Considering Activate Wealth was officially launched about 2 months ago, I felt it would be a good time to dig in on exactly what this company was built to do. In an effort to help you understand what we do, how we do it, and more importantly WHY, I have decided to put together an 8 part blog series detailing my thoughts on financial planning for young professionals.
This first blog is going to take a high level overview of the firm’s strategy and value proposition. The following 7 blogs will cover these major areas related to the planning process:
- Cash Flow Management: Growing your income and using it as a tool for wealth building
- Tax Planning: Managing income taxes and avoiding unnecessary tax bills
- Investment Planning: Implementing effective, repeatable, and goal oriented investment strategies
- Debt Management: Managing your debt situation
- Employee Benefits: Optimizing your benefits at work
- Education Planning: Planning for future education costs
- Insurance & Estate Planning: Protecting yourself and your family from potential disasters
Where We Come From:
Activate Wealth was launched with the sole purpose of providing comprehensive financial planning services to busy young professionals. The financial planning industry has done a historically bad job serving this type of client. Why is that?
Misconceptions regarding financial planning needs and reliance on legacy compensation/client service models
If you want to gain insight on why a business makes certain decisions, what should you do? Follow the money! The revenue line will typically give you a good sense of what is driving business decisions within a given company.
What are the primary sources of revenue for most financial planning firms? Most firms are either selling you a product for a commission from a third party or managing money for a fee paid by you. Given this information, you will likely run into a lot of product pushing early in your career. You don’t have any assets to manage, so financial professionals have to sell you a product. Make sense?
I discussed in detail the benefits of financial planning early in your career in my last blog post, so we won’t beat a dead horse. If we can agree that there are benefits to the planning process well before retirement, why is it so hard to find a comprehensive financial planner at a young age? Follow the money!
The process for most firms looks like this: Find someone who is about to retire, have them roll over their money to the firm, and manage it for a fee (typically around 1%). For this fee, the quality firms will manage your money and provide comprehensive financial planning services. This model works great for these types of clients and there is absolutely nothing inherently wrong with it (emphasis on “these types of clients”).
Working with a younger clientele can be a major undertaking for a lot of firms. Here are some of the problems these firms typically run into:
- Technology: Do they have the ability to work 100% virtually? Young professionals are busy. They may not have time to come into an office or meet during typical working hours.
- Billing: Can they bill via ACH or credit card? Are they completely reliant on billing from investment accounts?
- Value Proposition: Is their value proposition too investment management heavy? Are they providing enough value in financial planning to justify their fees?
- Marketing & Branding: Who do they work best with? Can they justify spending time and money trying to attract a younger clientele?
Why Would You Work With Activate Wealth?
Activate Wealth takes the stance that young professionals not only have detailed financial planning needs, but they are willing to pay a professional to help them manage their finances.
If you are wondering if you should work with us, ask yourself these 3 overarching questions
Question 1: Are you trying to balance spending money now vs. saving for your future?
This is pretty much THE conversation most young professionals want to have. How in the world do we decide how to allocate our money to balance these 2 goals? When you work with Activate Wealth, we are going to dig in on these types of questions:
- How do I decide where to put my money? Do I invest in retirement accounts? Should I pay down my debt? Fund a savings account? Open a brokerage account? Invest in my business?
- How will all of those decisions impact my future?
- How much money can I spend on discretionary expenses such as travel or luxury items without feeling bad about it?
At Activate Wealth, it is our job to put together a plan that properly balances your present well being AND your future needs.
Question 2: Are you looking to simplify complex financial situations?
At a certain point in our careers, things start to get a bit more complex. Here are a few scenarios you may be dealing with:
- Looking to buy your first home.
- Saving for college for your newborn child.
- Addressing insurance and estate needs for your young family.
- Managing your portfolios in a diversified, low cost, tax efficient, and goal oriented fashion.
- Dealing with increasing income taxes that you feel like you can not control.
We were never taught how to manage these situations. Why not get a second opinion from a professional who is in your corner 100% of the time?
Question 3: Do you want to save time?
People are starting to realize the biggest asset in their lives is TIME. As a business owner, I am constantly trying to find ways to do more of what I love and less of what drains my energy and takes too much time.
- More meeting with clients, networking, and implementing financial plans.
- Less scheduling appointments, sending redundant emails, and bookkeeping.
As a high achieving professional, you are likely looking to do the same thing.
- More investing in yourself/career, spending time with your family, and doing the things you enjoy.
- Less dealing with things like car repairs (mechanic), home updates (contractor), and tax returns (accountant).
- Less worrying about your financial future!
Why waste any more time on things you don’t enjoy?
- We believe financial planning firms have done a poor job serving the next generation of clients. We want to fix that.
- Work with Activate Wealth if you want to:
- Enjoy your money now while saving for the future.
- Simplify complex situations.
- Save time and do more of what you love.