In July 2000, Sheryl Garrett foundeda professional group of like-minded independent advisors to serve middle-class investors, a market that still remains largely ignored by most financial planners. The Garrett Planning Network (GPN), with 310 members, has gained recognition by offering practice management tools for fee-only firms that charge clients on an as-needed, hourly basis, regardless of how much investable assets they control.

One of the things that drove Garrett to form the network was her belief that the ongoing, concierge-level monitoring of personal finances afforded to those who use financial planning is sometimes unnecessary. In fact, says Garrett, most people don't need financial planning services. The overwhelming majority of people in this country, the middle class, simply need oversight from a financial expert to verify that they are on the right track toward achieving their goals, or to help refocus them if they are not.

But while the Garrett Planning Network has brought a lot of attention to the middle class as an underserved market for financial planning services, Garrett says there is a much bigger issue. The industry still looks reflexively to a firm's assets under management (AUM) as a measure of its success. That air of exclusivity holds the industry back from evolving into an authentic profession, Garrett says.

"We need to find business models and ways of packaging our services so that we can deliver quality advice to the broad spectrum of that population," she says. Garrett eschews the AUM standard, arguing that it shuts out as many as 85% of Americans who could use occasional financial advice. The network is an important development for this industry. It demonstrates that principals can sustain a profitable business model serving middle-class clients.

CARRYING THE BANNER

It often happens that new entrants to financial planning get their feet wet serving middle-income clients before they can gain enough confidence and know-how to take on wealthy clients, says David Drucker, CFP, an industry observer and writer who has known Garrett for years through the National Association of Personal Financial Advisors (NAPFA). As seasoned advisors take on upscale patrons, they are sometimes torn between wanting to remain loyal to the less affluent clients who gave them their start, and the necessity of paring down their workloads—either by referring them to another planner within the current firm, or an outside firm, Drucker says.

The network's collegial support system helps independent advisors commit to dispensing fee-only, hourly financial advice to middle-income Americans. They don't have to feel like some lone wolf on a quixotic mission. "It is the network that really sells it. It is accessible, and they can share business ideas," Drucker says. "It is evidence for the newer advisors that it can work."

Garrett is arguably the most visible financial planner carrying the banner for middle-income Americans now, and it has brought her national attention from major think tanks and federal agencies. She has spoken at conferences presented by the Federal Deposit Insurance Corp., MassINC., the middle-class-oriented think tank, and the Brookings Institution, all on educating middle-income Americans about their finances and helping them plan for retirement. She is also a founding member of the steering group for the Committee for the Fiduciary Standard.

Garrett has also authored or co-authored a half-dozen books on giving financial advice. Garrett's Guide to Financial Planning is used as a textbook in CFP programs at such colleges as Kansas State University. During her long search for a business model with which she could make peace, Garrett says she has heard both clients and advisors lament that fee-only advice, delivered under a fiduciary standard, seems to be primarily for the wealthy. "That is an incredibly disturbing thought. That is disheartening," Garrett says. The most natural and fitting way for many practitioners to serve clients is to give them fiduciary advice on an as-needed, hourly basis, regardless of investable assets, Garrett says.

Garrett explains all of this with an ardor that seems at odds with her down-to-earth ways. But she cemented her commitment to the model-she says those who have a passion to work with middle-income clients have "a calling" to do it-after years of sometimes painful trial and error.

THE QUEST

While Garrett, then 23, was a director of admissions at Cranford College in Hutchinson, Kan., she attended a local chamber of commerce dinner where she met a woman who happened to be a financial advisor. Garrett said it was the first time that being a professional financial planner had ever occurred to her. She started out at Ameriprise's former IDS Property and Casualty Insurance Co., but she chafed under the pressure to log in 100 cold calls a day. She wanted to do what that woman at the chamber of commerce had described-holistic financial planning. IDS was the type of place that molded trainees to sell products. Against her manager's prohibitions, Garrett and a few other trainees attended local chapter meetings of the International Association of Financial Planning, and Garrett took CFP courses through the College of Financial Planning.