Morningstar Advisor - December/January 2010 - 14

Advisor Profile It’s All About the Plan By Ilana Polyak Unbundling financial planning from investment management (with a big dose of the warm fuzzies) has paid off for this firm. For financial planners, asset-gathering is largely seen as the way to grow a business. The more assets, the more fees advisors collect, so it benefits an advisor if a client brings over all of his or her accounts. But Juli Erhart-Graves, president of Worley Erhart-Graves Financial Advisors in Indianapolis, and her partner, Grace Worley, have been using a different model. They levy an hourly fee for financial-planning services, separating the duties of financial planning and investment management. “Not everyone needs someone to manage their portfolio, but they might want someone to tell them that they’re on the right track,” Erhart-Graves says. When working with a new client, Erhart-Graves and Worley first come up with a financial plan, never assuming that assets will follow. Only about half of the firm’s 700 or so clients use the firm’s investment-management expertise. Investments have their own fee schedule. “If we’re working with someone and they decide to use our investment-management services, then we’ll bill hourly for the financial plan and then as a percentage of assets under management as soon as we start doing investment management,” Erhart-Graves says. Working this way, she says, gives her firm a wider view of her clients’ financial lives and an ability to make a wide array of recommendations, including what to do with workplace 401(k)s, insurance, and health-care needs, areas that advisors working on an AUM basis sometimes do not see as their purview. To be sure, Erhart-Graves would be pleased to see more assets come her way. But she is content to build client relationships around financial planning before the assets follow. “We encourage annual reviews with our clients,” she says. “So the following year, we’ll meet with someone to review their portfolio, and that’s when they might say, ‘What about you guys implementing some of the recommendations you’ve made so I don’t have to?’” The Warm Fuzzies graduated, she was 6 years old. It was really hard to balance both.” Upon graduation in 2000, Erhart-Graves tried mutual fund analysis, but it wasn’t where her heart was. She worked as a senior investment advisor for Conseco Capital Management, analyzing individual stock holdings in the firm’s mutual funds, and began studying for the Chartered Financial Analyst exam. Eighteen months into the job, she had lunch with Worley, who suggested she come back to work for her, this time as a planner with her own clients. “I so missed working with clients,” ErhartGraves says. “At that firm, I was just one sliver of the pie. I never got the warm fuzzies you get when you help someone plan their financial lives,” she says. In February 2008, Erhart-Graves purchased the firm as part of Worley’s succession plan. “Grace is now my employee,” she says. Erhart-Graves is no stranger to relationship building. She started at the firm in 1995, when she was hired as an office manager, and she worked full time and attended college part time. She developed a strong working relationship with Worley, so much so that she focused her studies at Indiana University on business with an emphasis on finance. In between, she also cared for an infant daughter. “When I started going to college, my daughter was 3 months old,” she says. “When I Smooth Transition As Worley has scaled back her schedule to just two days a week, Erhart-Graves has taken on more clients, though Worley continues to service her clients. “I’ve been with Grace for so long that most of her clients already know me,” Erhart-Graves says. “We’ll stick with this arrangement for the next few years, but 14 Morningstar Advisor December/January 2010

Morningstar Advisor - December/January 2010

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