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Fee Based Financial Planning with Eric Simonson

George Grombacher September 20, 2023

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Fee Based Financial Planning with Eric Simonson

LifeBlood: We talked about fee based financial planning, what it is, who it’s for, and how it works, with Eric Simonson, CFP, Founder and CEO of Abundo Wealth.      

Listen to learn how the financial planning process starts!

You can learn more about Eric at AbundoWealth.com, Facebook, Twitter, Instagram and LinkedIn.

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Our Guests

George Grombacher

Eric Simonson

Episode Transcript

george grombacher 0:02
Eric Simonson is the founder and CEO of abundant wealth, their firm minimizing fees and maximizing life. He’s a CFP, a CRP C and C L. TC. Welcome, Eric.

Eric Simonson 0:14
Thank you, George. Appreciate you having me on.

george grombacher 0:15
Yeah, excited to have you on, tell us a little about your personal life a little bit more about your work and why you do what you do.

Eric Simonson 0:23
Yeah. Personal life, I live with my wonderful wife here in Houston, Texas. We are enormous travelers, we spend all our time either traveling or planning our travel when we’re not working. I’m a passionate foodie. I love experiencing new restaurants and trying different food. And I am also very passionate about living a good healthy lifestyle, spend a lot of time working out doing meditation, eating good, healthy foods. So that’s become as I get older, that’s become a more important thing for me as well. So that’s kind of the the personnel, Eric and who I am as a person. Professionally, yeah, I am the founder and CEO of abundant wealth. We are a radically different financial planning company. We were founded in 2019. And as really a different way for consumers to get honest, good advice. Traditionally, as you know, George, the financial advisor landscape is really just built around managing clients assets, providing, you know, really only either investment advice, or insurance advice, and charging a very, very, very high fees for that advice, either in the form of a commission, or in the form of a percentage of whatever investments you have. And I just felt like there was a huge amount of the country that either couldn’t afford that advice, or maybe just didn’t agree with that way of receiving advice. And so I felt like there’s this great opportunity to start a bundle and serve clients differently, essentially, like a gym membership, right, charging a low, affordable, monthly fee for advice and giving them advice on everything in their financial life. And making sure they never had to worry about is there any conflicts of interest? Is there any hidden agenda? Nope. You know, it’s just the it’s just advice we’re giving you for that fee. And that is it. So it’s very transparent. And it’s been growing like crazy since we launched, are, we’ve really doubled our firm in size, every year, since then, and this year, we’re set to bring on, gosh, over 250 clients, which is a lot for, for a financial planning firm. So it’s been, it’s been great. And we’re just trying to prove to the world that this model works, prove to the world that other advisors can can do this and still make a good living, because we think it’s really the best thing for our consumers and the country.

george grombacher 3:12
Well, congratulations on on making the leap and having the success. I’m sure, well, how much of your perspective has changed since what you thought it was going to be to what it is now?

Eric Simonson 3:29
Ah, a lot? Actually, that’s, that’s a great question. A lot has changed. It’s funny, I was having a conversation yesterday with somebody. You know, I think, naively, when I started, you know, I knew it was I knew it was a really solid idea. But I think when I, when I thought about it financially, I thought, Oh, this is this is going to be a no brainer for consumers, because they’re going to say, you know, they’re gonna see, oh, I have $500,000 that would normally pay five $6,000 a year to another advisor, I can pay a bundle, you know, $900, or whatever. That’s a huge savings. This is a no brainer. But I think I learned quite quickly that I was the only person who actually did the math on a regular basis like that. And so, you know, consumers, really they do. In the end, they’re just gonna look at what am I paying? And am I getting value in that, unfortunately, where we are delivering a lot of value, and we are, you know, justifying our low fee, but it was, I would say a little bit harder to get those savings across that I thought it would be for folks.

george grombacher 4:37
In Do you think that that’s just because most people just didn’t see the fee that they were paying and contribution?

Eric Simonson 4:45
Yeah, it’s a combination of that. And it’s then a combination of, you know, that’s a, that’s a fee that’s just sucked out of your performance. That’s a fee that’s just sucked out of your accounts. You don’t really see it. This is, you know, our fees. On the credit card or on a bank draw or however they prefer to pay, but it’s a lot more transparent, purposefully. You know, and that was kind of our fun challenge to say, Yep, this is what you’re paying us. And this is why you’re paying us and making sure that they understand that and they, they feel good about it.

george grombacher 5:18
Yeah, always difficult to be on the bleeding edge, or the frontlines of helping make positive consumer change or really any change. So that that certainly does make sense. But once you explain it, people are obviously getting it.

Eric Simonson 5:36
Yeah, exactly. That’s a good way of putting it. It’s, it’s, it’s so different, that it takes a second for people to, I think, put it together.

george grombacher 5:47
And in terms of, of frequency of of meeting, I’d love to just learn more about the process and what you found people are really enjoying.

Eric Simonson 6:00
Yeah, we, you know, this is something we obviously think a lot about on the team. And we truly believe that financial planning is an ongoing process, you know, life’s always changed, there’s always, you know, unexpected expenses, there’s always job changes, stock market changes, tax changes, you name it, right, life is evolving. And so we want to be a continued resource for our clients. So we’ve never, we’ve never put any sort of like constraints on, you can only meet with us once per year, or you can only email us, you know, once per quarter or anything like that. It’s very much a, we want to be we want to be here, we need help. If we haven’t heard from you, we will reach out and check in. And so on average, in the first year, we’re meeting about three to four times with the average client. And then in year two, plus we’re meeting on average two to three times. But those are averages, you know, we’ve got some folks who are a little bit more, some folks are a little bit less, and it’s whatever works, right, whatever that right cadence is. And, you know, if you’ve got a lot going on in any particular year, we might meet a little more often than then next year we meet once. It’s, yeah, we try to be flexible in that sense.

george grombacher 7:16
It is a it’s a really interesting thing. I do you know, I’ve always thought that about 80% of Americans will never interact one on one with a financial advisor. I don’t know if that’s correct or not. So you have 20%, and art, are you trying to tap into that larger number of people that would maybe never have interacted?

Eric Simonson 7:38
Yeah, that’s exactly what we’re going for. We’re going for that 80%, blue ocean number. And we are working with a lot of people who have never worked with a financial advisor before. And that’s great. And it’s actually forcing us to think about financial advising in a new light, because, you know, my former career, I worked at a large broker dealer, we did financial planning in a certain way. And now, you know, now that we’re working with folks who’ve never worked with a financial planner, before, I think that they, they’re expecting us a different service, right, that, you know, they’re they’re being paid monthly, or this or they’ve been charged monthly. They’re looking for advice, maybe in a different accessibility at a different accessibility level than if we were, you know, if we were a larger firm, you know, just just getting paid a one time annual fee, or a monthly or sorry, percentage of assets. So, yes, it’s, um, we are we are working with that 80% number. It’s exciting. It’s who we wanted to work with. But it’s also continuing to force us to evolve and make sure we are working the way that they want us to work.

george grombacher 8:57
Yeah, super interesting. Understanding what, for lack of a better term needs to be done from a financial planning standpoint, and also giving people what it is they want. And yeah, exactly want to consume. So you’re putting that needle Eric.

Eric Simonson 9:14
Yep. That’s exactly.

george grombacher 9:19
And in terms of, from an entrepreneurial standpoint, leaving a large company, and there’s so many great financial companies that are out there, and then going out on your own, I’m sure that you’ve had anxiety and you’re nervous about it. And then there’s a financial challenge of making a big shift like that. If you don’t mind, hear a little bit about kind of when you started thinking about this, too, how long it took you to kind of build it out and then launch

Eric Simonson 9:51
Yeah, I probably so I put in a six month notice at my prior firm actually said In the months, and so I kind of had that timeframe to really form form the idea in my mind. And then, you know, after I left that firm, it was probably about two months after that, before I was able to, you know, hang my shingle, as they say. So, seven, eight months, from idea to doors are open. Financially, yeah, absolutely. This, this journey has been, it’s, I get asked a lot like, why is nobody else doing this? And I think the answer is money and greed. And like I am, I can make a lot more money doing anything, anything else in the financial services? And so could probably most of the people on our team. And we’re all do we all believe in this kind of bigger purpose of what we’re trying to do. And we’re trying to kind of break through that, that scalability and break through kind of the mass adoption. And so yeah, it’s been a challenge. But fortunately, you know, I’ve got a supportive family, I had, you know, I had some some savings to kind of work through. So we’ve been able to make it work. And that’s not you know, we’re at a point now to where we’ve got a product that’s proven, and we could definitely raise money if we needed to, I’m trying to resist that, because I want to have creative direction. And, you know, I want to make sure I’m always putting the consumers first, not necessarily the shareholders or the the investors. So have options. But yeah, that that was financially that was obviously a big hurdle to get through. And then entrepreneurially, you know, that’s something that’s never been a problem, I, I’ve never had doubt. I mean, I was I was I was one foot, and for the other, let’s just do this, let’s make it work. I never had any hesitation.

george grombacher 11:59
Got it. I appreciate all that. And also very appreciative and grateful that you did make the leap and that you are operating from a from a mission and a values perspective, and making the really hard choice to make less money. Because even though you could be making more going a different way, because you believe it to be the right way to do it.

Eric Simonson 12:25
Yeah, that’s, that’s, that’s right.

george grombacher 12:28
And in terms of, of, of growth, I imagine or perhaps it didn’t start off as just you. But now it’s, it’s, it’s, there’s there’s a lot of other financial folks that you’re working with.

Eric Simonson 12:41
Yeah, it started out. So I started the firm in August of 2019. And then the person who are now considered a kind of the co founder of the firm, he actually joined that December, so three months in, and he’s been really kind of, he’s played an important role in helping kind of shape shape the vision of the firm. And also, he’s building out a lot of technology tools that we’ve we’ve adopted and use to help scale. So we’ve got So myself and then the co founder. And then we also have four additional advisors with financial planners, a non non adviser. And then we’ve got a compliance officer, and then also another team member whose job is actually to liaison with other financial planners, because other financial planners have clients have prospective clients that just aren’t a good fit, either. They don’t have enough money to work with them. Or maybe they just there’s a fee, bomb somewhere along the line. So they actually refer those folks to us. So we, we do get a fair number of new clients through referrals from other advisors, which is wonderful. Yeah,

george grombacher 13:57
that makes a ton of sense. And know how many advisors out there that want to do a good job, but doesn’t mean that certainly can’t work with everybody. And when not a good fit, it makes all the sense in the world to have somebody to be able to make an introduction to so I appreciate that. And then from an entrepreneurial standpoint, there’s all these shiny new tools and technologies that are popping up. How do you make decisions on what you’re going to address or add on?

Eric Simonson 14:24
Yeah, there are a lot of shiny new tools and part of you know, part of charging as little as we do. It helps make that decision for us because we have to be really, really, really about what are we going to use. And we have a full time programmer on the team who is just an absolute Rockstar when it comes to programming. So honestly, if we see something that we really like, it’s not about should we go by that it’s more hey, you know, Ethan, can you build some Did like this for us, and he usually can. And so we’ve we’ve, we’re lucky to have our own platform, our own CRM, a lot of our own tools that we’re so we’re not dependent on a third party for much. And that also is strategic, because the risk for us is, if that third party that we become dependent on raises their prices, or if they stop if they charge instead of per firm, or per advisor, if they charge per client, like all of a sudden that is that could kill the business. And so we we have to be much more kind of reliant on ourselves and our own ingenuity.

george grombacher 15:43
Love it. So you mentioned the the fees that you’re charging, how much? How much does it cost to work with a bundle? A bundle?

Eric Simonson 15:53
Yeah, it’s for an individual. So if somebody comes to us, just looking for planning for themselves, there’s an upfront kind of one time fee to get through some of that heavy lifting up front of $375. And then we charge that monthly, ongoing fee for advice of $89. So 89 bucks. And then for a couple, it’s, again, that one time fee of $450. And then the monthly subscription of 139.

george grombacher 16:27
How long did it take you to get to those numbers?

Eric Simonson 16:30
You know, it didn’t take very long. i It sounds like a lot of thought went into it. But it was actually quite, you know, it was when I knew it was a rough numbers. But you know, like I didn’t stress too much about like, is it 140? Is that 135? Is that 128? Like it was just those numbers felt right to me. So we went with it again, entrepreneurial. I’m just like, making decisions and going with

george grombacher 16:49
it. Yeah, yep. Pricing is such a fascinating thing. And there’s entire industries that are built around figuring out how to price things. Yeah. But oftentimes, it’s just, you know, just kind of go by field, and obviously, what people are going to pay? So Right.

Eric Simonson 17:03
Yeah. And that’s, and I think we I think we’re close, I think we if anything, we’re probably low, a little bit low. But yeah, I think we were close, I

george grombacher 17:12
love it. And walk us through the process of when somebody goes to a bundo they sign up, kind of walk us through maybe maybe the first couple of interactions.

Eric Simonson 17:27
Yeah, folks land on our website, they can learn more about us. And if they’re interested in scheduling a free consultation, we’ve got a number of different schedule, scheduling meeting buttons on our homepage, so they can just click on Schedule a meeting, they’ll get paired with one of our amazing financial planners who will meet with them for an hour, learn more about them, their goals, what they’re what they’re hoping to get help with. And then if, you know if they love it, if they want to sign up, then we’ve got a really easy signup process. So it’s, it’s like buying something on Amazon, you know, you just you just click a couple buttons, and you’re now you’re not in our member. And then they set up their next meeting with their advisor, where we start to actually get access to some of their data. So we can look at paycheck stubs and account statements and start to get our minds and you know, numbers around things. And then then the meeting after that is the recommendations meeting and then we’re off and running.

george grombacher 18:31
Excellent. Sounds pretty easy.

Eric Simonson 18:34
We hope so. Yeah. There’s you know, it’s not a you don’t have to come into the office and you know, sign up, sign a form and get it notarized like it’s yeah, it’s very simple.

george grombacher 18:42
Love it. Well, Eric, thank you so much for coming on. Where can people give us the actual website?

Eric Simonson 18:48
Yeah. So if you wanted to learn more, you can find us at www dot abunda wealth.com a BU n d o. Or we are on of course, Instagram, Facebook, I guess x now. So we are on all the all the different social media platforms if you want to follow us there as well.

george grombacher 19:13
Excellent. Well, if you enjoyed as much as I did, show Eric your appreciation and share today’s show with a friend who also appreciates good ideas go to abundant wealth.com A B u n d o wealth.com. And click that button for the free consultation and schedule an hour meeting and find out if it’s a good fit, and get your get your act together. For goodness sakes. we all we all need it. Thanks again, Eric. Thanks, Josh. Until next time, remember, do your part by doing your best

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