Ep 094: Crafting Your Optimal Solo Practice By Simply Charging What You're Worth with James Osborne
Financial Advisor Success
Michael Kitces
4.8 • 696 Ratings
🗓️ 16 October 2018
⏱️ 101 minutes
🧾️ Download transcript
Summary
Today’s guest has built a high-margin solo practice with quite an unusual structure. The founder of Bason Asset Management, James Osborne grew his advisory firm to over $225 million of AUM and nearly $400,000 of revenue by charging his clients a simple flat fee of $4,800—regardless of their assets. And he managed to do so by the age of thirty-five.
In this episode, James shares why he decided not to follow the traditional AUM model, as well as the benefits of his flat-fee approach. Listen in to learn why he chose to build a business model that fits his personal lifestyle and family goals, why he isn’t working to gain more clients and hire staff, and what he plans to do in order to maintain his high-income lifestyle practice once he reaches his personal capacity.
For show notes and more visit: https://www.kitces.com/94
Transcript
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| 0:00.0 | Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with |
| 0:07.2 | financial planner, speaker, and consultant Michael Kitsis to hear stories of how leading financial |
| 0:13.0 | advisors navigated the inevitable challenges that arise on the path to success and get insight |
| 0:18.7 | from leading industry consultants about how to break through to the |
| 0:22.1 | next level in your advisory business. And now here's your host, Michael Kitsis. Welcome, everyone. |
| 0:28.4 | Welcome to the 94th episode of the Financial Advisor Success podcast. My guest in today's podcast is |
| 0:34.4 | James Osborne. James is the founder of Basin Asset Management, a solo advisory |
| 0:39.0 | firm based in the Denver suburbs that oversees more than 225 million of assets under management. |
| 0:44.7 | What's unique about James, though, is the unusual way that he structured his advisory business, |
| 0:50.2 | with a simple flat fee of $4,800 per client, regardless of their assets, which has allowed him to build a high margin solo practice with just 80 clients generating nearly $400,000 of revenue for the firm at the age of just 35 years old. |
| 1:05.7 | In this episode, we talk in depth about why James decided to structure his firm using this flat fee approach in lieu |
| 1:12.5 | of the AUM model, how the design of his business model makes it possible for him to generate a target |
| 1:17.6 | of his exact income potential as he reaches client capacity. The way he handles situations where his |
| 1:23.2 | flat fee would be substantially lower than what another advisor's AUM fee might be for prospective clients |
| 1:28.6 | with a lot of assets and net worth. And the reason that he chose to deliberately build a business |
| 1:33.5 | model that fits his personal lifestyle and family goals. We also talk about what it really means |
| 1:39.6 | to reach personal capacity as a financial advisor. The challenging tradeoffs that start to emerge as advisory |
| 1:45.4 | firms try to grow beyond the individual capacity of the founder. Why it is that beyond a certain |
| 1:50.6 | point, doubling the number of clients and revenue of the practice has almost no impact on the |
| 1:54.8 | take-home compensation of an advisor. And the reason that so many solo advisory firms will actually |
| 2:00.5 | generate far more value for their founders |
| 2:02.3 | by staying small even if the practice is never sold. And be certain to listen to the end, |
... |
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