Saying the Quiet Part Out Loud
By John H. Robinson, Financial Planner (September 2025)
Since I shared the news that Financial Planning Hawaii (FPH) will soon be filing to operate as its own stand-alone, SEC-Registered Registered Investment Advisory firm (RIA), I have been touched by the many congratulatory wishes I have received. My impression is that there is universal support for this decision. At the same time, I sense that this support arises primarily out of trust built up over decades, and that not everyone fully understands the purpose or benefit of the change. It is important to me that you do.
Here are a 8 questions that a few clients of asked in this regard. The answers may help bridge the knowledge gap.
Will there be any decline in the safety of our investments by making the change from a much larger firm in JW Cole to Financial Planning Hawaii?
There is no change in the safety of your accounts. It is neither more nor less safe moving from JW Cole’s RIA to FPH’s RIA. In both instances, the custody of your funds rests with Charles Schwab. You never made checks payable to JWC and you will not make checks payable to FPH or to me. The only authorization JW Cole had to directly access your funds was to deduct the quarterly advisory fees as authorized in the JW Cole asset-based fee agreement. Thes same is true for FPH. FPH is only authorized to deduct the quarterly advisory fees as authorized in the FPH fee agreement. For the handful of clients whom have asked to be direct-billed, that will carry over to FPH as well.
Eight Reasons Working With An Independent RIA Is A Great Choice For Private Clients
Five Key Benefits of Independent Financial Advisors
What about Compliance oversight? Previously, you were supervised by JW Cole. In your email you mentioned that you are responsible for your creating your own Compliance procedures. Does that mean that you are responsible for supervising yourself?
No. Instead of being supervised by J.W. Cole, we now report directly to the SEC. The SEC has very strict reporting, disclosure, and archiving requirements, and they make unannounced audits. The SEC specifically prioritizes newly registerd RIAs for in-person audits within the first 18 months to ensure that the firm is on solid footing and to identify any risks. Based on the results of the first audit, a risk level is assigned to be applied to future examinations. They do not mess around.
Because of the regulatory complexity, FPH has enlisted a third party Compliance officer to help ensure that our firm-specific business model conforms with the SEC’s requirements and to ensure that we do not run afoul of rule changes in an ever-shifting regulatory landscape.
SEC Audit Requirements: Essential Preparation for RIAs
Observations From Examinations of Newly-Registered Advisers
What Could Cause Your RIA Firm to Undergo and Audit?
In your announcement you cited autonomy and greater autonomy over your business compliance rules as a benefit of making the change. What do you mean by this?
To be clear, JW Cole was far from an oppressive Compliance environment. I previously left Smith Barney Citigroup and then Wells Fargo because those firms prevented me from writing and publishing and restricted me from developing a financial planning centric business model. The people in JW Cole’s Compliance Department have been the opposite of that. The have been extremely accommodating. They trusted me to write content that was not salesly and that steered far away from regulatory conflicts, and they rarely rejected or amended my content submissions. They gave me the entrepreneurial freedom to engage in outside business activities including creating my software company, Nest Egg Guru, and my Hawaii-RIA for flat-fee financial planning.
The two main areas in which I have been held back in my business development aspirations pertain to communicating over social media and to controlling fee billing. Specifically, it is becoming increasingly important in the financial planning space to build brand awareness through engaging with consumers on social medial platforms such as LinkedIn, Instagram, TikTok, and YouTube. In some cases, JWC would permit me to engage on those platforms, but I had to pay for extra compliance supervison. In other instances, such as TikTok, participation was not permitted. Again, I do not begrudge JWC for this policy. If I was JWC and I had to supervise thousands of advisors, I would not permit it either. At issue, is that allowing me to participate in these forums and to permit other advisors at the firm would put JWC in an untenable positions.
Similarly, JW Cole has been very accommodating me to implement my own blended, tiered asset-based fee structure. Because my fee structure tends to be on the low-side for the industry, it is unlikely that his would cause a regulatory problem for JWC. However, there are a number of instances in which I wanted to charge lower than the JWC’s published minimums. For instance, I have always wanted to charge 0% for rank and file employees in self-directed 401(k) accounts as a favor to the business owners who are my clients. I also have always wanted to charge a very low asset-based fee for corporate cash accounts for my business clients’ accounts. As with the social media marketing issue, JWC be put in a position where the rules of engagement for me are different from all the other advisors of the firm.
The ability to have greater freedom and autonomy in these areas is very appealing to me. Similarly, the ability to be an early adopter to new technologies including AI (to the extent permitted by the SEC) is exciting to me, and is much more challenging for a large RIA that is tasked with overseeing hundreds of advisors with different business philosophies to manage.
Will our fees be higher after the change?
No. In no instances should our client’s fees be higher after the change to our own RIA. In most cases, they will be exactly the same because we are simply mapping over the fee schedule that we created at JWC to the new FPH fee agreements. In some cases, such as the examples mentioned above, the fee schedule will lower.
Regular readers of my content will know that I frequently cite Costo-CEO Emeritus, Jim Sinegal’s mantra – There are two types of businesses – those that find way to charge their customers more and those that look for ways to charge clients less. Costco choose to be the latter. This is my mantra for Financial Planning Hawaii too. As with Costo, it makes good business sense for us too.
Why are you dropping your brokerage and insurance licenses and how does this affect us? (Solving the “Two Hat’s” Problem That Arises From Dual-Registration)
My brokerage and insurance licenses are an artifact of how I entered the business 37 years ago. I began my career as a FINRA Series 7 registered rep (stockbroker) in 1989. I started out by earning commissions from the sale of stocks, bonds, and mutual funds. I obtained my insurance license around the same time so I could sell annuities, life insurance, and long term care insurance. Financial planning was barely even a thing at that time. In 1996, I obtained my Series 65 which allowed me to get paid for financial advice rather than securities sales. Over the ensuing decades, my business became increasingly advice-centric and I expanded my knowledge base far beyond just investment advice and eventually evolved into comprehensive financial planning.
Today, virtually all of my revenue is from financial planning advice. The only brokerage revenue I receive stems from recurring trailing commissions paid on variable annuity contracts with certain living and death benefit riders in the late 1990s and 2000s and a few 401(k) plans I oversee that pay .25% trailing commissions.
The reason for my desire to drop my insurance licenses is that the regulatory standard of conduct to which brokerage and insurance sales people are held is lower than the fiduciary standard to which financial planners are held under the Investment Advisers Act of 1940. In all new client communications and in disclosure all over my website, I am required to disclose that I can where two different regulatory hats – the fiduciary hat when I am a financial planner and the best interest/ suitability hat when I am acting as a brokerage or insurance sales rep.
I have grown to loathe that. Those licenses were necessary to get started in the industry 40 years ago, but they are albatrosses today. I am a financial planner, and I want to be held to a fiduciary standard of conduct at all times. I introduced this concept in my September 2024 FPH Blog post aptly titled, Why I am Planning to Drop My Insurance and Brokerage Licenses.
The worst of both worlds? Dual-registered investment advisers
Wearing Two Hats Triggers Compliance Headaches For Advisors
So what is going to happen to the clients who have legacy variable annuity contracts and/or 401(k) mutual fund platforms?
Fortunately, there is a solution that will allow me to continue to provide advice on those contracts as a fiduciary under FPH’s RIA. This remedy is available with a big assist from Mutual Group. Mutual Group is a broker-dealer that has developed a unique program to allow dual-registered advisors like me to drop our brokerage license by having them step in to serve as the broker-dealer of record. In that capacity, Mutual Group will receive all trailing commissions paid on the annuity contracts and 401(k) mutual fund platform. However, to ensure that our clients still receive ongoing guidance, Mutal Group in turn will hire me to give financial planning guidance to the clients. The fee that Mutual Group will pay me is a fraction of what I would receive if I kept my brokerage license, but it solves my problem and ensures that our clients still get guidance from me. I do not yet know the actual compensation rate, but it will be disclosed when that is finalized.
Here is a link to Mutual Group’s Platform
Will you profit from the change?
In addition, to the entrepreneurial autonomy mentioned previously, I do expect to profit from making this change, though the amount is not entirely clear yet. Last year, JWC received between $200,000 and $250,000 of the revenue I generated. In return, I received compliance supervision, fee-billing services, cyber security planning assistance, regulatory fees, licensing, and CE administration, along with the opportunity to interact with some the best, most sincere, and supportive business partners I have ever known.
Upon my departure, all of that revenue that was collected by JWC will now go to FPH. However, I now have to pay for third party compliance, third party IT services, state and SEC investment advisory licensing and CE, and a host of applications including fee-billing and performance reporting software. Nonetheless, I do not mean to hide the existence of a profit motive. As noted, I also am adding new initiatives to reduce or eliminate certain fees that I was required to charge to clients.
What other benefits will you get from making the change?
Along with dropping the insurance and brokerage licensing, I believe being our independent RIA enhances our credibility in the market place. Until now, when someone wanted to check on my background through the SEC IAPD website for through FINRA’s Broker Check, they would see that, even though I brand my practice with Financial Planning Hawaii, I appear as a 1099 employee under JW Cole. Once the change is officially made, we will be listed as a stand alone RIA and all the data about our business model and our assets will be our own.
It is also timely with respect to succession planning. As everyone surely knows by now, I do not plan to retire, but we are very definitely intend to evolve FPH into a multi-generational family business with Brody and perhaps one or two my other progeny joining as well in the next decade. Not that JWC would have hindered this, but it is much cleaner and easier to operate as a family business on our own.
Beyond these, this change has reinvigorated my enthusiasm for financial planning. We are at the beginning of an inflection point in our industry that is being driven by AI. I am extremely excited about the opportunity to harness AI to dramatically enhance our client experience. I am sincerely grateful to all of you for giving me this opportunity and I cannot wait to show you what we have planned!
