Morningstar - Summer 2019 - 95

all conflicts of interest and be transparent.
Instead of levying fees based on assets under
management, Bruns charges a flat fee. That
removes the conflict in wanting to steer as many
assets under his own umbrella to maximize
fees. "It's our job to go figure out what you should
do, and we're going to bill you for it. And it's
going to be based on the number of hours we
work. That's a core of what we do."
Bruns became interested in the financial industry
in college, during the dot-com bubble. He was
amazed by how so many people put their life
savings on the line, buying and selling technology
stocks of companies they knew nothing about.
After graduating from Millikin University in Decatur,
Ill., in 2001, he worked for a year as an investment representative at Edward Jones, then moved
to a large bank, where he served for 10 years.
Yet at the bank, he found the sales and
commission culture at odds with what was best for

Randy Bruns, CFP, senior financial planner and
founder, Model Wealth.
How he caught our eye: Bruns conducts pro
bono financial planning sessions with individuals
throughout the Chicago area.
Career path: Worked his first year out of college
at Edward Jones, then the next decade at
a large bank, then struck out on his own as a
Certified Financial Planner in 2012.
Personal: Lives in Wheaton, Ill., with his wife,
Natalie, and daughter, Nora, 2, and son,
Ben, almost 1. Runs 5Ks and likes to mountain
bike and go on long walks with his Australian
shepherds, Dash and Daisy.
Favorite funds: Index funds and funds with low
turnover and expenses, in fund families such
as Vanguard, Dodge & Cox, and American Funds.

the customer. Many advisors there pushed fee-rich
instruments such as annuities, which Bruns
saw as toxic for portfolios but generated as much
as seven times in commissions compared
with mutual funds. Bruns felt the pressure. He left
in 2012 a few months after obtaining his CFP
designation and started Model Wealth, where he
could chart his own course.
That included avoiding the typical feeonly structure based on AUM, part of a growing
trend. "I'm not going to move the needle
by myself, but there is a growing number of
financial planners out there that want to
put forth the single best experience consumers
can get," Bruns says.
That means Model Wealth doesn't need assets
to give advice. About half of Bruns' clients
hold their assets elsewhere, and they pay by the
hour for project work and periodic checkups. He
charges $300 per hour, so a typical new client
typically takes about 15 hours to set everything up
for $4,500. This group receives biannual or
annual checkups, typically paying $600 to $1,500,
depending on planning needs. For more complex
work, Bruns also offers flat fees of $5,000 to
$10,000 so clients don't feel like the clock is ticking
by the hour.
Get the Market Return
The simple part to Bruns' investing derives
from the philosophy that few investors beat the
markets over the long term. "We believe it's
our job to help our clients get the market return,
or as close to it, with as little headwinds as
possible," he says. "And we don't make ourselves
out to be anything fancier than that. But we would
argue that's a very highly effective endeavor."

Bruns uses total market index funds and
active funds that have low turnover and low
expenses. He likes fund families such
as Vanguard and Dodge & Cox, and American
Funds without the sales load.
By keeping fees modest, there's no pressure to
overthink portfolios, he says. Some portfolios have
as little as five mutual funds. "I think a lot of
financial advisors feel a need to overcomplicate it,"
he says. "We don't hang our hat on trying to do

anything brilliant with the portfolio, because we
think the brilliance is keeping it simple and helping
people get the market return."
He spreads stock and bond fund assets across
U.S., international, and emerging-markets
strategies. He uses Morningstar Advisor Workstation
to aggregate data of all of the different accounts
of clients, those from inside and outside
the firm, to monitor asset allocation, fees, expense
ratios, and exposure. "Any given day, any
given moment, we can very easily see all of the
data at a moment's notice," he says. "It is
invaluable to us as a firm because we always want
to be cognizant of what the portfolio looks like."
Growth in business has been steady. In 2016,
Bruns recruited Alex Offerman, who is now
a CFP and only 25. The firm directly manages $125
million in assets and has 200 clients. Bruns
has plans to add more planners with more clients
coming on board. Clients now come from all
over the country, and much of the consultations
occur over Skype.
Helping Others
In his mission to help others beyond his practice,
Bruns does pro bono financial planning with
underserved communities, including low-income
earners, minorities, seniors, and veterans. He also
sees people with income but little in assets.
When he started in 2012 with the free counseling,
the level of financial ignorance was eye-opening.
"That's when I really got to see the lack of financial
literacy of the average American," he says.

As president of the Financial Planning Association
of Illinois, he recruits other financial planners
to do pro bono work, and he gives talks in
coordination with institutions such as the Federal
Reserve Bank of Chicago and the Chicago
Public Library. "Individuals can come in and get
answers from somebody who doesn't have
a profit motive," he says.
But when it does come to profits, Bruns' approach
has appeal. "We are working on projects
every day and every week for people who hire us,
and we are purely independent." K
Charles Keenan is a freelance financial journalist.

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Morningstar - Summer 2019

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