The Garrett Network's Fee-Only Approach Creates Natural Partnerships Between Clients and Financial Advisors

Sheryl Garrett is the founder of the Garrett Planning Network.

The Garrett Network consists of approximately 300 financial advisors who provide services on a fee-only basis and act as fiduciaries.

Read on to understand how and why the Garrett Network seeks to make objective, competent financial planning services widely available.

Annuity Digest: Why would your everyday consumer of financial services be interested in The Garrett Network—what is the basic value proposition? 

Sheryl Garrett: The Garrett Planning Network is an international organization of fee-only financial advisors who are fiduciaries.

Annuity Digest: Can you discuss the meaning of fee-only financial advice and how it differs from fee-based financial advice?

Sheryl Garrett: Yes, there are many errors and misperceptions when it comes to fee-only financial advice.

Fee-only basically means that all compensation received by the financial advisor is paid directly by the client.  This results in transparency and objectivity. 

Fee-based financial advice, on the other hand, is very different from fee-only.  Fee-based advice is synonymous with fee and commission compensation.  In other words, the advisor can receive fees from the client as well as commission compensation from the sale of various investment and insurance products such as mortgages, life insurance, annuities, property and casualty insurance, etc.

Flat retainers, retainer fees on assets under management (AUM), project fees and hourly fees are various vehicles for rendering fee-only advice.  Fees can be broken down to hourly or hourly-based pricing. There are no minimums.  Advisors are able to offer ongoing contractual engagements if and when appropriate for their clients.

Broad access to financial services is what is most important and enabled by the fee-only model.  Clients pay little when they have relatively little going on in their financial lives, and pay more when life events explode. 

With a fee-only advisor, clients have access to an objective sounding board for second opinions on product transactions.  For example, a client could pay an hourly fee to simply review or receive a “second opinion” on a life insurance recommendation.  Similar to the field of medicine, access to objective, competent financial advice is critical.  Why in the world is financial life less important than medical procedures where one would almost always get a second opinion?   

The hourly fee-only model ebbs and flows with the client’s needs and provides the ability to ratchet up and down as appropriate.  An hourly arrangement provides natural partnership incentives between the client and advisor.

The reality is that most fee-only advisors charge a retainer on assets under management.  The retainer model is alright if you want to essentially delegate all financial matters and decisions to the financial advisor.  As a fiduciary, though, it is very difficult to be all things to all people and honestly do best job for clients all the time unless you work in a firm full of diverse subject matter experts.

Annuity Digest: Are advisors obligated to serve as fiduciaries? 

Sheryl Garrett:  Yes, everyone in the Garrett Network is a registered investment advisor (RIA).

Annuity Digest: How to advisors deal with broker-dealer relationships and insurance company licensing?  

Sheryl Garrett:  There are no licensing requirements other than the uniform securities law test for IRAs (series 65).  There are no series 7 or other insurance licenses required.  In some states, however, an insurance consultant license required for rendering any insurance-related advice.  There are no broker-dealer relationships since there is no clearing or trading.  Advisors just use discounts brokers such as Scott Trade, Schwab, etc.

Annuity Digest: When was the organization started? 

Sheryl Garrett: The Garrett Network was launched in July 2000.

Annuity Digest: How many advisors are in the network?

Sheryl Garrett:  There are 300 members in the United States and 3 international members.

Annuity Digest: How did the organization come into existence—what was the catalyst?

Sheryl Garrett:  I was an equal partner in a wealth management firm that provided comprehensive financial planning and portfolio management on a fee basis.  It was, however, overkill for what most people needed and appropriate for only a handful of clients. 

On a personal level, I was not fulfilled with the work and impact on the lives of clients.  The wealth management firm was getting calls from people with relatively few assets or large amounts of assets who we did not want to hire us and turn every financial decision over to us. 

I simply set out to design firm I would want if I were a consumer.  In other words, a firm that someone could come to and say: here is what I have and what I want—please tell me what to do and I will take care of most of it and pay you for your services. 

I wanted to be able to provide advice without the conflict of gathering assets and selling.  The fundamental objective would be financial advice for the masses through competent advisors who are available to the mainstream. 

Most sensible route to this objective appeared to be hourly rate or charge.  In other words, set-up the business like any other consulting model with flat fees or an estimation of hours actually involved. 

So this is how I set-up my personal financial planning practice when I left the wealth management firm.  My firm was a financial planning firm for regular people with quality resources available to all.  No asset minimums or restrictions were involved. 

In pretty short-order, I found this approach to be incredibly attractive to customers.  Initially, I received most of my referrals from three other advisors who did have asset minimums.  By the following year, word got out and calls and referrals started pouring in.  There was no selling involved—simply financial advice and my time at a reasonable fee.

After a year in practice, I started receiving more industry press coverage.  I was really working backwards in terms of the regular financial advisor model which starts with talking to anyone and then moving towards working with few rich clients.  I find this general tone and approach to be repulsive.

I then spoke to a group of about a hundred or so Certified Financial Planners (CFP) at an industry conference.  There was a Q&A session after lunch.  Most of the conference participants came to talk to me because the theme of my talk resonated with many of the advisors in attendance.  The audience just seemed to like the idea of aspiring to be a competent professional who is able to work with people from any walk of life and render advice on any topic one is qualified to speak to.

Bob Veres was also attending the conference.  Bob had been following the industry for over twenty years and more often than not had accurate insights on emerging trends. 

Bob asked me for an interview to be published in his “Inside Information” newsletter.  Bob heard the story and how well the business was working personally and professionally. 

Bob came up with the concept of “walk in planning” and a dental office metaphor where one pays for services when rendered, etc.  Clients would be encouraged to maintain long-term relationships with their financial advisor and come in for periodic check-ups—all of which would be provided without the need to pay ongoing fees.

I then started to get quite a few calls from other advisors saying that the model is exactly what they aspired to.  Bob basically said you are on to something and “need to bottle” it and get it up and running.

Our first training class was July 2000—this was the launch and it took about one year.

We just had our 45th class in October.  Since then, we have created a web-based curriculum that is augmented with discussion and coaching calls on a weekly basis for new members.

Our real desire is to get to a fully electronic basis so that learning and material are available on a 24/7 basis. This would provide is with much broader reach.  We will continue to institutionalize and capture the teaching moments and get them into electronic form.

So the gist of this long story is that the Garrett Planning Network was born out of advisor inquiries about how I was building my own practice—I did not necessarily set-out with a specific form in mind.

There are definitely benefits to scale as we bring more advisors into the network.  For example, with more advisors, we have the ability to hire other professionals such as compliance coach.

The reality is that most financial planning practices are small businesses and it can be lonely.  Many financial advisors join larger firms because of this.  The Garrett Network addresses this issue in part by providing a community of like-minded peers to the fee-only community. 

This sense of community can be a huge support and—in addition to coaching, courses, retreats, etc—is one of the key values of the membership.  There are 300 colleagues and peers who can provide advice on many different topics—a sort of wisdom of the crowds.

Annuity Digest: The reality is that—at some point—product and service transactions are part of the picture.  How, typically, are product and service transactions (annuities, life insurance, etc) taken care of by the fee-only financial advisors in the Garrett Network? 

Sheryl Garrett:  With life insurance there are preferred providers.  One is Low-Load Insurance Services out of Florida.  They are licensed all 50 states and make a living off of commissions.  They are highly specialized and expert in their area which is critical when making a referral as a generalist.

The same holds true with long-term care insurance.  We have access to a person who has deep focus, specialization and expertise. 

It is similar with mortgages, municipals bonds, tax preparation, legal services, cash reserve vehicles, property and casualty insurance, ongoing money management, custodial services, and virtually any other financial services product area.

The fee-only advisor role is essentially one of an objective financial quarterback who provides referrals for implementation.   We tell clients what to do, how to make it happen, and where to go to make it happen.

We simply ask that our referral partners take excellent care of our clients.  We will monitor by asking our clients for feedback on the experience.  There is quite a bit of due diligence and product knowledge behind the referrals and recommendations.

Annuity Digest: Can you briefly comment on the use of annuities in your practice and within the network?

Sheryl Garrett:  Annuities tend to draw strong reactions.  People tend to be at one end of a love-hate spectrum with the products, with very little in between. 

My own views have actually changed quite a bit over the years—particularly with respect to immediate annuities.

My view is that everyone should have a base, absolute and guaranteed paycheck that is created through a combination of defined benefit plans (if available), Social Security and immediate annuities.

People want simplicity and security in retirement.  People care more about security rather than continuing to accumulate in retirement stage of life.  Security and simplicity are only available through the three vehicles I just mentioned.

Annuity Digest: Thank you Sheryl.

Key Phrases Manual: 


An immediate annuity is a type of annuity where the annuity payments start shortly after purchase of the annuity. This is in contrast to a deferred annuity where payments begin at some future date.

A more detailed definition is here:

Also, there was a pretty good and recent article on immediate annuities that can be found here:

Here is some more info on financial advisor hourly rates and the Garrett Network:

Regarding the hourly rates charged by Garrett advisors, or any hourly based planners, expect the range to run between $150 and $300 per hour… with the majority in the $180 to $240 range. The primary reasons for the big differences are; experience, competence, geography and efficiency. If you live in an expensive part of the world, and want an experienced and efficient financial advisor, their hourly rate would be at the high end of that range. However the total fees paid for what you receive is the more appropriate question. In other words, “how much is this going to cost me?” That’s what the consumer of financial advice should be concerned with – will they receive what they need for a price they’re willing to pay. So, clients should focus on total cost of working with an advisor, rather than just on the hourly rate.