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  • Erik Baskin

BLUF Finance: A Financial Planning Membership for the Military Community


For more info or to signup to hear when this is launched, head to: https://www.bluffinance.com


Introduction:


As both a military member and a financial planner, serving military members has been and always will be a natural niche for me. I have found that many issues that military members face are unique and specific to the military community, and the conversations that I’ve had so far have uncovered many potential planning opportunities. I think that military members would be well served by a financial planner. The problem with serving military members is that the current financial advisor landscape is not designed to suit the majority of the community. There are several reasons for this ranging from the lower income of more junior military members, the relative simplicity of financial situations for members, and many of the free on and off-base resources that are available. It is for this reason that I am building something to fill this gap and effectively serve military members at an affordable price with effective education, resources, and 1:1 advice when needed.


Problem 1: Most advisors are too expensive for junior military members.


The most glaring problem with military members receiving financial advice is that most advisors are just too expensive in a one-on-one capacity. Another way to say this is that many military members are simply not profitable enough for most advisors to target them. The minimum cost of a fee-only financial planner usually ranges anywhere from $150 to $300 per month. This equates to $2,400 to $3,600 per year. This is a steep cost for those that make $30,000 to $60,000 per year as many military families do. It is difficult to fault financial planners for needing to establish a minimum fee to run a profitable business, but the reality is that it is too time intensive to serve any lower-income group at a fee level that makes sense for most advisors.


Some may say that there are AUM advisors that are cheaper if they only charge 1% on a portfolio of less than $100k. This is usually a relationship that involves investment advice only, and is typically not an intensive and personal comprehensive financial planning relationship where every aspect of the member's financial life is covered.


Problem 2: Many junior military members may not need 1:1 guidance from a financial planner.


To build on the point above, many junior military members don’t need to be paying for a comprehensive 1:1 relationship with a financial planner early in their career. Many times these members won’t have dependents, simplifying or even eliminating insurance needs. Their investments are relatively simple with the TSP and maybe a Roth IRA. The most important thing for these members is to get good guidance and education about spending less than they earn, avoiding consumer debt, and starting to accumulate wealth through investments. These members may not necessarily need all of the services they would be paying $150-$300/month for. These would be things like education planning, tax planning, and investment real estate. These things will all become more important in due time, but may not be necessary to focus on early in life. For a younger, simple military member to pay for advice they don’t need is extremely inefficient for both the member, and the advisor.


Problem 3: Many military members are DIYers and the only thing they have to rely on is questionable free advice at best, or mutual fund and insurance salesmen at worst.


Many members don’t want 1:1 guidance from a financial professional. They feel comfortable managing their investments, and we still live in a world where most financial advisors are charging a percentage of assets on your portfolio and will not bring you on as a client if you don’t let them manage it. I think that most people would benefit from the help of a financial planner, but that doesn't mean that they are going to hire one. I realize the majority of members won't. Military members are hard-working, driven professionals and many times just won't want to ask for help or hire a professional for one reason or another. I think it's okay to not want to work with a financial planner on an ongoing basis, but I also think that there needs to be some sort of structure and education for members to be heading in the right direction. There are so many nuanced aspects to personal finance that are important to understand and review, and there is probably a lot being missed.


Another part of this is that there are also a lot of free resources on base for military members like financial counselors. They will help you with a budget and financial basics and are extremely competent professionals, but they are not allowed to give you personalized financial advice. Many members also may turn to the various free Facebook groups on personal finance for military members. I am a member of a lot of these groups myself, so I can see that at times these can be helpful, but generally, they are a mess of random questions that are answered with all kinds of incorrect information. There is not a lot of structure to these nor is the advice always reliable.


Because fee-only planners are too expensive, and Facebook groups are disorganized advice, many members end up being preyed on by salesmen that work for the most notable financial institutions that will not be named. I bet you can name three of them off the top of your head. These are the guys hitting you up on LinkedIn trying to sell you life insurance or trying to sell you a high-load mutual fund. These companies are extremely product-driven and typically recommend a mutual fund or insurance product for every need you may have. These products and companies are standing in the way of members building wealth and I believe that they are a huge negative for the military community.


A Solution: An Affordable Financial Planning Membership for the Military Community


All of this being said, I think that there is a way to serve this community in a way that makes sense to both me and the members that I serve. This is why I am building the BLUF Finance Membership. BLUF is a military term for “Bottom Line Up Front” which is the ethos behind how I intend to run this membership. This will give military members straightforward education, resources, and structure to keep them on track and improve their financial health. I want to design something that is as personalized, impactful, and valuable as possible as it can be without being a typical 1:1 advisory relationship. Here is what I envision as part of this membership:

  • Military Finance Course: educational walkthroughs on each financial planning area, showing exactly what I recommend members do with the exact links, calculators, and resources that I use in my financial planning practice. This will have 50+ lessons of content of me walking through exactly what to be doing in each planning area.

  • Monthly Office Hours: This will be a monthly recording that I send out answering any questions that I received, military finance news for the month, and a walkthrough or discussion on exactly what I recommend they do this month in their financial plan.

  • Elements Financial Monitoring System: This is a state-of-the-art financial monitoring system that is designed to track all of your accounts and relevant financial planning ratios. This is the exact system that I use with my clients one-on-one.

  • Quarterly Progress Reports: You will receive a progress report of how your accounts are changing over time and what that means for your financial health as well as your overall net worth so that you know where to focus your efforts moving forward.

  • Library of Content: This will have office hours recordings, checklists, templates, a financial planning calendar to keep you on track, and benchmarking of military member statistics of financial health so that you can measure yourself and look for areas of improvement.

  • Financial Helpdesk: You will be able to ask for help finding a resource, or general financial questions that are not specific one-on-one advice.

  • Financial Answer sessions: for an additional fee, when the complexity hits whether it is a PCS or separation, I will be able to better assist members in a one-on-one engagement for as little as an hour or as much as the member needs. This is an efficient use of both of our time as you have the structure and education to make sense of the basics, but may need professional help with some of the more nuanced areas of planning.

I hope this will be valuable to the military community and be something that helps to educate and guide families to better financial health and outcomes.


For more info or to signup to hear when this is launched, head to: https://www.bluffinance.com

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