Ep 372: Quadrupling Revenue By Restructuring Your Business Model To Reflect Your Entire Value To Clients with Melody Townsend
Financial Advisor Success
Michael Kitces
4.8 • 696 Ratings
🗓️ 13 February 2024
⏱️ 90 minutes
🧾️ Download transcript
Summary
Melody Townsend is the President of Townsend Financial Planning, an RIA based out of Kentucky that oversees $112 million in assets under management for 160 client households. Embracing a transformative business model, Melody's strategy centered around providing a comprehensive suite of services, blending financial planning with investment management. This significant shift from a fee-based to a value-based model underpinned the firm's remarkable growth trajectory, leading to a near-million-dollar revenue stream.
Listen in as Melody shares the intricacies of her 20-year journey, detailing the pivotal transition from financial planning to a more inclusive wealth management approach, and how this strategic shift not only quadrupled the firm's revenue, but also enhanced the quality of client services. The discussion also covers the challenges of scaling a business, the importance of team building, and the evolution of Melody's role as a leader and advisor in the financial industry.
For show notes and more visit: https://www.kitces.com/372
Transcript
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| 0:00.0 | Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with financial planner, |
| 0:07.1 | speaker, and consultant Michael Kitsis to hear stories of how leading financial advisors |
| 0:12.2 | navigated the inevitable challenges that arise on the path to success and get insight |
| 0:17.3 | from leading industry consultants about how to break through to the next level in your |
| 0:21.6 | advisory business. And now here's your host, Michael Kitsis. Welcome, everyone. Welcome to the 372nd |
| 0:29.3 | episode of the Financial Advisor Success Podcast. My guest on today's podcast is Melody Townsend. |
| 0:35.4 | Melody is the president of Townsend Financial Planning, an |
| 0:38.1 | R.A. based in Lexington, Kentucky, that oversees $112 million in assets under management |
| 0:42.6 | for 160 client households. What unique about Melody, though, is how after her first |
| 0:48.1 | decade in practice, she quadrupled her revenue in the subsequent two years by restructuring |
| 0:53.1 | her business model from standalone |
| 0:54.8 | hourly engagements in project planning fees to a more holistic wealth management offering that |
| 0:59.2 | combined together the investment implementation and the financial planning for a single |
| 1:03.6 | AUM fee, which both better reflected the full value she was actually providing the clients |
| 1:08.4 | and enabled her to start to truly scale up her firm |
| 1:11.5 | and higher up so it was no longer solely dependent on her alone. In this episode, we talk in depth about |
| 1:17.6 | although Melody initially built an hourly fee only firm for its ability to serve the middle |
| 1:22.5 | market in Kentucky where she was based, she found that while it provided a lot of flexibility, |
| 1:26.6 | there were limitations to the growth and scalability the model offered when you're also responsible for |
| 1:31.6 | all the back office tasks in addition to trying to generate enough billable hours and revenue. |
| 1:36.9 | How Melody also realized that the hourly model was leading her to undercharge by not billing |
| 1:41.9 | for all the time she was spending servicing her clients and decided |
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