Episode summary
Ep 491: Earning Premium Planning Fees By Demonstrating Hard-Dollar Tax Savings For Business Owner...
Financial Advisor Success (Kitces)
· · 1 hr 30 min · Hosts: Michael Kitces, Adam Van Deusen · Guests: Patrick Lonergan
Summary
Patrick Lonergan explains how Vital Wealth built a premium advisory model for business owners by tying planning fees to concrete, hard-dollar tax savings. He says the firm serves roughly 100 client households, generates $2.5 million in annual advisory fee revenue, and can charge consulting fees north of $70,000 because clients often see six-figure tax reductions that make the fee feel small by comparison.
A major theme is that business owners need advice that goes beyond portfolio management. Patrick describes a tiered planning framework that starts with cash flow, then tax, then investing, and finally protection. On the tax side, he breaks opportunities into levels: basic administrative optimizations like QBI and entity choice, funded strategies such as retirement plans, and more advanced structures like micro captive insurance when the economics justify the complexity.
He also traces how his business evolved from his earlier real estate work, through an insurance-channel start at New York Life, to a more independent RIA and consulting structure. Along the way, he emphasizes persistence, delegation, virtual staffing, and the shift to serving entrepreneurs remotely, which expanded the firm beyond Clinton, Iowa and helped turn satisfied clients into referral sources.
Key takeaways
- Patrick Lonergan says Vital Wealth targets business owners with net income north of $2 million because that is where tax planning can move the needle meaningfully.
- The firm charges a $10,000 roadmap fee and then layers ongoing consulting around cash flow, tax, investing, and protection.
- Patrick says his firm’s average tax savings was $280,000 in 2023, which helps justify annual fees north of $70,000.
- He separates tax planning into levels, from simple QBI and entity-structure fixes to advanced tools like cash balance plans and micro captives.
- Patrick argues that for entrepreneurs, deferring taxes can be valuable because retained cash can be reinvested in the business at a higher expected return.
Notable quotes
“we're not afraid to say that we will save you at least 2x what you're paying us or we'll give you your money back”
“I need to get rid of all the twos and threes and spend my time on three, fours, and fives”
“level one is the IRS gives us guidance, but it doesn't take any investment”
“if I can spend $30,000 on a part-time kid straight out of college, basically uh I think they were full-time”
How the episode opens
Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with financial planner, speaker, and consultant Michael Kitsus to hear stories of how leading financial adviserss navigated the inevitable challenges that arise on the path to success and get insight from leading industry consultants about how to break through to the next level in your advisory business. And now, here's your host, Michael Kitsus.
Welcome everyone. Welcome to the 491st episode of the Financial Advisor Success Podcast. My guest on today's podcast is Patrick Lteran.
Patrick is the founder of Vital Wealth, an RAIA based in Clinton, Iowa that generates $2.5 million in annual advisory fee revenue for approximately 100 client households. What's unique about Patrick, though, is how his firm is able to charge its business owner clients annual consulting fees north of $70,000 by offering tax planning strategies that frequently save them hundreds of thousands of dollars. In this episode, we talk in depth about how Patrick is able to offer his clients significant hard dollar tax savings by first taking advantage of what he calls level one administrative and bookkeeping opportunities such as maximizing the QBI deduction or choosing an optimal business structure.
How Patrick then moves on to level two opportunities where some investment is required on the part of the client. For example, defined contribution and defined benefit retirement savings plans. and how Patrick also considers level three strategies that combine sections of the tax code to create tax efficiencies.
For instance, by compliantly setting up a micro captive insurance company. We also talk about how the tax-saving strategies Patrick puts to use are particularly valuable for entrepreneurs who can reinvest in their business, potentially generating profits that exceed any deferred tax burden. How Patrick assesses tax planning opportunities with an eye towards cash flow management for his clients to ensure both their personal and business spending needs are still being met.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- premium planning fees
- tax strategy
- business owners
- cash flow
- client referrals
Companies and tickers mentioned
- Vital Wealth
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Financial Advisor Success (Kitces)
-
Helping Clients Who Want A Retirement They Can't Afford - Kitces & Carl Ep 203 -
The Top Factors To Consider When A Client Plans To Move Abroad, With Ashley Murphy -
Ep 515: Crafting Deeper Client Relationships To Drive Loyalty, Referrals, And Gain Career Flexibi... -
Key Rules And Pitfalls To Execute Qualified Disclaimers Successfully, With Dave Haughton -
Ep 514: Optimizing A $160M AUM Solo Practice For Client Impact Over Scale with Nick Ibello -
Value-Based Pricing And Charging As Much As The Market Will Bear - Kitces & Carl Ep 202
Financial Advisor Success (Kitces), this episode and its artwork belong to Michael Kitces. Octagon is not affiliated with the show; this page is an independent summary.
