Michael is 43. Director of Operations at a large tech company — W-2, strong base salary, the kind of role that requires managing complexity across teams without ever really stopping to think about his own financial complexity. His wife Claire works part-time as a nurse. Two kids in middle school. They own a home. They've been saving for years.
By every measure they look like people who have their financial life together. They'd had a financial advisor for almost a decade. A well-known name. A big firm. Everything looked fine until Michael started asking questions that took days to get answered, and sitting in annual meetings that were always about the market and never really about him.
The letter from the IRS arrived in the spring. Underpayment penalties. A balance due that Michael hadn't seen coming, on top of a tax bill he'd already paid. He called his financial advisor. It took two days to get a response. The explanation, when it came, was something about realized gains in the portfolio that hadn't been communicated. Nobody's fault, just a coordination issue. Michael hung up the phone and sat with a feeling he'd been carrying for a while but hadn't been able to name. Something was wrong. He just didn't know how wrong.
"Something felt off. I just didn't realize how bad it actually was."
Case Study / The Fiduciary Audit
A tech professional who had a financial advisor for a decade and discovered the gap between what he was paying for and what he was getting.
"Something felt off. I just didn't realize how bad it actually was."
The relationship hadn't started with a choice. His company used a large national brokerage firm to administer its employee stock plan. When RSUs vested, shares landed in an account at that firm automatically. An advisor reached out. He already knew Michael's name and could see the account. The conversation felt warm and informed — not like a cold sales call. Michael signed up for full investment management. It felt like the natural next step. Convenient isn't the same as right for you. It just feels that way until someone looks closely.
Michael was paying between 1% and 1.5% annually on a portfolio that had grown to over $600,000. That's $6,000 to $9,000 per year. He knew a fee existed. He didn't know the exact number, couldn't find it clearly on his statements, and had never had anyone show it to him as a single line item. The lack of a clear answer to "what am I paying?" is itself information.
When the holdings were examined, a pattern emerged. Several positions were proprietary funds — products manufactured and sold by the same firm managing his money. The difference between a proprietary fund charging 0.75% annually and a comparable index fund charging 0.05% sounds like nothing on a monthly statement. On a $600,000 portfolio over 20 years at 7% growth, that difference compounds into roughly $180,000 in additional fees — for funds that historically underperformed the lower-cost alternatives they replaced.
There was also a whole life insurance policy that had come through the same advisory relationship, referred internally and placed through an affiliated insurance agency. The advisor earned compensation on the referral. Michael had no way of knowing that. The policy didn't fit his situation. He needed straightforward coverage — not a permanent savings vehicle with a cost structure he'd never been shown clearly.
And then there was the tax problem. The portfolio had been actively managed — funds rebalanced, positions traded, distributions taken. Every one of those events created taxable gains. And every year those gains went unreported to Michael's CPA because nobody told him they existed. The advisor managed the portfolio. The CPA handled taxes. Neither of them ever spoke. Michael was the only person who touched both relationships, and he didn't know what to pass along because he didn't know what was happening inside the account.
WHAT WE FOUND WHEN WE LOOKEDWHAT CHANGEDThe proprietary funds and individual stock picks were replaced with a straightforward, low-cost, diversified portfolio. Positions with embedded gains were unwound gradually — realizing gains over multiple years, harvesting losses to offset where available, restructuring in stages to avoid a large tax bill in a single year.
The whole life policy was replaced with a 20-year term policy sized to what Claire and the kids would actually need — lower premium, clear purpose, no hidden cost structure. The cash value from the old policy was preserved and redeployed into the investment portfolio.
Michael's CPA received a phone call. An introduction, a communication channel, and a standing practice: any realized gains or taxable events in the portfolio get communicated before they become a problem on a tax return. That gap is now closed. It requires a relationship and a phone call. It's also something a fee-only planner has every incentive to do because the only job is making things work better for you.
$180K
FEE DRAG OVER 20-YRs
THE NUMBERS$6-9K
Annual AUM Fees Eliminated
Zero
IRS Underpayment Penalties -after CPA coordination
The portfolio is simpler. The costs are lower. The tax picture is clean. The insurance fits. Michael no longer checks individual stock prices because he doesn't need to. Claire understands the plan now too. She knows what they have, where it's going, and what's in place if something changes.
"I wish I'd asked these questions ten years ago. But I'm glad I finally asked them."
The relationship had started out of convenience. Nobody had done anything wrong. It had just never been the right fit. And the cost of that misfit — in fees, in taxes, in a portfolio that didn't reflect his goals — had been compounding quietly for years.
WHAT WE MEASURED
—$180,000 in identified fee drag over 20 years — 0.70% expense ratio difference on a $600,000 portfolio at 7% growth, compounded annually
—$6,000–$9,000 per year in AUM fees eliminated — returned to the plan annually
—Whole life policy replaced with 20-year term: meaningful annual premium savings redirected into the investment portfolio
—Cash value from whole life policy preserved and redeployed where it can actually compound
—IRS underpayment penalties: eliminated. CPA coordination now standard.
—For the first time in a decade of paying for financial advice: an actual plan
WHAT WE MEASURED · WHAT WE CAN'TWHAT WE CAN’T MEASURE
—Claire understanding the plan for the first time in a decade of paying for advice
—Michael not checking individual stock prices because he doesn't need to
—The annual meeting that used to be about the market and now is about them
—Asking the questions ten years earlier would have cost nothing. Not asking them cost a decade.
Priceless.
Knowing what you're paying for. Knowing it's working. For a family with two kids in middle school and a part-time income, that clarity matters more than any single number in here.
FIRST 30 DAYS
Map the full picture across both careers: RSU vesting schedules, 401(k) holdings, old rollover accounts, insurance coverage, cash flow, and combined tax situation. Identify what’s urgent, what’s a gap, and what can wait. Get aligned on the shared goals: house, family, financial flexibility.
WHAT THE FIRST 90 DAYS LOOKED LIKEDAYS 30-60
Roll old 401(k)s into Rollover IRAs. Rebuild current 401(k)s into low-cost funds with no bond drag. Build RSU sell strategies for vesting schedules. Enroll both ESPPs and set up sell systems. Right-size the emergency fund. Set up the flex/fixed cash flow system and quarterly balance sheet.
DAYS 60-90
Lock in 30-year term life policies for both and address disability coverage gaps. Restructure the taxable account as a revocable trust. Max and invest the HSA. Everything core is running. Estate plan referral underway on a separate timeline.
Questions people in their situation are asking
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Ask directly — and ask them to put it in writing. A fiduciary is legally required to act in your best interest at all times. Many advisors at large brokerage firms operate under a suitability standard, which means recommendations need to be appropriate but not necessarily optimal. The distinction matters especially when proprietary products and insurance referrals are involved.
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Not necessarily. The fact that a firm custodies your equity plan doesn't mean they're the right advisor for your full financial life. It means they're convenient. Before converting a custody relationship into a managed relationship, understand exactly what you'd be paying and whether the advisor is a fiduciary.
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Fee-only advisors are paid exclusively by their clients — no commissions, no revenue from products. Fee-based advisors charge a fee but can also earn commissions from products they sell. An advisor who earns more when you buy a specific product has a financial reason to recommend it regardless of whether it's the best choice for you. Fee-only eliminates that conflict entirely.
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The mechanics are straightforward — you sign a transfer form, the new custodian handles it, and accounts move within a few weeks. What takes care is the tax planning around positions with embedded gains. Selling everything at once in a single year could create a significant tax bill. The right approach is to identify which positions have gains and design a thoughtful strategy to unwind them while harvesting losses to offset gains where available.
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More than a portfolio. Goals with timelines, retirement projections with real numbers, tax strategy, insurance review, estate planning, cash flow structure, and a way to track progress over time. If your advisor meetings feel like market updates and portfolio reviews, you may have investment management — valuable — but not financial planning, which is different.
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More than it looks on a monthly statement. On a $600,000 portfolio, 1% is $6,000 per year. If that portfolio also holds proprietary funds with a 0.70% expense ratio premium over comparable index funds, the combined drag compounded over 20 years at 7% growth approaches $180,000. That's a verified calculation — not a hypothetical. It's also a number most people have never been shown.
IF THIS SOUNDS FAMILIARIf you've had a quiet feeling that something isn't quite right, that feeling is worth paying attention to.
For Illustrative Purposes Only. This case study is a composite illustration created for educational and marketing purposes. It does not represent the experience of any specific client. Names, demographics, and outcomes have been constructed to reflect realistic planning scenarios and do not correspond to any actual individual or household.
Fee Drag Calculation. The $180,000 figure is based on a 0.70% annual expense ratio difference applied to a $600,000 portfolio over 20 years at 7% annual growth, compounded annually. This is a mathematical illustration, not a guaranteed result. Individual outcomes vary.
No Guarantee of Results. Financial planning outcomes depend on a wide range of personal, market, and economic factors. The results described are not guaranteed and may not be achievable for every client.
Not Legal, Tax, or Accounting Advice. The information presented is general in nature and is not intended to constitute legal, tax, or accounting advice. Consult qualified legal and tax professionals for guidance specific to your situation.
Registration and Regulatory Status. Dynamic Financial Planning is a registered investment adviser with the State of Arizona. Registration does not imply a certain level of skill or training.
Compensation Disclosure. Dynamic Financial Planning operates on a fee-only basis. The firm does not receive commissions, referral fees, or compensation from third parties. All fees are disclosed in the firm's Form ADV, available at adviserinfo.sec.gov.
Fictional Client Disclosure. Any quotes or statements attributed to clients are fictional and included for illustrative purposes only.