE.

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