Ep 389: Generating $5M In Hourly Planning Fees In The Blue Ocean Of Consumer Demand with Mark Berg

Financial Advisor Success

Michael Kitces

News, Business, Entrepreneurship, Business News

4.8 • 696 Ratings

🗓️ 11 June 2024

⏱️ 90 minutes

🔗️ Recording | iTunes | RSS

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Summary

Mark Berg is the Founder of Timothy Financial Counsel, an RIA based out of Illinois that's on track to generate $5 million in annual revenue this year serving 800 households. Mark's firm stands out for its rapid growth, scaling from $1.8 million to $5 million in revenue within just six years while maintaining a 25% profit margin, achieved entirely through an hourly fee model.

Listen in as Mark shares how he structured his firm to succeed with an hourly fee model, his strategic implementation of time-tracking software for efficient billing and capacity management, and how he uses a client waitlist to handle increasing demand. We also discuss Mark’s innovative approach to scaling the firm by hiring a president without a financial planning background, as well as why he sees the hourly fee model as a vast opportunity for reaching a broader client base.

For show notes and more visit: https://www.kitces.com/389

Transcript

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0:00.0	Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with
0:07.1	financial planner, speaker, and consultant Michael Kitsis to hear stories of how leading
0:12.4	financial advisors navigated the inevitable challenges that arise on the path to success
0:17.4	and get insight from leading industry consultants about how to break through to the next
0:22.2	level in your advisory business. And now here's your host, Michael Kitsis. Welcome, everyone.
0:28.9	Welcome to the 308-9th episode of the Financial Advisor Success Podcast. My guest on today's
0:34.3	podcast is Mark Berg. Mark is the founder of Timothy Financial Council,
0:38.4	an R.A. based in Wheaton, Illinois, that's on track to generate approximately 5 million in annual
0:43.1	revenue this year serving 800 client households. What's unique about Mark, though, is how his firm has
0:48.4	scaled from 1.8 million of revenue to 5 million in only 6 years and has maintained a 25% profit margin,
0:55.4	all while serving clients by exclusively using an hourly fee model. In this episode, we talk in
1:01.9	depth about how Mark created a structured process to serve clients under the hourly model, including
1:06.6	segmenting client engagements into five levels based on the complexity of their needs to match them with the right advisor in the firm.
1:13.4	How Mark's firm uses those levels to then provide accurate quotes for how many hours it will take to meet a client's planning needs in the very first prospecting call.
1:21.3	And why Mark thinks that proper pricing is the key to success using the hourly model with his firm charging either 350 to 450 an hour
1:28.5	depending on the seniority of the advisor assigned. We also talk about how Mark's firm attracts
1:34.5	both through referrals from current clients and from other financial advisors who need to refer
1:39.4	prospects who don't meet their asset minimums or whose planning needs to don't match their own
1:43.4	expertise.
1:49.9	My Mark created a wait list to manage his and his staff's capacity amidst a wave of interest from prospective clients after realizing that this wave of interest could be a new normal that
1:54.8	he could have just assumed was temporary and would pass. And how Mark uses time tracking software
1:59.7	not only to accurately and efficiently build clients,
	...

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