Financial Planning: Why You Should Work With a Small Firm

Seth Godin’s blog post today is about the Economies of Small, and as usual he hits it out of the park.  There are industries where economies of scale still help businesses produce more or a higher quality of product, but those are fewer than ever.

Financial Planning doesn’t scale.

Bigger firms have argued for years that you should want the big name.  You’ll get more access, better research, and more resources.  You’ll get access to “exclusive products” that always seem to have the name of the firm on the fund, don’t they?

Yet how did all of those supposed advantages benefit them during the downturns in 2000 and 2008?  The internet has democratized Financial Planning as it has so many other industries.  Information is more accessible than ever.  You no longer have to work for a giant firm to have access to world-class planning tools, research, or products.

“Meaning Scales, People Don’t.”

Hugh Macleod is an artist who draws cartoons on the back of business cards, and blogs about creativity among other things.  He wrote a great book  called “Ignore Everybody” and one of the chapter titles is “Meaning Scales, People Don’t.”  I thought this was brilliant, but maybe not exactly in the way that Hugh meant.

I can only do great work for a small number of clients.  When I started my career, the firm that hired me said that the career defined was 1,000 clients.  That’s just a ludicrous number.  There’s no way I can have real relationships with 1,000 clients, no matter how much support you put around yourself.

I’ll never have more than 120 clients because I don’t ever want to be spread so thin that I won’t know what is happening in my client’s lives.  Might Upperline Financial Planning be able to serve more than 120 clients?  Sure, but only if we decide to add more great planners.  Great planners spread too thin = a diminishing amount of time for each client (and each planner too, I might add).  Meaning Scales, People Don’t.

Small Firm = Buying Local

The last reason for working with a small firm is the benefit it does for your local community.  There’s a great program in New Orleans called StayLocal, which Upperline Financial Planning is proud to be a part of.  The more we all support each other as local businesses, the more sustainable our local business community, the more impact we can have on local decision making, and the more we can protect the unique cultures that have nurtured us.  See StayLocal’s great list of reasons to shop local for more reasons.

Smaller firms are likely to be more well versed in community issues regarding taxes and incentive programs.  They also support other small businesses such as printers and web design firms instead of large firms with corporate buying programs.

Give a small firm a chance.  You’ll support a local entrepreneur, your community, and end up with a better experience in the long run.