Only Fee-Only
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Only Fee-Only
#166 - Becoming the Advisor He Couldn't Find: Ethan Kok's Fee-Only Journey
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What happens when a Dow Chemical employee turned real estate investor can't find a financial planner willing to look at his whole picture? He becomes one himself.
In this episode of Only Fee Only, Peter and Broc talk with Ethan Kok, owner of Sage Wealth Planning. Ethan shares how his search for real financial advice as a young investor in Midland, Michigan opened his eyes to the fee-only model — and ultimately pulled him out of a corporate career and into financial planning. He breaks down how he built his early client base by mastering Dow's complex employee benefits, why offering flat-fee planning to clients without big portfolios is an opportunity most advisors miss, and what he learned from purchasing Sage from its founder, including why the transition plan matters just as much as the purchase price.
Ethan also talks about his team's shared passion for tax planning, how his appreciation for insurance planning has grown over the years, the "downer meeting" his firm uses to help clients get real about life insurance and estate planning, and his advice for anyone at a big company thinking about a career change into this profession.
Ethan's Social:
https://www.linkedin.com/in/ethan-kok/
Music in this episode was obtained from Bensound.
Welcome And Guest Preview
SPEAKER_02What's going on, everyone? Welcome back to the OnlyFe Only podcast. And as always, we appreciate you being here. Today we sit down with Ethan Coke, owner of Sage Wealth Planning. He's got a really cool story. He spent the first five years of his career at Dow Chemical before making the jump into financial planning. And it all started when he and his wife got into real estate investing and couldn't find an advisor who looked at their whole picture without requiring a pile of investable assets first. That search ultimately led him straight to the fee-only model. And uh this is really cool. We talk about his early client base, how he's built his firm, why he's really passionate about tax planning, um, and also about his appreciation for insurance planning and how that's grown over the years. So uh, as the insurance guys, we obviously loved hearing that. Uh, and just everything about his story was really awesome. So, without further ado, enjoy this conversation with Ethan Coke on the Only Fee Only Podcast.
From Dow To Financial Planning
SPEAKER_01How's it going, everyone? Welcome to another episode of the Only Fee Only Podcast. I'm Peter Travolo. I'm here with my co-host Brock Buckles, and today we're so excited to have Ethan Coke on from Sage Wealth Planning. Really excited to have him on and share how he's serving his clients. So, Ethan, welcome to the show, man.
SPEAKER_00Thanks for having me on, guys.
SPEAKER_01Yes, you bet. So um, let's dig a little bit into your background. I mean, what's uh kind of gotten you into the financial planning space and we can go from there?
SPEAKER_00Yeah, absolutely. So here in May, I'll I'll have been a financial planner for five years. But before that, uh I worked at Dow Chemical for five years, coming right out of college. What got me into the space is living in a small town. Uh, my wife and I became real estate investors. And through that process, we realized that there were a lot of things that we didn't know. And we were trying to find a financial planner to help us with not only our investments, but taxes and hey, how do we think about these rental properties that we own in a larger picture? Right. And so through that, after talking to a lot of financial advisors, I realized there are a lot of different ways that that people work with families, right, in this industry. It's kind of like doctors. And the fee only, specifically working on starting with with clients' lives, right, and what matters most to them, and then getting to the investments and the insurance and everything else, was really, really attractive. And I didn't know that people did that. So as soon as I knew that that was a career, I started taking some of the tests and a couple of years later made the jump.
SPEAKER_02Yeah, that's really cool. And what were some of the things that you did learn at Dow? I mean, that had to be pretty interesting, right? Like as big of a company as that is, like, what was that like kind of being there and and and what did you see just out of curiosity?
Lessons From Dow And Benefits Mastery
SPEAKER_00Yeah, so I mean, first of all, Dow, really big company, right? They've got 37,000 employees globally. Um, when it when it comes to Dow's business, right, a lot of it is about efficiency. So, like what I uh when you're making chemicals, right? If you can make the process more efficient or you can sell things more efficiently, it can make a massive difference, right? Every penny that you can make extra can can equate to millions, if not billions, of dollars. So that that is really translated over to my business. Absolutely. And then one of the other things is you're really looking for when I was in sales there, you're looking for um how to basically how to provide value to some of these customers. And that focus and it being a little bit harder of trying to figure out how to provide value to a chemical customer who's been doing the same thing for 15 years really translated over well to this career where, because at the end of the day, right, that's what we're all trying to do is figure out how to provide values to the families we serve. But the biggest thing I learned from Dow Chemical that that translated this career was around the employee benefits, right? Dow has these complex benefits. They've got a pension, they've got an employee stock purchase plan, they have programs through their, through their medical benefits that are not, they're not transparent, right? And there wasn't a lot of information online. So by understanding those super well, you can find people thousands of dollars quite easily, if not more. And uh, and so just really understanding the the opportunities there, you know, that translates to every every other company as well.
SPEAKER_01Well, there's some key examples kind of when you were building your financial plan yourself with those rental properties, like maybe when you met with a financial planner, like was there a key moment and we're like, wow, this is not what I'm looking for, you know, I have to keep searching.
SPEAKER_00Yeah.
When Advisors Require Minimum Assets
SPEAKER_00So on the negative side, right, there were a lot of people, once again, lived in a smaller town, Midland, Michigan. So a lot of the people that we were meeting with originally that that would take us on as clients were brokers, right? And so it was, hey, we can talk a little bit about the rental properties, but to have a meeting with us or to be to work with us, you need to bring us X amount of money, $50,000, $25,000, and we're gonna buy investments with that, and you're gonna pay us up front, right? They were now knowing the industry a little bit better. They were talking about a share products, right? And then we'll get to everything else. And in a couple of cases, too, it was hey, you can start with us this way, and once you get to X amount of money, we'll talk to you more about the rest of your life, right? That just, you know, I I get it. Everyone's got to make money, but that does not make you feel very good when you when you're getting started, right? And the transparency of of being able to pay more for service now is something that that we wanted.
SPEAKER_02Yeah. Well, and it sets you up for success, right? Like I I have always appreciated the financial planners that kind of have like a multi-pronged approach to where it's like, okay, if you don't have investable assets, no, we're not gonna charge a fee. It's not gonna be 1% or whatever. But if you want to pay me $250 or $350 or whatever it is a month, like we can make sure that we're meeting a few times a year to ensure that you're on the right track to get to that other side where maybe we switch to the AUM or whatever it might be. Um, and I can speak from experience on that. I mean, we've been working with our financial planner for years now. Yeah. And it he, I mean, some of this, the advice that he's given us has been like crucial to the success that we've seen now with it, whether it's investing or saving or buying a home or or whatever. So I think it's uh I think people that are just like, well, come talk to me when you have this much. Like, I totally get it in specializing in a certain area, but it almost seems like you could be doing a disservice to some people.
SPEAKER_00Yeah, I think it's a big opportunity that a lot of financial advisors are missing out on. Uh at the end of the day, we all have to make money, right? But whether someone pays you from their assets or they just pay you a fee to get started, right? As they're getting that plan together, you know, does it does it really make that big of a difference at the start? So that's a that's a core philosophy that we have is don't get me wrong, we have minimums, but people can pay us that minimum fee and get the same services that we provide to others without having the assets. Totally.
SPEAKER_01So when was the first time you kind of heard the term fee only?
Discovering Fee-Only And Clear Pay
SPEAKER_00Yeah. First time I heard the term fee only was when I was searching for a firm to join, right? So before that, I thought of financial advisors all as one big bucket, right? Just everyone's kind of doing the same thing. Um, and as I got deeper into the world of financial planning, I realized that there were firms that were fee only that were, and in my mind, that made a lot of sense because you're in a lot of ways, you're aligning your incentives with the families that you're serving, right? And while there's always going to be conflicts of interest, you know, you you know that uh that in a lot of ways your financial advisor is incentivized to have your best interest at heart, right? Because that's how they're getting paid. So um it was during that search, and it was kind of eye-opening to see how many firms were were not Fiona, right? And uh, and so and and that was something that I was definitely searching for when trying to find a firm to join.
SPEAKER_02Were there any interviews with the like the mother mutuals of the world? Or did you even did you even get into that?
SPEAKER_00Yeah, and I I won't I won't name some names. No, yeah, no, no, no. But uh but I there were there were definitely some interviews like that. And I will tell you one of the things, one of the good pieces of advice I got from it actually wasn't someone in the industry, but just uh a family I was hoping to serve in the future that I had a good relationship with, was they said, hey, ask the financial the the firms, how do you guys get paid? Right. And if it's easy to understand, it's going to be easy for you to explain to others, which then instills trust. And there were a few times, right, where it was it was a 15-minute conversation and I walked away scratching my head, right? So so that that definitely was yeah, there's a lot of that out there. Yeah, for sure. For
Landing Early Clients With Multiple Channels
SPEAKER_00sure.
SPEAKER_01So when you were first building your client base, I mean, what was kind of the marketing plan? Where did you start out?
SPEAKER_00Yeah. So when I was first starting out, I was I was hitting my my old company, Dow, pretty hard, right? So that's where I had a lot of the expertise with the employee benefits. The the retirement planning at Dow is a little bit more complicated with pension and some other benefits as well. A lot of people that leave leave with a package, right? So uh severance package. So that's that was where I got started. And from there expanded to working with business owners, directors and executives from other companies as well that are looking to make that retirement transition. And then just naturally, you know, their kids and other people along the way.
SPEAKER_02So was it like a did you just like reach out? Because I think a lot of people are like, we got to nail down on that a little bit more because a lot of people are like, yeah, but what did you did you hit up your best friend? Like, did you hit up the coworkers that you worked with immediately? Like, what were there just people that you were close to that kind of you had like bounced this idea of going off and starting your own thing that were like, hey, I'll be one of your first clients? Like, what were those first few in the door? Who were they?
SPEAKER_00Yeah, so you're asking a great question. And to to answer on how I did that, right? It wasn't just one approach. And that's what I would recommend for other people getting started is don't just think of, hey, I'm gonna, I'm gonna host a seminar or uh, or have people come to the library and listen to me talk once a month. You gotta think about doing it multiple ways. So I was I was definitely telling people before I left, right? Hey, once I had announced to the organization that I was going to be leaving to do this, hey, this is a career I'm thinking about doing. I think you'd be a great fit, et cetera, right? So, so definitely priming the pumps before I left. After that, it was offering to talk with people for free to learn more about their situation and learn from them and also see if they might be a good fit. And then we did some of the the more um the more regular, hey, let let us do a presentation on benefits for Dow or their other subsidiaries, and and through that found a few clients as well. But but honestly, the the first few people were taking a big chance on me as well because yeah, I had expertise on in certain areas, but there were a lot of other areas where where I didn't, right? And luckily I had a great mentor who who owned Sage and started Sage before I purchased it that was able to help quite a bit. But uh, but I definitely have a lot of uh a lot of gratitude towards the first five or six families that took a chance on me there early. Yeah.
SPEAKER_01Yeah. If
Early Learning Curve And Tax Planning
SPEAKER_01you don't mind sharing, like maybe what were some of those entrepreneurial kinks that you were working out in the beginning.
SPEAKER_00Yeah, yeah. So I mean, I think for for me, Red came into the career at 27. At 27, right, yeah, one of the one of the benefits you have is is probably what you don't know and and uh being able to dive in head first. That's also a a huge problem, right? Is not knowing what you don't know. So I think I had a lot of a really good understanding of a employee benefits, uh, the the investment side is that's where I had done a ton of the the uh coursework before that I had uh before I joined Sage. I did not know a ton about tax planning, right? And I got really excited when we could find ways to save people money on taxes. But when I look back, right, that is, I mean, there's so much to know, and you accumulate information over time, but um, that's one of the things that sets our company apart. And and and I think a lot of financial advisors apart is is incorporating taxes. And I just, I mean, I I did not know anything when I got started on that front.
SPEAKER_02Yeah, yeah. No, that's huge. And I mean, it is one of the biggest, biggest pieces of somebody's financial picture, no doubt. Um, plus when you're in your mid-20s, man, like, you know, you had your job at Dow, you had done some things, but then it's like, at least for me, I felt like I grew more, way more from 26 to 32 than I did the rest of my entire life. Like it was just like learning some like life things, lessons, getting married, like all of that stuff. And then that really does translate a lot into your professional life as well. So did you have you kind of felt that over the last like five, six years, too?
SPEAKER_00100%. So I'd already owned a few places, but outside of what's called real estate, right? It was marriage, having a kid, the people that were close to me going through retirement themselves. Just I think the more life experience you get, the easier it is to connect with people. And it's not to say you can't be a good financial advisor at a young age. You absolutely can. Yeah, absolutely. Just naturally, as you learn more, and I feel like that really happens as you get into your late 20s, early 30s. You you learn more about life, you learn more about uh the nuances with some of these big transitions from others. It it makes things a lot easier.
SPEAKER_02Yeah, for sure, man, for sure. So let's talk a little bit about the transition of you know, you purchasing the practice, because a lot of people, that's like that does happen sometimes,
Buying The Firm And Transition Planning
SPEAKER_02right? Like we you go into a business that's already existing and um working, like what was and you can go into as much detail or as little detail as you want, um, but just kind of in terms of how you guys figured it out, what the transition was like, and then kind of what it looks like now versus what it did when you originally joined up.
SPEAKER_00Absolutely. So I was I was lucky that early on, right, I was able to purchase it when Matt and I were still working together, I was able to purchase a small piece of the business. So there was already a value set, which made things really easy as the conversation went on. But if I back up even from there, you know, what happened was that Sage was designed to be a boutique firm to serve a small number of individuals in a in a really, really great way. And as we started to have success, right, the number of clients grew and grew and grew. And it got to a point where, you know, a lot of the as you as you grow as a financial advisor, a lot of your day can still can become pretty mundane, right? It can be operational. Um, don't get me wrong, you're still learning, you're still you're spending a lot of time with clients. But I think what if you're not in the industry, what you don't expect is there's a lot of things where you're just doing the same thing over and over again, right? And you know, if there's a war like we're having right now, right, having that same conversation 40, 50, 60 times, you know, can it is um it can be pretty repetitive. And so as we grew bigger, Matt, who who Matt Doran, who owned the company before, um was just he he wanted to do other things with his life. He had already been a financial advisor before in a in a in a previous life, and this was kind of a passion project that he started. So the the conversation developed pretty naturally of hey, this isn't, oh, it's it's not quite as much about uh about uh saving people money and or or uh or finding new things that we can do for clients. A lot of it now is pretty operational. He was looking for something else to uh to be able to basically to be able to stimulate him um long term, right? And and so as that conversation kind of came about, we talked about the value of the company, right? We were we were very transparent about uh about the way in which we would try to make this transition to to make sure that it was what was best for the families that we serve. And that's something that I'm super thankful for is, you know, when um during this transition, there there was a period, right, where where I was becoming the lead advisor for a lot of clients that I wasn't servicing in the past. And being able to, you know, not having to start over from scratch, right? Um, being able to make a transition over a period of time was was really, really helpful. Um and I think that was, you know, we can talk about the value that I that I bought the company at, but having that process was incredibly valuable. And that's something that I didn't I didn't uh put into the numbers um when I was purchasing the business, right? But for anyone purchasing a business, yeah, you have to talk about the numbers of of how much you're going to pay. You should also be talking about what's the transition plan afterwards, because boy, having the the old owner uh kind of dialed in and really, really uh engaged during that time period makes it a heck of a lot easier.
SPEAKER_02Yeah, right. It's not just like I'm sailing off into the sunset. They want to ensure the viability and the continued success of the company.
SPEAKER_00Absolutely. And yeah, I think there are a lot of stats out there, and this is nationally, right? So it's it's gonna be different for every firm. But when people transit, when a company transitions, right, usually two-thirds of the clients stay, or someone leaves Northwestern Mutual or whatever the company is and goes somewhere else, two-thirds of the clients go with them, right? That's and that's just rough industry standards. Right. It's obviously a lot higher if if you have someone who's who's basically championing you, championing you, and it doesn't feel like a cumbersome process for the families you serve. So yeah.
SPEAKER_01Well, especially if that's what you know, the business is being valued and what the purchase price is, you know. Um, you can see a lot of deals going sideways, you know, if once when there's a transition, you know, the books aren't what they were or what they were you know thought to be. So yeah, transition is definitely important there. Um, what's the rest of the team look like? I know you got Paige, you got Zach. Kind of what's the team look like? And how do you think you're gonna build it out?
SPEAKER_00Yeah, so
Building A Team And Scaling Service
SPEAKER_00we we're a team of three now, three full-time employees. Paige and Zach. Zach is uh, I think you call him the CFP candidate where he's passed the test but still working on his hours. Page is a CFP. And together, you know, we serve all the families that uh we serve all the families at Sage together. But we're Paige helps out with some of the the back office, you know, we'll call it the business owner tasks as well, to kind of make sure that the business is firing on all cylinders. And Zach is much more focused right now. He's been with Sage for about a year on getting up to speed as a client service associate and uh and making sure that he's providing awesome value to all the families that we serve. The idea long term, right, is is to basically add more roles that make make life easier for the families that we serve. So as we get bigger, that probably means adding someone who's really focused on scheduling and paperwork. That's another thing. If if you're listening to this podcast and you're not in the industry, paperwork is is a big piece of the puzzle, right? And I think I did not understand that coming in. But uh, but as we continue to grow, we'll we'll we'll be looking for roles that to make our clients' lives easier and better. So someone in that role, maybe a uh CPA or an EA down the road. We'll see.
SPEAKER_02Well, and people that can actually thrive in the role too, right? There are people like I I I'm not gonna lie, I would rather beat my head off the desk that this computer is standing on than to try to like go through all the paperwork that it just takes to run a business, right? Like, thank God for people that are better at that than I am, because it just it it's not how my brain works, right? And so as companies evolve and and you kind of see the evolution and the growth, I feel like it is so important to get people in the right seats that really enjoy what they're doing. And I don't think you're ever gonna enjoy every piece of what you're doing all the time, right? But if the overwhelming amount of time you're really enjoying what you're doing, that that's the key.
SPEAKER_00Absolutely. And I think as a business owner, right, obviously having the right people in the right roles is really important, but also focusing on what we can do in this person's role today to help them grow into what they want to be tomorrow is really important as well. And I think in in this industry, right, if you're working at a fee-only firm, man, there there are a lot of different roles that you can have that can that can make you a better financial planner for tomorrow, right? No matter where you're starting.
SPEAKER_02Yeah. Yeah, absolutely. Are there parts of um, so like, you know, being at Dow, you've done this, you've got a team now, like you've you've done an unbelievable job in the last
Why Taxes And Insurance Matter
SPEAKER_02five years, obviously. Um were there some things that were surprising to you about maybe like what you really like about the planning? Um, and then maybe some things you're like, huh, I thought I was gonna be more interested in that, or you know, it's not my favorite part of like planning every day. Like, what are your thoughts on that?
SPEAKER_00Yeah. So I I'll go back to taxes as one of the areas that tax planning that we love to do, right? I think everyone on our team shares a passion for tax planning. For me as well, right? That's just it's something where a lot of times you can see some sort of tangible value. So it so I love that. One area that that I've been working on improving over the years is the insurance planning, right? And I think that is one of the by starting at a fee-only firm, right, and not being able to quote unquote sell insurance, you may not start with the same level of understanding that other people do on the insurance front. That's where where it's really important to partner with people like you guys, right, to be able to provide great value to the families we serve. But um, but that's one that definitely at the start, right? It's I think when you're young as well, maybe you're a little bit more risky on the insurance front, whether it's life insurance or other things. And as you learn more, you realize holy cow, this is really, really important. And just because I'm not doing X, Y, or Z doesn't mean that's not what most people should be doing, right? So um, and and then that's I will say that's kind of been a passion project of mine. And now we we we love talking about insurance.
SPEAKER_02Uh we love to hear that. Um, it is cool, but I I think you make a good point there, and I'm I'm glad that you mentioned that because a lot of times when it comes to insurance, Bottom line is you are literally talking about things that you hope never happen, right? Like you're hoping you never pass away prematurely or get disabled or get in a car accident or your house burns. Like all of these things, like insurance is leverage at the end of the day, but it's not the most important. But it is a super important part of the plan because if you don't have that figured out, a lot of times it doesn't matter what the assets or how much you've accumulated over the years, like all of that can go away pretty quickly. So yeah. As the insurance guys, I appreciate you bringing that up. Yeah.
SPEAKER_00We've what go ahead. I was just gonna say we've refined our process a lot on that front. And now we have one meeting as we're bringing people on where we we kind of call it the downer meeting, where we talk about insurance and estate planning, right? And we try to get people in the right headspace to say, hey, I know you haven't thought about life insurance before, but let's paint the picture on if something were to happen to one of you guys. What does that look like? Right. And we talk about everything. So I we we always joke that uh that that we're all way too comfortable talking about death after doing this for a while, but uh, but really important stuff.
SPEAKER_02Yeah, that's I think that's one of the most common questions Peter and I probably get are like, this is the stuff that you talk about every day. And I'm like, we're like, yeah, it's what we do. Exactly. Um but okay, no, that's that's really good. What uh for someone out there that's listening, that's like thinking about getting into this space, right? Maybe they're at Dow, maybe they're at John Deere. I don't know, they're at a big
Advice For Career Switchers
SPEAKER_02company like you were maybe. Um, what is something that you would say to them in terms of like maybe here's the right time or here's a piece that you should know uh before you make the jump?
SPEAKER_00Yeah, so a couple of different things. I think now there are, I'll I'll give you two. One of them is there are a lot of misconceptions about this industry, right? So I would encourage everyone to do their own research. And I think the best way to do your own research is to shadow someone, to actually, maybe you can't be in a client meeting, but can you go to a to a firm, maybe in your town or something like that, for half a day or a couple hours and really learn what's going on behind the scenes, right? What do these teams look like? What are the roles where I could potentially start it and actually learn about what is going to be required at that level? Um, so that's one thing. And then I think the second thing is start thinking about ways that you can provide value, right? I don't get me wrong, I I did focus on that some when I was still working, but I think if I would have spent more time saying, hey, for Dow Chemical employees, this is what I know right now. What's a list of 20 things I can do that can add value to their lives? I would have hit the ground running even faster. So use whatever whatever tools are in your tool belt right now. If you're working at John Deere, know their benefits, know the type of problems people have that live in those towns, right? Et cetera, and be ready to speak to them.
SPEAKER_02Yeah. Just the one, it's just the one that came to mind, Peter. I saw you smirk down there.
SPEAKER_01I love it. I'm just like, that's the first one that comes to mind with uh Dow. I love it. Good old looking brand. Um Ethan, any other golden nuggets you have before jumping on here?
SPEAKER_00No, I just just know uh we're our our phone is always open if people are looking to make the the transition uh from a different career, or maybe you're you're in college right now and looking to become a financial advisor. I had a lot of help to get into this industry, a lot of people that lent their time, and we're always we're always happy to do the same. So appreciate the time here, guys.
SPEAKER_01Yeah, you bet, Ethan. And for those who maybe want to reach out or follow along, what's the best way they can?
SPEAKER_00Yeah. You can go right to our webpage, so SageWealthplans.com and submit
How To Connect With Ethan
SPEAKER_00a uh and just send us a message. We'll get back to you or or uh reach out to me directly on LinkedIn and uh we're we're happy to answer any questions that people have. Awesome. Well, Ethan, thank you so much for your time today. We really appreciate it. Thanks, guys. Thanks, man.