A Retirement Planner Raised Her Fees. The Result: Wealthier Clients, More Growth

Pricing decisions can be a super-challenging aspect of running an independent advisory — especially, it seems, for female advisors, notable for underpricing their services. For certified financial planner Dana Anspach, the choice was clear: Either raise prices or go out of business.

When she did increase them five years ago, one of her planners began to weep: “She was sure we’d never get clients again. But this has been nothing but positive and made a huge difference. We’ve experienced substantial growth,” Anspach tells ThinkAdvisor in an interview.

A specialist in helping pre-retirees and retirees, the 25-year industry veteran, 49, credits her success in large part to a process she created centered on three client “retirement readiness tests.” She explains them in the interview.

Anspach’s RIA, Sensible Money, is based in Scottsdale, Arizona, where she and her team of six planners manage $250 million in assets for clients 55 and older in 26 states.

A number of them have transferred their accounts from large firms such as Wells Fargo and JPMorgan; other Anspach clients were employed by Fidelity before retiring.

She herself is no fan of wirehouse ways. As an FA with Merrill Lynch, she was dismayed to find it “a culture of sales.” That didn’t sync with her approach, and she exited the firm after only 2 1/2 years.

Armed with a bachelor of science in marketing from the University of Florida, she used her promotion and advertising savvy to help build a practice. That included coming up with a catchy slogan, “Start Squeezin’” — which she discusses in the interview — and displaying her retirement planning expertise on the internet by writing articles for About.com and MarketWatch, among others.

Then she authored a couple of books: “Control Your Retirement Destiny” (2nd edition-2016) and “Social Security Sense” (2016).

Early next year, The Great Courses will release her latest production, an audio-video-print course in “How to Plan the Perfect Retirement.”

Amid the pandemic, much of Anspach’s advice to clients is to stop focusing on “the here and now” — market volatility and coronavirus — and instead, look ahead five to 10 years by following the long-term financial plan she’d crafted for them.

The investment advisor, who holds the Retirement Management Advisor designation, started out in 1995 as a trainee with Waddell and Reed. Later, after leaving Merrill Lynch, she joined a CPA firm, within which she began building a financial advisory practice.

After five years, she bought the practice and merged it with another firm. In 2011, she went solo with Sensible Money.

ThinkAdvisor recently interviewed the Iowa-born Anspach, who was on the phone from Scottsdale. She talked about what retirees really want from their advisors and revealed a few of her favorite advertising outlets, such as Kiplinger.com and Facebook, which serve to funnel prospects to her website. The four to six retirement planning webinars she holds every year attract lots of FAs in addition to clients and prospects.

Here are highlights of our conversation:

THINKADVISOR: As a woman advisor in male-dominated financial services, have you met any resistance?

DANA ANSPACH: I haven’t experienced that. The only challenge I’ve encountered is a common one with women: They underprice their services. We realized that we either had to increase our pricing or we wouldn’t be profitable and would go out of business.

How did you proceed?

In around 2014, we did an analysis and found that we were significantly underpricing relative to other firms that specialize in retirement income planning and relative to the time it takes for tax planning. So in 2015, I said we would fairly price the way any other firm would.

Did you get pushback about the higher pricing?

No. But one of our advisors started crying when we announced our pricing change. She was sure we’d never get clients again. Instead, we’ve acquired higher quality clients and higher net worth clients. This has been nothing but positive for us. It’s made a huge difference. We’ve experienced substantial growth.

During the coronavirus pandemic, what’s the hardest thing about investing for your clients to get their heads around?

People have this overwhelming sense that this time is different and that they can decide what direction the market is going in. They think they need to do something with their money to protect it, like change their allocation or go to cash. They want to protect against a second decline or the upcoming election or a prolonged depression.

How does that strike you?

Well, if they’re sure the market is going back down and want to move to cash, that’s a bet versus following a long-term plan.

So what do you tell them?

Our underlying approach is that you shouldn’t change your investment allocation unless your goals and cash-flow needs have substantially changed. So we get people out of the here-and-now and to think instead in terms of five or 10 years out.

How do you do that?

The portion of our clients who are already retired — at least half — are well structured to weather this [storm]. They typically have five to eight years before we would have to sell any stocks. So we remind them that they don’t need to tap the stock in their portfolio for a long time. It’s: Let’s look four, five, six years out. Do we think the market will be higher than it is today?

How about your clients that are still working?

That’s different. They’re worried about an early layoff or the riskiness of their employment situation. For them, we want to start building up more cash reserve and be a little more conservative because they might need to use some of their portfolio much earlier than we had anticipated. But none of our clients have lost their job so far.

How does having the Retirement Management Advisor designation (RMA) help in working with your clients?

It helps with a way of thinking. As people near retirement, a shift occurs: They want to protect what they have and are less focused on maximizing returns. They’re more focused on creating a certain outcome. The RMA program is designed around that shift: The way you learn to look at things is so different from how most advisors were trained.

How do you mean?

We were trained on accumulation and risk vs. return, but that’s just not what most people are concerned about when they’re getting ready to retire.

You use Social Security benefits as a longevity hedge. Please explain.

Many people look at one of the [retirement planning] decisions as: “I could earn a slightly higher rate of return by investing and claiming Social Security early.” But in retirement, we face some unique risks. One is the unknown of how long we’ll live. Social Security helps hedge that risk.

How?

If you claim later, you get more [in monthly benefits], and they’re inflation adjusted. So if you live long, that will be far more beneficial than claiming Social Security early and the possible investment returns you could earn for those four or eight years while you were getting the benefits.

Your branding slogan is “Start Squeezin’”: The right retirement planning decisions can help get more “juice” in your cup. You say that typically, extra “juice” gets tossed out in high taxes, incorrect planning assumptions and more. You help make that juice flow in the opposite direction. How?

Every client starts with a “juicing plan” in which we run through a series of three strategy meetings with retirement readiness tests: a Monte Carlo simulation, a “fundedness” analysis [sufficient assets to fund cash flow] and an historical audit.

When does investing come in?

No one can move into investment management services with us until they’ve gone through that planning process. About 70% of clients then hire us to also manage their portfolio.

You were an FA with Merrill Lynch for about 2 1/2 years. How did you like working there?

The wirehouse definitely was not for me. Merrill Lynch had a culture of sales. That culture wasn’t for me. In 2001, I moved to Arizona and went to work for a CPA firm, Hopkins Parker, and started building a financial services practice within it.

To what do you attribute your business’s robust growth?

We specialize in a particular type of retirement income planning that uses a very conservative set of assumptions. The bulk of our clients, who have between $1 million and $5 million in investable assets, don’t want to rely on a trading strategy. We’re applying our stress tests to their plan and looking at decisions around Social Security, pensions, deferred comp plans and taxes. It’s this level of detail that we’re looking at.

Your firm’s logo features pair of eyeglasses. Why did you choose that design?

One, our clients are typically at the eyeglass-wearing stage; and two, it signifies that deeper look. You’re taking an up-close look at all the details — and that is truly what we do.

Amid the pandemic, how have things been going on a personal level?

My fiancé and I bought into a fitness franchise last year and opened in October. It’s been nothing but a nightmare because [in Arizona] we were able to reopen for six weeks, but then we had to close. We just don’t see how the business can make it because that can easily happen again in the fall. Even if they allow us to reopen in another few weeks, what happens in October or November, when we have a combined flu and coronavirus season?

When I interviewed you seven years ago for Research magazine, you were riding three motocross dirt bikes despite having suffered a bad wreck six years before. Are you still riding bikes?

Yes. Now I ride a Harley Softail Slim. I’m brave! I love it. It’s too hot right now; but in the fall and all winter long, I’ll be riding here in Arizona.

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