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Earning Premium Planning Fees By Demonstrating Hard-Dollar Tax Savings For Business Owner Clients: #FASuccess Ep 491 With Patrick Lonergan

May 26, 2026 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Patrick Lonergan Podcast Featured Image FAS

Welcome everyone! Welcome to the 491st episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Patrick Lonergan. Patrick is the founder of Vital Wealth, an RIA based in Clinton, Iowa, that generates $2.5 million in annual advisory fee revenue for approximately 100 client households.

What's unique about Patrick, though, is how his firm is able to charge its business-owner clients annual consulting fees north of $70,000 by offering tax planning strategies that frequently save them hundreds of thousands of dollars.

In this episode, we talk in-depth about how Patrick is able to offer his clients significant hard-dollar tax savings by first taking advantage of what he calls "level one" administrative and bookkeeping opportunities (such as maximizing the QBI deduction or choosing an optimal business structure), how Patrick then moves on to "level two" opportunities where some investment is required on the part of the client (for example, creating and contributing to defined-contribution and defined-benefit retirement savings plans), and how Patrick also considers "level three" strategies that combine sections of the tax code to create tax efficiencies (for instance, by compliantly setting up a micro-captive insurance company).

We also talk about how the tax savings strategies Patrick puts to use are particularly valuable for entrepreneurs who can reinvest in their business (potentially generating profits that exceed any deferred tax burden), how Patrick assesses tax planning opportunities with an eye towards cash flow management for his clients to ensure both their personal and business spending needs are still being met, and how Patrick’s clients have become prolific sources of referrals given their ability to easily explain the hard-dollar value his firm offers to fellow entrepreneurs.

And be certain to listen to the end, where Patrick shares how he transitioned from being an entrepreneur himself in the real estate business to entering the financial advice industry in the insurance channel to eventually going independent and starting his own RIA, how Patrick has handled transitioning legacy clients who live in his small town but who aren’t good fits for his current service offering, and how Patrick has found that persistence and "showing up" every day, even during tough times, has contributed to his success as a business owner.

So, whether you’re interested in learning about a tax-savings framework for entrepreneur clients, charging a premium fee in return for offering significant hard-dollar tax savings opportunities, or the value of cash flow management for entrepreneur clients, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Patrick Lonergan.

Designing A (Scalable) Advisory Firm PTO Policy For Your First Hire And Beyond

May 25, 2026 07:04 am 0 Comments CATEGORY: Practice Management, Research

For many advisory firm owners, deciding how much time to take away from work is largely a personal choice shaped by client needs, business demands, and personal priorities. But once a firm hires employees with their own need to step away from time to time, Paid Time Off (PTO) becomes much more than an individual preference: it evolves into a key part of firm culture, team wellbeing, operational resilience, and talent retention. As our own Kitces Research on Advisory Wellbeing consistently shows, autonomy over time and work-life balance are among the strongest drivers of professional satisfaction, even for highly compensated advisors. Because while compensation matters, there is a point where additional income delivers diminishing returns relative to the ability to enjoy more flexibility and personal time. On the other hand, firms that fail to create sustainable workloads and meaningful opportunities for rest may ultimately face lower morale, reduced productivity, and higher turnover costs than firms that proactively support employee time away from work. And so a well-designed PTO policy is ultimately an investment in employee wellbeing, productivity, and long-term sustainability.

The starting point of an effective PTO policy is a consistent structure. Advisory firms generally structure PTO using one of three approaches: separate leave, single-bank, or unlimited PTO. Traditional separate leave systems divide vacation and sick days into distinct categories (e.g., 15 vacation days and 5 sick days). Single-bank PTO combines all paid leave into one flexible bucket, allowing employees to allocate time according to their own needs. By contrast, unlimited PTO policies put no putative restrictions on the amount of time off available for any purpose – which while theoretically offering maximum flexibility for employees and reducing the administrative burden of tracking PTO accrual, often ends up resulting in employees taking less time off than under traditional plans due to the social stigma of taking the 'most' time off. To that end, although every system has its administrative benefits and burdens, the success of a firm's PTO policy depends less on the number of nominal days off it offers and more on whether employees can realistically use them without damaging their own career growth or creating more operational strain for themselves or their teammates.

Small advisory firms often struggle most with this challenge because employees typically wear multiple hats, and there may be little redundancy across roles. Research shows that advisors in very small teams frequently report greater difficulty taking time off than solo advisors or members of larger firms because there are too few people available to provide meaningful coverage. Which suggests that effectively implementing a PTO policy requires firms to build operational redundancy through cross-training, clear documentation of responsibilities, and managing each team member's workload to accommodate for the possibility of backing up other employees' work. Teams may also need to clarify which operational tasks must continue during absences (e.g., trading and rebalancing and handling client questions and requests) and ensure that more than one person understands each essential workflow to ensure that the firm can stay running smoothly during any team member's time off. All of which can help make sure that employees feel comfortable using the PTO they have available (and actually being fully 'off' from work while on PTO) without worrying about falling behind or burdening coworkers with extra work.

To enact this in real time, firms may choose to put together a piecemeal cross-training plan, training employees on different processes on a weekly or monthly cadence to ensure everyone remains up-to-date on the work they might be expected to cover. From there, every period of PTO becomes an opportunity to ensure that everyone fully understands each other's work – and as the team iterates and builds confidence in covering each others' roles, taking time off can become easier and easier over time. And for certain tasks requiring more specialization, advisory firms may also consider bringing in fractional help to ensure they can genuinely disconnect.

Ultimately, firms that encourage employees to take meaningful breaks, establish realistic workload expectations, and invest in cross-training and redundancy are better positioned to maintain both employee wellbeing and a consistent quality of client service. And importantly, firm owners must model these behaviors themselves. Advisors who encourage employees to take time off while never disconnecting themselves may unintentionally signal that true rest is incompatible with professional success. But when advisory firms thoughtfully design PTO systems that balance flexibility, accountability, and operational resilience – for both leaders and employees – they create healthier teams, stronger firm cultures, and ultimately more sustainable businesses that better serve both employees and clients alike!

Weekend Reading For Financial Planners (May 23-24)

May 22, 2026 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that a recent survey finds that while investors are largely accepting of financial advisors' use of Artificial Intelligence (AI) technology in their practices, they want to know how their advisor is using it, as their comfort varies significantly based on how it's used (with clients being significantly more accepting of their advisor using AI for administrative tasks or educational content but much less so for investment recommendations or automated responses to texts or emails). Which suggests that advisors can build trust with their clients (a factor which the survey suggests human advisors appear to maintain an advantage over AI advice tools) by being open with prospects and clients not just concerning whether they're incorporating AI tools into their practices, but also the specific functions they're used for (and how client data might be impacted).

Also in industry news this week:

Single Americans are largely financially confident, according to a recent survey, but appear to have planning gaps when it comes to insurance coverages and estate planning documents that are particularly important for unmarried individuals
Donors appear to have primarily altruistic motivations for their giving and want to get into the details of how their gifts are being used, according to a recent survey, suggesting that advisors could provide a deeper level of support for charitably minded clients by going beyond the tax implications of different giving methods and helping clients maximize the impact of the gifts they make

From there, we have several articles on retirement planning:

How knowing whether a client worries more about outliving their assets or about underspending in retirement can help advisors match them with an appropriate income generation strategy
How uncovering values and goals can encourage hesitant retired clients who can afford to spend more on what's most important to them
Why uncertain "healthspans" mean that some clients might treat retirement more as a sprint rather than as a marathon (and prefer to front-load their spending)

We also have a number of articles on practice management:

How financial advisory firms can create cash compensation structures that scale as the firm grows
Why incentive compensation structures sometimes come with unintended consequences that could reduce trust between a firm and its employees
Four features that make up successful advisory firm compensation plans, from creating opportunities for advancement to offering benefits that match employees' needs

We wrap up with three final articles, all about AI and the future of work:

How advisors can respond effectively when a client consults an AI chatbot with financial planning questions (and brings the output to their next meeting)
Why AI might not lead to a job 'apocalypse', and how those working in human-centric fields could thrive into the future
While AI tools have made it easier than ever to discover information, the reduced friction involved in learning and training could ultimately prove detrimental to individuals' expertise (and job security) as well as organizations' institutional knowledge

Enjoy the 'light' reading!

Implications Of The SEC Proposal(s) For New $1B AUM Threshold(s) For Small Entities And Federal Registration

May 20, 2026 07:02 am 0 Comments CATEGORY: Regulation & Compliance

An important (albeit time-consuming) part of running an RIA is fulfilling the compliance obligations required by the firm's regulator(s). Currently, firms with at least $100M of regulatory Assets Under Management (AUM) or that would be required to register with at least 15 states typically must register with and be overseen by the Securities and Exchange Commission (SEC), while other (smaller) firms are regulated by their home state, plus in most cases any additional state(s) in which they have at least 5 clients. However, the proportion of RIAs meeting the threshold for SEC registration has steadily increased over the years, owing to both the overall growth of the RIA model, and the development of technology allowing RIAs to scale up faster (even as they remain relatively "small" businesses, with even most SEC-registered RIAs employing only a handful of team members and managing 'just' a few hundred million in assets, both of which pale in comparison to the small number of mega-RIAs and asset managers that dominate most of the industry's AUM).

Amid this backdrop, the SEC is considering a pair of changes that would change the regulatory landscape for many RIAs.

First, the SEC has issued a proposed amendment that would change the definition of a "small entity" RIA for purposes of the Regulatory Flexibility Act of 1980 (which is designed to prevent rules and regulations from creating an undue regulatory burden on small businesses) from $25M of AUM to $1B of AUM (while also considering using a revenue- or employee headcount-based threshold in lieu of an AUM-based threshold). A new threshold of $1B of AUM would increase the number of SEC-registered RIAs that qualify as "small entities" from just 3% today up to 75% (though those 75% would still only account for 3% of all RIA-managed assets given the concentration of assets in a few mega-firms!). And so if the proposed amendment is adopted (as appears likely, given fairly broad support expressed during the proposal's comment period), the pace of SEC rulemaking would likely slow down as it would have to more carefully consider and weigh the potential impact of proposed new rules on a drastically increased number of "small entities" it oversees – likely providing a level of future regulatory relief for relatively smaller RIAs who don't have the revenue to support hiring dedicated compliance staff to handle increased regulatory obligations.

A separate (and not yet officially proposed) change that was nevertheless hinted at by Acting SEC Commissioner Mark Uyeda in public comments last year would also increase the regulatory AUM threshold for firms to register with the SEC from the current $100M to perhaps $1B, which would have the result of shifting thousands of currently SEC-registered firms (back) to state registration (likely with many firms needing to register in multiple states given the broader geographic distribution of clients for most firms, especially in the post-COVID virtual-meeting era). While such a change would reduce the number of RIAs under SEC oversight (potentially allowing it to focus on the largest RIAs representing the greatest systemic risk for consumers, and better aligning the number of firms the SEC must oversee with its Congressionally-limited budget), it could also significantly increase the compliance burden on many RIAs that would be forced to grapple with the complexity of multi-state registration, particularly when those states' laws and regulations don't fully line up with each other. Which could cause larger state-registered firms to flock to affiliate with SEC-registered corporate RIA platforms that could take certain compliance obligations off of their plates (or simply render them eligible for Federal rather than state registration), opting to sacrifice some of their independence to remain SEC-registered rather than struggle with increased compliance burdens under state registration.

Ultimately, the key point is that in the 15+ years since the SEC last updated its registration threshold (and nearly 30 years since the "small entity" threshold's last update), there have been enough changes in the RIA landscape – both in terms of average firm size and the number of states in which firms do business in the virtual meeting and niche client marketing era – that it makes sense to rethink how to divide between state and SEC registration. Because ironically, while most RIAs truly are "small" businesses that in aggregate comprise only a small fraction of industry AUM, it's perhaps those firms (with less capacity for handling compliance burdens) that would benefit most from following a single uniform SEC standard rather than a maze of often-conflicting state-level regulations, as well as from slower pace of rulemaking that would likely result from the proposed higher "small entity" AUM threshold. So if the SEC does eventually end up raising its registration threshold, we may expect to see a bigger push for states to further standardize their securities regulations to reduce the compliance burden on state-registered firms – or else see a flood of small- and mid-sized advisory firms affiliate with corporate RIAs to avoid state-level regulation altogether!

Attracting And Retaining HNW Clients By Being More Available For Their Multigenerational Family Needs: #FASuccess Ep 490 With Liz Miller

May 19, 2026 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome everyone! Welcome to the 490th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Liz Miller. Liz is the founder of Summit Place Financial Advisors, an RIA based in Summit, New Jersey, that oversees approximately $300 million in assets under management for 37 client families.

What's unique about Liz, though, is how she has grown her firm in part by both offering a high-touch service model for her high-net-worth clients and by serving their children and grandchildren, creating continuity for the firm as family wealth passes between generations.

In this episode, we talk in-depth about how Liz attracts her high-net-worth clients not necessarily through traditional financial planning analyses (as most of them run little risk of running out of money) but rather by ensuring that no key planning issues fall through the cracks (saving the clients time and anxiety in the process), how Liz uses checklists to show clients that her firm is on top of key planning issues and to highlight topics that have been successfully completed, and why Liz starts her discovery meetings by allowing prospects to lay out any financial concerns that are on their mind (as they might not be able to focus as well on other topics if particular pain points are bothering them).

We also talk about how Liz brings up multigenerational planning conversations starting in the prospect phase (allowing clients to decide whether they want to bring their children into the fold or have her firm reach out), how Liz balances the benefits of intra-family communication about financial issues with the privacy obligations her firm has regarding each generation’s financial situations, and how Liz cultivates relationships with the next generation at different ages (for instance, helping individuals in their 20s get off on the right foot with saving and workplace benefits or supporting those in their 30s managing financial issues related to their children), building client relationships that typically persist after they eventually inherit their parents’ wealth.

And be certain to listen to the end, where Liz shares how investing her high-net-worth clients’ assets in individual securities allows her to offer tax and expense savings compared to a fund-based approach, why Liz expects clients to continue to seek out human advisors in a world of growing AI capabilities given human advisors’ ability to physically ‘be there’ for clients facing complex planning issues that require communication with multiple professionals, and how Liz has found significant benefits from participating in professional organizations (including serving as chair of CFP Board), both in terms of building a strong professional network and to help advance the financial planning industry as a whole.

So, whether you’re interested in learning about providing more effective multigenerational services, building the trust of high-net-worth prospects and clients by not letting tasks slip through the cracks, or the benefits of participating in financial planning organizations, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Liz Miller.

Generating More Unsolicited Referrals That Actually Turn Into Good-Fit Clients

May 18, 2026 07:02 am 0 Comments CATEGORY: Marketing

When a financial advisory client makes a referral to their advisor, all parties can benefit: the referrer is able to connect a friend or family member with a high-quality financial advisor, the referred individual receives a valuable personal recommendation to a professional who could have a major impact on their life, and the advisor receives an introduction to an individual who could become a long-time client (and refer others as well!). However, some advisors are hesitant to actively solicit client referrals for fear of potential awkwardness or even hurting a relationship with a client.

In this guest post, relationship marketing expert Bill Cates discusses how financial advisors can get more 'unsolicited' referrals from clients (though this process is by no means 'passive') and increase the chances that those who are referred would make good-fit clients.

To start, clients tend to make more referrals when they feel strongly about the value they're receiving from their advisors. Notably, there are opportunities to learn from both prospects and clients about what part of the advisor's value proposition sticks out to them. For instance, an advisor might ask a new client what 'tipped the scales' in their decision to move forward or ask an existing client during a review meeting what they like about their working relationship with the advisor.

In addition, clients are more likely to become advocates for their advisors when they experience a transformation as a result of financial planning. For instance, through cash flow management, an advisor might be able to show their client that they can do and have things they previously thought weren't possible.

Further, advisors can be proactive in educating clients to increase the chances of receiving good-fit referrals. For instance, letting clients know who the advisor serves best or for whom the advisor's processes are best suited can lead to better-fit matches (also, having a client niche and/or ideal client persona can make it even clearer to clients who the advisor serves best).

While an advisor might be hesitant to directly ask for a referral they can still plant referral 'seeds' in a less direct manner. For example, they might encourage clients to "share the experience" or (particularly if the advisor has a sense of humor) tell a client "don't keep me a secret". Also, to relieve potential concerns clients might have about making a referral, the advisor could assure clients that they will handle their (and the referred individual's) information confidentially and that referrals work best with a warm introduction (e.g., an email "handshake" from the client connecting the referred individual with the advisor and letting each party know a little more about the other).

Ultimately, the key point is that because client referrals can be a powerful source of organic growth for advisory firms, taking the time to discuss the value clients are receiving, finding opportunities for client 'transformations', and educating current clients on the types of individuals the advisor serves best can be worthwhile investments that result in more high-quality introductions (while reducing potential awkwardness in the process!).

65 percent of high-net-worth clients prefer to meet their advisor via referral. Without a reliable process to generate those referrals that turn into connections, advisors could be missing out on qualified prospects. However, many advisors are hesitant to ask for referrals, instead hoping current clients refer their connections unsolicited. The question becomes, how can advisors increase the chances of receiving unsolicited referrals?

Unsolicited referrals happen because an advisor has become super referable. The client experience and the client-advisor relationship has to become remarkable, i.e., worthy of remark.

Unsolicited referrals that turn into introductions and connections happen because of the advisor : how they intentionally build advocacy based on the principle of borrowed trust. (You borrow the trust in one relationship long enough to earn your own. You ' repay ' that borrowed trust by taking great care of your new relationship.)

Some advisors have intentional processes that lead to referrals without asking. Too many advisors wing it when it comes to referrals. I'm here to tell you that wishing and hoping is not a plan.