The Client Comes First

One practical way they’re striving to emphasize relationships over returns is by charging a retainer fee, rather than a fee based on assets under management. It’s a little misleading, since the new retainer fee is based to some extent on–surprise!–assets under management. But Evensky says it helps to underscore the client’s focus. “We were telling them, ‘Don’t think about short-term returns,’ and then we were billing them based on what happened during the last quarter,” he says. “That doesn’t make any sense.” To make signing on with the firm less hassle, the firm has also abandoned the idea of having all client assets with a single custodian. “In the past, in order to work with us, a client might have had to liquidate his assets and move them to one of the custodians we were working with; now, we have clients with portions of their assets at Fidelity, Schwab, trust companies, or wirehouses,” says Evensky. “Far from using one custodian, we’re actually moving to using many.”

Despite the emphasis on client relationships, neither planner likes the concept of life planning, a relatively recent trend in the planning world. “All the talk about ‘life planning’”–you can hear the quotation marks in his voice–”leaves me nonplussed,” says Evensky. “We don’t tell the head of a law firm who’s working 80 hours a week that he’s unhappy; I work 80 hours a week, and I’m not unhappy. Deena and I listen, and we help clients think through what they’re doing–whether or not those decisions have to do with the finances we’re managing–and we help them brainstorm about their businesses or the future. But we consider that traditional financial planning.”