In response to recent discussions regarding developing and formalizing the advice-only financial planning model, we aim to clarify the contributions made by various pioneers in this field, including Quincy Hall, Sheryl Garrett, Allan Roth, and Harry Sit.
Early Advocates of ‘Advice Only’ and Hourly Models
In the United States, the concept of advice-only financial planning, which emphasizes providing unbiased financial guidance without the influence of product sales or asset management, has been championed by several key figures:
- Sheryl Garrett: In 2000, Garrett pioneered the hourly financial planning model through the Garrett Planning Network. Her work brought financial advice to middle-income clients who often underserved traditional advisory models. By introducing an hourly compensation structure, Garrett made objective financial planning more accessible while removing conflicts of interest associated with product commissions.
- Allan Roth: A respected financial planner and advocate for low-cost investing, Roth was instrumental in popularizing flat-fee and hourly financial planning models, particularly for DIY investors. Roth emphasized that self-directed clients could benefit from objective financial advice without the added cost of asset management or commissions. His approach helped bring attention to the value of advice-only financial planning for those who chose to implement recommendations themselves.
- Harry Sit: Sit’s platform, The Finance Buff, became known for promoting a version of the advice-only model primarily geared toward DIY clients. His adoption of Roth’s approach built upon this DIY-centric model, encouraging self-directed individuals to seek objective guidance while managing their own investments.
Quincy Hall’s Formalization of the Advice Only™ Methodology
Building upon these foundational concepts, Quincy Hall made significant strides in formalizing and expanding the advice-only approach:
- Distinct and Comprehensive Methodology: In his 2019 publication, Advice Only: A Retirement Planning Methodology & Handbook, Hall introduced the AdviceOnly™ methodology, a structured framework that delineates clear boundaries between financial planning and all other forms of compensation, including monetary and non-monetary.
The Advice Only™ methodology emphasizes:
- Compensation Structure: Advisors are remunerated solely through direct client billings, eliminating potential conflicts of interest associated with product sales or asset management and any other forms of monetary or non-monetary remuneration while going through the Advice Only™ process.
- Structured Planning Process: The methodology outlines a specific, repeatable process with clear stages, including the educational phase, and ensures that advice is objective and tailored to individual client needs throughout the process.
- Separation of Planning and Implementation: A key component of Hall’s methodology is the explicit separation between the advisory process and any discussions related to implementation. These discussions occur only after the completion of the planning phases, with the client’s consent, and with whomever they independently deem appropriate without any influences.
Sheryl Garrett’s Legacy and the Challenge of Advisor Discretion
Sheryl Garrett’s pioneering work with the hourly financial planning model significantly expanded access to objective advice, particularly for middle-income clients. In the early stages of what would later be referred to as ‘advice-only,’ her hourly model provided a flexible framework, allowing advisors to tailor services to individual client needs. This flexibility, while valuable for customization, naturally led to variations in practice as the field evolved.
Specifically, this early hourly framework allowed for:
- Advisors to determine the appropriateness of hourly services on a case-by-case basis.
- The potential for referrals and asset management discussions to occur within the broader planning process.
- The need for further clarification on non-monetary forms of compensation.
As the advice-only model matured, professionals like Quincy Hall sought to establish more structured and standardized methodologies. Hall’s AdviceOnly™ methodology introduced a clear, repeatable process designed to enhance consistency and objectivity. This included a distinct separation between the planning and implementation phases, ensuring that advice was delivered free from any potential conflicts arising from product recommendations or referrals during the planning itself.
Quincy Hall’s Advancement: Eliminating Discretion and Ensuring Consistency
Quincy Hall’s AdviceOnly™ methodology addressed this challenge directly by introducing a structured and repeatable process that removes advisor discretion, ensuring all clients receive the same high standard of service delivery.
Key advancements include:
- Consistent Client Experience: Hall’s methodology provides a standardized process that eliminates variability, ensuring that all clients experience a predictable and fiduciary-centered planning process.
- Defined Boundaries: By establishing the “Advice Only™ Planning Methodology and Process,” Hall created a formal space where advice is rendered without any forms of new financial solicitation, including monetary or non-monetary incentives.
- Clear Process from Start to Finish: Hall’s process begins with a signed advisory agreement under a PAID consultation, guiding clients through a minimum of two dedicated planning planning meetings. This structured approach ensures that advice is given from the onset and remains objective and in a fiduciary capacity the entire planning time and remains free from monetary and non-monetary influences until a client deems the plan complete.
A Step Further: Eliminating All Forms of Solicitation
Hall’s methodology is further differentiated by his uncompromising stance on eliminating all forms of solicitation, both monetary and non-monetary.
The AdviceOnly™ methodology ensures that:
- No Indirect Incentives: Advisors operating under this model are not influenced by referrals, partnerships, or indirect compensation that could create subtle conflicts of interest.
- No Cross-Selling or Upselling: Unlike other models where future engagements or upsells may be implicitly tied to the planning process, Hall’s methodology strictly prohibits any form of future solicitation during the engagement.
Broadening Access: A Model for All Advisors and Clients
Unlike earlier iterations that primarily targeted DIY clients or niche fee-only advisor segments, Hall’s methodology was designed for universal adoption. Doing so increased its usage so that more clients could access advisors following the methodology Hall wrote. It also expanded the experience levels clients could access because it allowed advisors with hands-on experience from affecting transactions in other client cases to participate.
Key distinctions include:
- Scalability Across Advisor Types: The AdviceOnly™ methodology was crafted as a repeatable, scalable process that any advisor can adopt—regardless of their client base size, target demographic, or professional background.
- Accessibility for All Client Types: Hall’s AdviceOnly™ methodology broadens the potential client base by making ‘advice-only’ planning suitable for all clients—including those who may later seek implementation assistance or additional guidance separate from the AdviceOnly™ planning engagement.
- Expanding Professional Reach: By providing a structured and standardized process, Hall’s work removed barriers that had previously restricted the adoption of ‘advice-only’ financial planning, allowing more advisors to confidently use this model while also ensuring the client receives a consistent objective experience.
Conclusion
While the principles of advice-only financial planning have been advocated by various professionals and organizations, Quincy Hall’s contribution is in the formalization and expansion of these principles into a distinct and comprehensive methodology that is:
- Repeatable and Scalable: Suitable for all advisors and client types.
- Free from Solicitation: Eliminating all forms of monetary and non-monetary solicitation, ensuring objectivity throughout the advisory process.
- Consistent for All Clients: Providing a standardized experience that eliminates advisor discretion, creating a reliable process that clients can trust.
