A Good Financial Advisor Story

[427Vette]

I was going to ask the same question.
If you are going to charge someone $100/hr you should let them know that before so they can find someone charging a reasonable amount instead. I'd be pissed if I got charged $100/hr by anyone other than a surgeon.

He knew that we charge $75.00 per hour from the start not the $100.00 that you are implying. It is impossible to give someone a quote before we start a service call type of project. We are there to fix a problem and there is no amount of experience or a manual (like mechanics use) or a computer program to tell us what's wrong and what parts we will need and how long it will take to fix it. We have to get our tools out and start trouble shooting until we find it. At this point a rough estimate could be given but one wasn't requested nor is it typically requested.

I wish I lived in a world where $100.00 per hour was out of the question but sadly $100.00 is more common than you realize. Have you taken your car to a mechanic lately? Our local dealerships charge in excess of 100.00 per hour for a mechanic. The smaller independent shops charge around $85.00. Plumbers charge right around $90.00. How about your accountant, what do they charge? You must be pissed off a lot!

I just paid a doctor bill where the doctor saw me for less than 3 minutes. We just talked, he never even touched me and the bill came to $267.00. Apparently he charges $89.00 per minute. This was just a family doctor so your thoughts of paying a surgeon $100.00 per hour is
never going to happen. As a matter of fact I had a back surgery a few years back and the bill was $22,879.00. I was in the operating room for about two hours so he charged me $11,439.50. A far cry from $100.00 per hour.

When this topic comes up I always get a kick out of how people all want to make huge salaries but nobody wants to pay anyone else a living wage. I also think that everyone should have to be self employed at some point in their life just so they understand that all of the benefits that they get from their "megacorp" have to be paid for out of the wages they are able to charge out to their customers. It would be a rude awakening for most.

I am not going to pursue trying to collect the outstanding $75.00. I know and understand the principle of it all but it simply is not worth the energy. I have to many good, paying customers that need my service to waste time on this guy. Everyone can rest assured that I nor any of my other service business owner friends will be doing any work for this guy. He drove the final nail in the coffin he just doesn't know it yet.

 

[MBAustin]

I am not going to pursue trying to collect the outstanding $75.00. I know and understand the principle of it all but it simply is not worth the energy. I have to many good, paying customers that need my service to waste time on this guy. Everyone can rest assured that I nor any of my other service business owner friends will be doing any work for this guy. He drove the final nail in the coffin he just doesn't know it yet.

Sounds like the perfect solution. Thanks for sharing your perspective - you raise a lot of good points.

 

[REWahoo]

Sounds like the perfect solution.

Yep. I like it.

 

[Silver]

Sounds like the perfect solution. Thanks for sharing your perspective - you raise a lot of good points.

Agree. If you had vastly exceeded the estimate given prior to service, I would think he had a case. But as you describe...kick him to the curb and hope others do likewise.

 

[travelover]

Revenge is best served up cold.

 

[Hermit]

I was going to ask the same question.
If you are going to charge someone $100/hr you should let them know that before so they can find someone charging a reasonable amount instead. I'd be pissed if I got charged $100/hr by anyone other than a surgeon.

I was charged $110 per hr by a crane and operator last week. He estimated it would take 3 to 4 hours. It took more like 11 hours. Including travel time, I paid him $1300. It was well worth the money.

Have you paid for a plumber lately?

 

[aaronc879]

He knew that we charge $75.00 per hour from the start not the $100.00 that you are implying. It is impossible to give someone a quote before we start a service call type of project. We are there to fix a problem and there is no amount of experience or a manual (like mechanics use) or a computer program to tell us what's wrong and what parts we will need and how long it will take to fix it. We have to get our tools out and start trouble shooting until we find it. At this point a rough estimate could be given but one wasn't requested nor is it typically requested.

I wish I lived in a world where $100.00 per hour was out of the question but sadly $100.00 is more common than you realize. Have you taken your car to a mechanic lately? Our local dealerships charge in excess of 100.00 per hour for a mechanic. The smaller independent shops charge around $85.00. Plumbers charge right around $90.00. How about your accountant, what do they charge? You must be pissed off a lot!

I just paid a doctor bill where the doctor saw me for less than 3 minutes. We just talked, he never even touched me and the bill came to $267.00. Apparently he charges $89.00 per minute. This was just a family doctor so your thoughts of paying a surgeon $100.00 per hour is
never going to happen. As a matter of fact I had a back surgery a few years back and the bill was $22,879.00. I was in the operating room for about two hours so he charged me $11,439.50. A far cry from $100.00 per hour.

When this topic comes up I always get a kick out of how people all want to make huge salaries but nobody wants to pay anyone else a living wage. I also think that everyone should have to be self employed at some point in their life just so they understand that all of the benefits that they get from their "megacorp" have to be paid for out of the wages they are able to charge out to their customers. It would be a rude awakening for most.

I am not going to pursue trying to collect the outstanding $75.00. I know and understand the principle of it all but it simply is not worth the energy. I have to many good, paying customers that need my service to waste time on this guy. Everyone can rest assured that I nor any of my other service business owner friends will be doing any work for this guy. He drove the final nail in the coffin he just doesn't know it yet.

In the first post you said $400 for 4 hours. I didn't notice that included parts in addition to labor. I haven't been to a dealer for a while but they were charging $80/hr a few years ago. I go to a guy who works out of his home garage and charges around $20/hr. He was a mechanic at a dealership for 30 years so he knows what he's doing he just charges a more reasonable price.

I worked very hard for 11 years in a factory up until 2011 and the most I ever made was $17.40/hr. I just don't think it's reasonable for people to make 4+ times the money for no extra work. Now i'm self employed working part time. I make $15-20K/yr. The most I ever made in my life was $49K in (I think) 2009.

 

[youbet]

Isn't it kind of ironic that a person who charges way to much money for doing way to little work would actually pull a stunt like this?

How much does this advisor charge that you describe it as "to much money for doing way to little work?"

Not to trivialize the 75 bux your customer refuses to pay, but I'm assuming that since this is apparently a huge deal for you, your bill collection efficiency must be near 100%. In our area, service people don't do nearly that well, more like 90% based on comments service business owning friends have made. My buddy in the HVAC business writes off in excess of 10% of his accounts payable every year and plans for it.

To have this single incident be a major event for you would make you a lucky guy doing business in an area with a reliable paying customer pool. You'll be smart if you take a deep breath and keep this in perspective.

 

[Meadbh]

Here in Wisconsin, Thrivent is a big operation that mixes faith and finance. I think they were founded by Lutherans (Wisconsin Synod, I'd guess) but judging from their website, they're striving to be more ecumenical.

I would rather they strived to be more economical!

 

[Texas Proud]

I was charged $110 per hr by a crane and operator last week. He estimated it would take 3 to 4 hours. It took more like 11 hours. Including travel time, I paid him $1300. It was well worth the money.

Have you paid for a plumber lately?

Just today... (I know I am not the person who said they would not pay that rate, but just wanted to tell the info).....

First, they charge $90 per hour with a one hour minimum and an $50 trip charge...

I also had to pay for him to go to the plumbing store to buy a toilet hose that had a flare... seems nobody carries them anymore (guy at HD said they were illegal).... that was an additional 40 minutes.... BTW, they charge in 15 minute increments... he was there 2 minutes before the hour and charge from the 45 minute of the previous hour....

 

[Texas Proud]

In the first post you said $400 for 4 hours. I didn't notice that included parts in addition to labor. I haven't been to a dealer for a while but they were charging $80/hr a few years ago. I go to a guy who works out of his home garage and charges around $20/hr. He was a mechanic at a dealership for 30 years so he knows what he's doing he just charges a more reasonable price.

I worked very hard for 11 years in a factory up until 2011 and the most I ever made was $17.40/hr. I just don't think it's reasonable for people to make 4+ times the money for no extra work. Now i'm self employed working part time. I make $15-20K/yr. The most I ever made in my life was $49K in (I think) 2009.

You fail to realize how much they have to charge the customer in order to pay you that $17 per hour....

There are benefits... front office, buildings, insurance etc. etc... Your real cost to the company was probably 3X what you made... and BTW, they want to make a profit on you also....

 

[427Vette]

How much does this advisor charge that you describe it as "to much money for doing way to little work?"

Not to trivialize the 75 bux your customer refuses to pay, but I'm assuming that since this is apparently a huge deal for you, your bill collection efficiency must be near 100%. In our area, service people don't do nearly that well, more like 90% based on comments service business owning friends have made. My buddy in the HVAC business writes off in excess of 10% of his accounts payable every year and plans for it.

To have this single incident be a major event for you would make you a lucky guy doing business in an area with a reliable paying customer pool. You'll be smart if you take a deep breath and keep this in perspective.

I have maintained throughout this whole story that I do not intend to go after my money and that it is not worth the time or energy to do so. I simply thought that people would get a kick out of hearing a story about how a financial advisor beat me out of my wages because in most threads that I read here are blasting FA's for charging their percentage for providing their service.

Why is it that you think this is a major event for me?

 

[aaronc879]

Have you paid for a plumber lately?

.

I have. Nothing major but i've had a plumber come by 3 times in the last couple years. They were here about 15-20 minutes each time and charged me $30-40. They came from about 20 miles away so travel alone, round trip, was an hour or so. I paid cash so they didn't have to do an invoice or give a receipt. I'm sure that helps to get a lower price. Most plumbers would probably charge $80 or so just to show up. It's all about finding the right person. Some are willing to charge more reasonable rates.

 

[travelover]

.

.......It's all about finding the right person. ........

You've got that right. My plumber is on staff and he doubles as my financial adviser, plus he mows the lawn.

 

[hakuna matata]

I hear you buddy--I have had clients do the same thing, but I am more assertive on the collection end. I have always gotten paid every penny owed to me by my clients. Sometimes it takes awhile, I send the invoice each month, a few emails and in one case threatened to escalate it up to his client (a consulting gig I had). Every one folded and paid to have me go away! I am nothing if not relentless.

But I also agree you have to find the mountain you are willing to die on--and this doesn't sound like it is for you. The one I was willing to do was $4000 and it was the consulting gig. Amazing how fast that one got paid when I opted to stop being nice and got in the mud with him!

Good luck!

 

[growing_older]

I have. Nothing major but i've had a plumber come by 3 times in the last couple years. They were here about 15-20 minutes each time and charged me $30-40. They came from about 20 miles away so travel alone, round trip, was an hour or so. I paid cash so they didn't have to do an invoice or give a receipt. I'm sure that helps to get a lower price. Most plumbers would probably charge $80 or so just to show up. It's all about finding the right person. Some are willing to charge more reasonable rates.

Actually, this sounds more like you have found a circle of tradesmen who are willing to work off the books for cash at lower than the market rate. While this may work for you, it likely isn't for everybody. The story as originally described seems like eminently fair market rates. If this FA was really in the market for cut rate under the table services, he shouldn't expect legitimate businesses to provide that.

 

[youbet]

You've got that right. My plumber is on staff and he doubles as my financial adviser, plus he mows the lawn.

And posts on ER.org?

 

[youbet]

Why is it that you think this is a major event for me?

Because you posted it as though it was an unusual event for you. And you said it was "driving you nuts."

Can you tell us the general business you're in? And what is your percentage of no-pays or partial-pays?

 

[427Vette]

Because you posted it as though it was an unusual event for you. And you said it was "driving you nuts."

Can you tell us the general business you're in? And what is your percentage of no-pays or partial-pays?

I guess what I mean by driving me nuts is that this guy has the money and he is also self employed. Usually self employed people understand the cost of doing business and just pay their bills. When I have a customer who is short on money or has some type of emergency situation its easier for me to understand.

I am an electric contractor. Our no pay, partial pays are relatively low, probably around 1%-2% annually. The ten percent that you mentioned earlier seems incredibly high to me. Our little business does right around a million dollars in gross annual sales. If had to plan on losing $100,000 a year I would definitely be wound up or I would change my business practice to better screen my customers.

 

[CaliforniaMan]

...
I also think that everyone should have to be self employed at some point in their life just so they understand that all of the benefits that they get from their "megacorp" have to be paid for out of the wages they are able to charge out to their customers. It would be a rude awakening for most.
...

+1 Very well said!

You fail to realize how much they have to charge the customer in order to pay you that $17 per hour....

There are benefits... front office, buildings, insurance etc. etc... Your real cost to the company was probably 3X what you made... and BTW, they want to make a profit on you also....

+1

Having previously run my own consulting business for over 30 years I have to agree most people I have met along the way, working at their megacorp, have no idea what it costs in terms of overhead, marketing, taxes, etc. to run their own business, and think what I charged was my "take home pay". I agree with deadshort52, running their own business would indeed be a very rude awakening for many.

 

[Mr._Graybeard]

[/B]
I would rather they strived to be more economical!

 

[clifp]

I have maintained throughout this whole story that I do not intend to go after my money and that it is not worth the time or energy to do so. I simply thought that people would get a kick out of hearing a story about how a financial advisor beat me out of my wages because in most threads that I read here are blasting FA's for charging their percentage for providing their service.

Why is it that you think this is a major event for me?

I enjoyed the story and assumed it was just sharing and a bit of rant, and not an solicitation for advice on how to collect a bill, which I assume you've dealt with many times in your business.

Anyway I agree life is too short to sweat penny ante stuff like this, unless you have the time, which for most of us isn't until we are retired.

Today I decided I'm going to fight speeding ticket, if I was working I'd totally pay it. But since, I'm retired I'll enjoy the good fight more than time wasted in court.

The speeding ticket was going 30 in 25 MPH zone on a main commercial street. I'm partly embarrassed as Tesla owner for getting such a wimpy ticket.

 

[Walt34]

I also think that everyone should have to be self employed at some point in their life just so they understand that all of the benefits that they get from their "megacorp" have to be paid for out of the wages they are able to charge out to their customers. It would be a rude awakening for most.

Reading a book about it was enlightening enough for me. For a while I gave thought to hanging out a shingle as a photographer. The book Best Business Practices for Photographers was an eye-opener for me. It also convinced me that I did not want to run a business. (It also explains clearly why a competent wedding photographer's fee is going to be in the mid four figures.)

While targeted at photographers it would be good reading for anyone even thinking about starting a small business.

Oh, and my father was an electrician at the power company and he did small side jobs for beer money. The first dollar I ever earned was for pulling cable in a crawl space at the age of five because he couldn't fit in the narrow opening.

 

[427Vette]

"Having previously run my own consulting business for over 30 years I have to agree most people I have met along the way, working at their megacorp, have no idea what it costs in terms of overhead, marketing, taxes, etc. to run their own business, and think what I charged was my "take home pay".




Sometimes when I tell people we charge $75.00 per hour they gasp for air and hold their hand to their chest. Like you mentioned they think that is my take home pay. I will usually ask them what they do for work then I start to remind them of all of the benefits that they receive from their employer. Usually the conversation has to be relatively elementary because people tend to overlook things because they have never had to pay for them themselves. I typically talk about their health/dental/optical insurance, paid holidays, paid sick leave, vacation, pensions, stock options, company cars etc. Then I tell them of the expenses that they cost the company that they never see such as unemployment insurance, social security fees then we discuss over head expenses to operate a business. By the time I am done they probably start to wonder how we can make it on so little!! Nevertheless these are all things that have to be paid for so it gets calculated into our rate.

I too sometimes am flabbergasted at some of the wages/benefits that I see some posters on here claiming to get. I probably do the same gasp as stated above. But I suppose if I had been just a little smarter and not so good looking I could have stayed in school and got one of those jobs!

 

[target2019]

Interesting direction this conversation has taken...

Eventually you have to tell a customer what you charge by the hour, I suppose. But you really should charge by the job, if you can. Set a minimum job cost for the first two hours. This will offset some of the overhead, and establish a relative cost for the work. This may cover a lot of the service jobs you handle, and you'll never get to the question of what will the next hour cost.

When the customer has your hourly cost, they think they have the upper hand. However, they do not understand your level of experience, your investment in tools, insurance costs, and so on. If a customer needs to know that they have you at $75.00, and then compare your bill to someone who charges $25.00, that is a sign the relationship will go nowhere. Even if you do one job for $225.00 plus parts, and the repair is perfect, they will mention to everyone how high your rate was, and so on. The effect is that this customer is delivering negative advertising for several years. In a small community this could really hurt your business.