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  • Anjali is on Kitces!

    Thought you all might be interested in listening to/reading Anjali Jariwala's Kitces interview, just out today. In case you're interested, Anjali is definitely one of the "good guys" of fee-only planning. Way to go, Anjali!
    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

  • #2
    My guest on today’s podcast is Anjali Jariwala. Anjali is the founder of FIT Advisors, a niche advisory firm that works entirely virtually with clients, and focuses on young physicians and small business owners in their 30s providing financial, investment, and tax planning advice for an annual retainer fee that starts at $10,000/year...

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    • #3



      My guest on today’s podcast is Anjali Jariwala. Anjali is the founder of FIT Advisors, a niche advisory firm that works entirely virtually with clients, and focuses on young physicians and small business owners in their 30s providing financial, investment, and tax planning advice for an annual retainer fee that starts at $10,000/year…

      Click to expand...


      Have you read the full text of the interview?
      Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        1% AUM does seem high fee-wise.

        I could imagine paying a buyers agent 1% to source a property to buy. But 1% every year would cut into the return too much.

        I probably would not be a good client for this sort of business model.

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        • #5
          I read through about the 25:00 mark of the transcript and fail to see how such an advisor would be in the “good guy” camp. The whole thing I read is about her advisor business and how she’s making money - money from folks like us. I didn’t see anything about fee-only - except for those without enough assets to hit the stage where they’re charged on the percent scale. $10,000 for the first million. That’s a lot of money. And after that, not an AUM fee but actually an AUA fee - assets under advisement, not just management. Like, your bill will include 1% fee calculated from the cost basis of any rental property you own. And workplace retirement accounts.

          Johanna, respectfully, I ask you to explain how such an advisor is a “good guy” from the audience perspective here.

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          • #6
            Thank you for asking, jacoavlu.

            Anjali and I have talked in depth about the similarity of our practices and she is, quite honestly, the only other physician-focused financial planner I have met who approaches planning the way we do, not from the POV that the investments are the plan but from the POV that the investments are only a tool to help the clients achieve their long-term goals. She puts in a similar number of hours on each client and is very personally involved in their success. She is also a CPA with some pretty heavy experience, which she brings to each engagement. Because her focus is on business owners (physicians and non-physicians), the tax advice is a very important value add. Most of the participants on this forum are not her target clients, iow.

            I have not spoken to Stephen Podnos or Clint Gossage, who also comment on the forum, so this is no reflection on their businesses or how they serve clients. But I have read many, many ADVs for physician FAs and they are, for the most part, similar in nature.

            You should understand that Kitces' posts are written for the purpose of helping financial advisors by explaining what other advisors have done to become successful. Anjali's fast growth is testament to the fact that she is doing something right and, after several discussions with her, I do not believe it is blind luck. I believe the fact that Anjali is married to a physician gives her a unique insight into helping physicians. If you would continue reading, you'll see that, while her minimum fee is $10k, she uses the AUA to calculate an annual fixed fee, not as a blanket fee on everything being discussed. It is used as a barometer, not a thermometer, to set a fee based upon complexity.

            I have been quite honest in the past that I used to be an AUM advisor and made the strategic decision to change to flat fee because it was what WCI readers expected. While it was one of the best decisions I've ever made, that doesn't mean that someone with Anjali's or Stephen's fee structures is doing a disservice to their clients. A "good guy", to me, is a financial advisor who puts the clients first in every respect and who has the knowledge, experience, and integrity to bring a high degree of value to the client's financial plan. If the fees are unreasonable, a financial planner won't be able to build a business or won't be able to keep the business alive. Even though you might not agree with how she structures her fees, Anjali is such a person and she puts her heart into what she does.

            I did not mean to become the ad copywriter for Anjali. She has given some very insightful and intelligent advice on this forum and I thought others would like to know. In hindsight, I probably have done her a disservice by starting this thread and, for that, I am regretful.
            Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #7




              You should understand that Kitces’ posts are written for the purpose of helping financial advisors by explaining what other advisors have done to become successful.
              Click to expand...


              This I do understand. Which is why I think it's strange to see on this forum, where the principal tries to educate folks so they can "fire their financial advisor."




              If you would continue reading, you’ll see that, while her minimum fee is $10k, she uses the AUA to calculate an annual fixed fee, not as a blanket fee on everything being discussed. It is used as a barometer, not a thermometer, to set a fee based upon complexity.
              Click to expand...


              I did keep reading. Found this part interesting (bold added by me):

              Michael: Okay. And then how does that fee get adjusted, like, over time? You know, you said you kind of do this AUM calculation but then it gets converted to a flat fee because, of course, we’ve got to set it up in the payment system to invoice the business accounts. But then what do you do over time? Like, are you recalculating every year or every couple of years? How do you adjust the fee as you work with them on an ongoing basis?

              Anjali: Sure. So I do look at the fee every year and then make a determination whether I’m going to increase it or not. I like to try to keep clients, you know, at kind of a consistent fee for the first two years. That hasn’t always been the case because some I’ve just, like, mispriced and they were grossly underpaying compared to the level of service we were providing so I had to adjust it for them. And, you know, if there was going to be a sizable fee increase I told them I could do it over time, so just kind of slowly ratchet them up to the fee that they should be paying.

               

              I'm sure she's giving her clients great service. I just respectfully think this type of fee structure (is this what we call fee-only?) is antithetical to the philosophy around here and it's strange to see this linked by a moderator. My opinion.

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              • #8
                Yeah, it's interesting.  What is fair reimbursement for an advisor?  For me to evaluate a chest pain patient, even though the final impression could be wildly different, the basic approach starts with an H&P, so a flat fee would be ok.  However, if I'm intubating you, performing CPR, putting in a central line, calling 4 consultants, I'd expect to be paid more.

                So, I guess if the financial situation is that high touch, one could justify "slowly ratcheting"...but it goes without saying that if I'm paying somebody to take my whisky collection under advisement, they better be brokering some killer deals on my behalf.  "Where are the customers' yachts?"

                Johanna, don't fret, I don't think it was a disservice!  It's a free market.

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                • #9
                  I have only skimmed this stuff, but I think the main problem is that she is expensive.  She may or may not be bad.  That would be determined by the advice that she gives in a particular situation.

                  I suppose it is theoretically possible for someone to be so expensive that no amount of great advice could justify the cost. I don't think she is at that level.

                  If we assume she is good, then the vast majority of docs would be better off paying her AUM and taking her advice.

                  They would be even better off if they found someone who could provide similar quality advice at a lower cost (certainly possible).

                  Of course they would be even better off that that by just spending a little time learning how to take care of all of this stuff and then doing most or all of it themselves.  But apparently some people find it so daunting and/or unpleasant that they would prefer to just throw some money at the problem.  Throwing some money at Anjali to take care of it seems like it will turn out fine (unless someone has some reason to doubt the quality of her advice), but more cost effective options exist.

                   

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                  • #10
                    https://www.saving.org/savings-bonds/saving.php?saving=10,000

                    10k per year at 5% for 30 years is $707,607.90.

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                    • #11




                      https://www.saving.org/savings-bonds/saving.php?saving=10,000

                      10k per year at 5% for 30 years is $707,607.90.
                      Click to expand...


                      Plenty of docs, left to their own devices, will cost themselves a lot more than that over 30 yrs.

                      But, you're right, that is a lot of money.

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                      • #12







                        https://www.saving.org/savings-bonds/saving.php?saving=10,000

                        10k per year at 5% for 30 years is $707,607.90.
                        Click to expand…


                        Plenty of docs, left to their own devices, will cost themselves a lot more than that over 30 yrs.

                        But, you’re right, that is a lot of money.
                        Click to expand...


                        Yes. In that case, it'd be worth it. But probably not because of the delta of knowledge between her and average poster on this board.

                         

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                        • #13
                          unlikely anyone is going to pay such an advisor for 30 years (nor would fees stay at $10k for 30 years)

                          but even opportunity cost of $10k fees for only 4-5 years is about $200k at 30 years

                          it is certainly not that such an advisor can't add value; just likely not to the typical member of this forum

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                          • #14










                            https://www.saving.org/savings-bonds/saving.php?saving=10,000

                            10k per year at 5% for 30 years is $707,607.90.
                            Click to expand…


                            Plenty of docs, left to their own devices, will cost themselves a lot more than that over 30 yrs.

                            But, you’re right, that is a lot of money.
                            Click to expand…


                            Yes. In that case, it’d be worth it. But probably not because of the delta of knowledge between her and average poster on this board.

                             
                            Click to expand...


                            Well, for the average poster on this board, the vast majority of advisors would be a waste of money.  It's just a question of how much.

                            Comment


                            • #15
                              I'll freely admit a COI -- she's been an advertiser on my blog since last summer and we've renewed that relationship for another several months recently. She is also on the WCI recommended advisor page so she passed enough muster to make it on here also as a paid advertiser.

                              Anjali's fees are higher than some who do AUM, lower than others. Her fee is lower than what I briefly paid when I worked with Larson Financial several years ago.

                              I am very much a do-it-yourselfer and I encourage others to do it themselves, and freely say so on my own site and elsewhere.  If someone is going to pay an advisor I recommend they learn what they can and then start do things on their own at some point if they are inclined enough to learn a little.

                              However I believe Anjali knows what she is doing and can give good advice, so at least partially justifies her fees.  Obviously that statement is highly  subjective depending on your own abilities and experiences.

                               
                              An alt-brown look at medicine, money, faith, & family
                              www.RogueDadMD.com

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