Welcome everyone! Welcome to the 491st episode of the Financial Advisor Success Podcast!
My guest on today’s podcast is Patrick Lonergan. Patrick is the founder of Vital Wealth, an RIA based in Clinton, Iowa, that generates $2.5 million in annual advisory fee revenue for approximately 100 client households.
What’s unique about Patrick, though, is how his firm is able to charge its business-owner clients annual consulting fees north of $70,000 by offering tax planning strategies that frequently save them hundreds of thousands of dollars.
In this episode, we talk in-depth about how Patrick is able to offer his clients significant hard-dollar tax savings by first taking advantage of what he calls “level one” administrative and bookkeeping opportunities (such as maximizing the QBI deduction or choosing an optimal business structure), how Patrick then moves on to “level two” opportunities where some investment is required on the part of the client (for example, creating and contributing to defined-contribution and defined-benefit retirement savings plans), and how Patrick also considers “level three” strategies that combine sections of the tax code to create tax efficiencies (for instance, by compliantly setting up a micro-captive insurance company).
We also talk about how the tax savings strategies Patrick puts to use are particularly valuable for entrepreneurs who can reinvest in their business (potentially generating profits that exceed any deferred tax burden), how Patrick assesses tax planning opportunities with an eye towards cash flow management for his clients to ensure both their personal and business spending needs are still being met, and how Patrick’s clients have become prolific sources of referrals given their ability to easily explain the hard-dollar value his firm offers to fellow entrepreneurs.
And be certain to listen to the end, where Patrick shares how he transitioned from being an entrepreneur himself in the real estate business to entering the financial advice industry in the insurance channel to eventually going independent and starting his own RIA, how Patrick has handled transitioning legacy clients who live in his small town but who aren’t good fits for his current service offering, and how Patrick has found that persistence and “showing up” every day, even during tough times, has contributed to his success as a business owner.
So, whether you’re interested in learning about a tax-savings framework for entrepreneur clients, charging a premium fee in return for offering significant hard-dollar tax savings opportunities, or the value of cash flow management for entrepreneur clients, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Patrick Lonergan.
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