Sheryl Garrett Predicts Big Demand for Fee-Only Financial Advice

The Garrett Planning Network founder leads a group of 250 peers who charge clients by the hour rather than take a percentage of income.


In a 2015 speech at AARP headquarters in Washington, President Barack Obama put fee-only financial planner Sheryl Garrett on the spot — in a good way. The founder of the Garrett Planning Network, based in Eureka Springs, Arkansas, had made the guest list thanks to her decade as an expert witness in cases that involve the selling of costly or otherwise inappropriate investment products to uninformed clients. At the event — also attended by Massachusetts Senator Elizabeth Warren and New Jersey Senator Cory Booker — Obama spoke about the need for a fiduciary, or conflict-of-interest, rule to update 40-year-old financial regulations. Asking Garrett to stand, the president praised her for a career spent promoting conflict-free financial advice.

The head of a nationwide community of fee-only financial planners, Garrett traces her interest in the field to her sophomore year in college, when she became a self-professed addict of personal finance magazines. “I read those things cover to cover and started to think that the more you learn, the better you get,” recalls Garrett, 54, who holds a BS in human resource management from Friends University in her native Kansas. “I didn’t realize then that people actually did that for a living.” Her entrepreneurial bent dates back even further: Growing up in rural Kansas in the 1960s and ’70s, she delivered newspapers on horseback. Senior Writer Frances Denmark caught up with Garrett last month at the close of her network’s 16th annual retreat.

When and why did you start your own firm, followed by a network of financial planners?

I opened Garrett Financial Planning on April Fools’ Day, 1998. I picked that day on purpose: You’ve got to have a sense of humor to be self-employed and stay sane. I started my own firm because I was passionate about delivering objective advice for regular people.

At Stepp & Garrett, the firm I had co-owned since 1995 with Kathy Stepp, my heartstrings got yanked every time we received a call from a person who was looking for objective advice at a reasonable, appropriate price for their needs. Our firm’s annual fee minimum of $4,000 ruled out most or all of middle America. I don’t believe most people need a financial planner for life or in perpetuity, and I think financial planning can be delivered at lower cost. In 2000 I started the Garrett Planning Network after receiving a lot of inquiries from other planners who liked what I was doing: hourly, fee-based financial planning. We now have about 250 members, most of whom run their own RIA firms.

Who are your clients?


I found a huge void in the middle market, the do-it-yourselfers — regardless of wealth; they could be very wealthy — beginners, middle-income and lower-middle-income people. I was not going to charge a percentage of their income. Would you pay your attorney or your dentist 5 or 10 percent of your income every year? Every other consultant in this country — lawyers, accountants, architects — is paid by the hour or by the amount of time and complexity of the project. When I opened my own firm, the phone started ringing, and it was three financial planners, all fee-only planners in Kansas City, providing me with referrals that were three quarters of my new business the first year. That is because there were just not enough planners of this type to fill the demand — and there still aren’t enough today.

How do you serve clients at the lower end of the asset size or net worth scale?

For clients who only have between $100 and $400 to spend on financial planning, we use a practice we call real-time or collaborative planning. It gets to the concept of accessibility: providing competent advice on a fiduciary level accessible to people with modest means, perhaps just starting out in their careers or marriages. The client buys into the plan because they collaborate with the adviser on it. The goal is to explain complex concepts clearly. The deliverable for the client is short and clear.

Once a mother purchased two planning sessions as a gift for her daughter and soon-to-be son-in-law, who had just gotten engaged and started their first jobs. We met, and without using complex computer models, we helped them allocate funds in their workplace retirement plans and determine what their IRS withholding should be. These are brief, intensive counseling sessions that answer focused questions. We do a kind of financial triage this way too. For example, with people experiencing financial difficulty such as not enough assets to retire on and needing concrete solutions, we dig right in and provide help quickly and efficiently.

What is the biggest issue for your network?

At our latest retreat — that’s what we term our network’s annual conference in Broomfield, Colorado — the topic that resonated most with our members and was addressed by both of our keynote speakers, William Bernstein, a principal at Eastford, Connecticut–based Efficient Frontier Advisors, and Allan Roth, founder of Wealth Logic in Colorado Springs, Colorado, was that an investment portfolio can be simple and still quite effective. Part of this is due to the products that are now available. Four mutual funds can provide diversification for portfolios that range from $20,000 to $20 million. The focus in our network is on low cost and the belief in an efficient market. That philosophy is becoming more common among our group. Many clients feel that financial services are too complex and that the industry did that on purpose.

What do you think of the new Department of Labor regulation that will require all retirement investment advisers to be fiduciaries starting in April 2017?

For the past ten years, I’ve been an expert witness in litigation on behalf of victims of nonfiduciary financial advisers. For seven of those years, I’ve been campaigning for a fiduciary standard for all financial advisers. During that time I retired from individual client work to focus on working with advisers with the aim of helping them make competent, objective advice accessible for everyone. In 2015, for the first time, we had people calling in saying, “I’m looking for a fiduciary.” They’ve been asking for hourly fee-only advice for years. I believe that in 20 years, or maybe only ten, we’re going to see hourly fee-only advice as one of the major service offerings.