A couple of weeks ago I was feverishly taking down notes at Stocktoberfest East. While I filled multiple pages in my notebook (I shared most of it here), there was one quote that stood out to me more than any other; it was almost as if Howard Lindzon said it directly to me…I underlined it multiple times.
“Subscription is the new location”
That may seem like an odd quote for a financial advisor to find special, especially after getting to hear investors like Whitney Tilson speak, but hearing Howard’s love for subscription models was a welcomed dose of confirmation bias.
Netflix. Apple Music. Spotify. Hulu. Headspace. WealthFusion™
One of those may not be familiar. And honestly, I wouldn’t expect it to be, but it will be.
Well, it may not be WealthFusion™ that becomes well known to the masses, but what WealthFusion™ is will be—this is the monthly subscription model offered to young professionals at my firm, RLS Wealth Management. Hang on, hang on…don’t close your browser thinking this is an advertisement…at best, it’s a shameless plug. I highlight my firm’s subscription relationship for financial advice and investment management because I know it so well; after all, it was one of the main reasons I started my own firm.
As more young professionals (see: Millennials) begin to look for financial advice and investment management, the trend for subscription relationships will only rise.
Timing Is Right
As many young professionals begin to see their income rise, they are looking to make smart decisions with their money. The days of blowing money on late nights at the club, clothes and expensive cars are being replaced with goals of maxing out Roth IRAs, HSAs and beginning to invest for the long term. These young professionals understand pensions are a thing of the past, are unsure what Social Security might look like in the future, and appreciate the need to be self-sufficient in the future. Add in the whole F.I.R.E movement, and you have a population wanting to prepare for the future, but are unable to find true financial advice from the traditional financial planning relationship–you know the one based on how much money you have to invest.
The subscription model for financial advice fits the young professional’s needs because it is not based on how much money is invested, level of income, or other limiting factors. The only hurdle to clear is the ability to afford the monthly subscription, which tends to be much more affordable than traditional models.
Subscription Is Normal
Young professionals are used to paying for their most valued services via subscription. Television, music, fitness, food preparation and even reading are all services commonly paid for on a monthly subscription. Adding one more subscription to the budget, provided they see and experience the value from the financial advice, won’t garner a second thought.
Meets Their Needs
Subscription models will vary from advisor to advisor, so I can only speak to the services received by WealthFusion™ clients. In the subscription model at my firm, clients receive the same fundamentals of planning, investment management and service as retirees in the traditional AUM model–just in a scaled-down version. For the most part, the needs of young professionals are not as great as Baby Boomers in retirement; living within in a budget and saving for the future is much less intensive than planning and managing an income for a retiree.
So, instead of being charged for a level of service beyond the scope of a young professional’s needs, WealthFusion™ provides an annual meeting (less frequent than retirees meet), investment management that is fundamentally the same, just executed more in a more simplistic manner, and still allows for access to a financial advisor whenever needed. All of this allows for a more cost-effective relationship.
Introduction To Financial Advice
The subscription model is also a great introduction to financial advice; instead of waiting until they have accumulated enough assets to work with a financial advisor in a more traditional way, young professionals can start now and get advice in areas like budgeting, student loan management, and creating a savings plan.
I’m obviously biased; but with forward-thinking people like Howard Lindzon singing the praises of subscriptions in the future, I feel pretty good about WealthFusion™.
As I mentioned, my firm is not the only one offering a subscription model; my friends in the XY Planning Network all offer subscription models. Check out the XY Planning Network Find An Advisor page to find an advisor offering a subscription relationship who fits your style.
Warning: Explicit Version of J. Cole’s ATM
Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining to your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimer page.