Playing the Long Game

Michael Branham, The Planning Center

By Kevin Adler

By its very nature, financial planning is a long-term activity. The entire point is to help clients define their goals, assess the resources available to achieve their goals, and help them move along their chosen path over years or decades.

At The Planning Center, that approach defines not only the working relationship with clients but also how the firm thinks about its future, says Michael Branham, CFP^®, a shareholder and senior financial planner. It’s all about longevity and sustainability, as stated in the firm’s vision statement: “Fifty years from now, there will be a different generation of the family meeting with a different generation of planner talking about the same money.”

What this means, Branham says, is that the firm will serve ongoing generations of clients by creating an organization that will last beyond current owners. Knowing that their advisors will be around for as long as they are needed, clients have “a safe place to talk about life and money.”

In the case of The Planning Center, a succession plan isn’t just a plan—it’s already been implemented. Branham is one of 11 second-generation shareholders in the firm, which was started in 1998 by Marty Kurtz. Kurtz has retired, but his two early partners, Matt Sivertsen and Eric Kies, remain affiliated with the firm.

The firm now operates six offices, including the Anchorage, Alaska, location that Branham manages (see text box below). Its 26 staff members serve almost 900 clients and manage nearly $1 billion.

Mapmaker or Guide?

“We really focus on working with clients in long, ongoing relationships,” says Branham. The firm does not provide what he calls “module” planning of just investment advice or a one-time review of a retirement plan.

When talking about the firm’s approach, Branham’s favorite analogy is comparing a mapmaker and a guide. “We are not a mapmaker—that’s someone who would come up with information on the landscape and give you a map to follow. We are more than that; we are a guide. We help you on your path,” he says.

There’s nothing wrong with mapmakers and the do-it-yourselfer (DIYer) clients they might serve, Branham says; they just aren’t ideal clients for The Planning Center. “DIYers tend not to want to pay us to take them on the way,” he says. “But life happens along the way. What I tell you is reasonable today will be entirely different tomorrow, and I want to be your guide for opportunities in your life, as well as challenges.”

To maintain those relationships, Branham meets with each client two or three times per year. When unexpected issues come up, he’ll schedule a quick additional session. “We try to stay on top of big decisions and help people navigate those waters,” he says.

One of the ways The Planning Center aligns its interests with clients’ is through its compensation structure. It uses a retainer model rather than hourly or asset-based fees. “We think it eliminates more potential conflicts of interest than other models, and it balances growing their long-term wealth and managing their short-term cash flow,” he says.

The retainer is based on a client’s net worth, including home equity and 401(k) retirement accounts that the firm might not manage directly. “The retainer allows us to have unconflicted conversations on topics like ‘Should I pay off my house?’ As a net worth advisor, there’s no difference in the balance sheet,” Branham says. “Same with leaving money in a 401(k) when leaving employment; if that’s the right thing to do instead of transferring to an IRA that we manage, then that’s the advice we give.”

Using retainers tends to make the firm’s fee structure especially transparent. “We’ll go into a meeting and say that our fee is $10,000 for the year,” Branham says. That can be a shock for a client who’s been charged an AUM fee or been told by a brokerage firm that its services are “free.” But that transparency often leads to a discussion about the services the firm provides and the value it brings for clients, which helps to set up that desired long-term relationship.

In addition, the firm believes its approach resonates with clients because it provides cost certainty. “Our fee doesn’t change every quarter as the market goes up and down,” Branham says. Furthermore, The Planning Center doesn’t adjust the retainer annually but usually about every three years. “We have good conversations with clients about the reset of the fee,” he says. “It’s another time when we explain what benefits we provide.”

Human Capital

Clients receive a full range of Fee-Only services: cash flow management, investments, insurance and benefits review, tax planning, philanthropic planning, and more. “I’m the main point of contact; clients meet with me,” Branham explains. “Our operations team members provide support, such as with forms and documents. And I call on in-house experts, such as CPAs, for tax planning.”

With CPAs onboard, the firm provides tax preparation services. When advising a client, for example, on executive compensation, “having a bona fide CPA to navigate those waters is the responsible way to go about it,” he says. “We look at the value proposition of our relationship, and having tax experts is tangible—clients can see it.”

Just as clients are pleased with tax services, the CPAs seem to enjoy the work environment. “We think we have a real quality of life advantage over a traditional CPA firm,” Branham says. Outside the stressful tax season, they are able to do financial planning-related work, such as analyzing Roth conversions or funding a donor-advised fund. “It’s not always easy to find a CPA who wants to make the jump out of a firm where a partnership looms, but those who do really appreciate the work we do here,” he says.

Adding staff expertise and building the skills of existing staff—thus providing paths to career success—is at the heart of The Planning Center’s plan to be in business for many generations. “Human capital is at the heart of our mission and vision,” he says. “It’s not entirely unique in financial planning—a lot of firms might tell you the same thing. But it’s really important, especially today with talk of commoditization and artificial intelligence, to keep that human element.”

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Journey to Alaska Minnesota born and raised, Michael Branham started college in Fairbanks, Alaska. Though he transferred to the University of Minnesota to continue his undergraduate education, Alaska was never far from his thoughts. “I loved my time there, took trips to Alaska, and kept up with many friends,” he says. He also mentioned his love of “the last frontier” to friends and colleagues, and this eventually led to an unusual mid-career opportunity. Branham served on the Financial Planning Association’s (FPA) board in 2009 with The Planning Center founder Marty Kurtz and developed a friendship with him over the next half-dozen years when they both held leadership positions at FPA. “In 2015, Marty told me he was in talks to buy a firm in Anchorage from a friend of his, Nancy Blunck,” Branham says. “She was looking for a succession plan with a planner who appreciated Alaska and was interested in serving clients there. He asked if I wanted to pursue this opportunity.” Though Branham was happy at the firm where he was working, the lure of the North was strong. He and Kurtz agreed that he’d join The Planning Center and take over the Anchorage operation. But there was a twist: Branham was not willing to fully relocate to Anchorage until his kids graduated high school in the Minneapolis-Saint Paul area. For the next several years, Branham commuted eight or ten times annually between Anchorage and Minneapolis. Around the time Branham switched firms, he also joined NAPFA. But he was familiar with NAPFA’s leadership already because he was one of FPA’s representatives on the Financial Planning Coalition (FPC). “The FPC really coalesced around the fiduciary standard conceptually and that it needs to be applied evenly across the profession. We can debate whether we reached that point, but all three groups were strongly committed to that.” In 2021, Branham and his wife moved full-time to Alaska, where he continues to build the client base. “We’re 3,000 miles away from friends and family—and that can be hard,” he says. “But we love it up here. We love all of the opportunities Alaska affords to be active.” As for clients, Branham says Alaskans can be a different bunch. “Alaskans are incredibly independent. All clients need to build trust to delegate, and I think the population in Alaska is still learning to do that,” he says. Paying for any type of advice can be a relatively unfamiliar concept for people who have to rely on themselves in an isolated environment, he says. “There are a lot of really bright, independent people who like to tinker and figure things out. So I talk to them about whether this [personal finances] is something they want to tinker on or not.”

 

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The Planning Center

Location: Six offices, including Anchorage, Alaska, which is run by Michael Branham

Website: ThePlanningCenter.com 

Year founded: 1998 

Number of staff: 26 

Number of clients: 889 

Total assets under management: $994 million 

Typical clients and their needs: Successful individuals or couples who are looking for a guide and coach to help them make the most of the one financial life they have. They appreciate an objective third party and a collaborative approach. 

Investment strategy and methods: Strategic asset allocation using a passive investment strategy, primarily through Dimensional Fund Advisors. 

Favorite financial planning websites or apps: MoneyGuide Pro, First Step Cash Management System, and other software in the firm’s tech stack. 

Favorite nonfinancial planning websites: Social media apps and AllTrails.com 

Advice to other advisors: “Surround yourself with smart and active colleagues and mentors (both professionally and personally) to maximize your own personal growth and potential. The impact of others on your life is immeasurable.”