My Journey to Starting a Fee-Only Financial Planning Firm (Part 2): The Adventure Begins

Updated: Jul 27, 2020

With my first blog post out of the way, instead of waiting another 6 months, it only took a little less than 4 weeks to publish Part II, The Adventure Begins. This is the second installment of my 4-part series, My Journey to Starting a Fee-Only Financial Planning Firm.  Actually, I fully intend to make this blog thing more of a weekly occurrence.  In due time!  The challenges of managing a business, establishing roots in a new city, traveling for the holidays, planning a 15-year high school reunion, and raising a 6-month old have taught me to cherish whenever there is a break in the action.  So 4 weeks doesn’t seem so bad when I frame it that way. 

Part II: The Adventure Begins

My first full-time job out of college began with a well-respected brokerage firm, A.G. Edwards & Sons. Today it is better known as Wells Fargo Advisors by way of the bank bailout of Wachovia Securities back in 2008. Yeah, I went through a merger, a bailout, and began my career as an advisor during the Great Recession. Exactly how I envisioned it for myself!

As a once stereotypical Millennial, I spent a good part of my 20s wrestling between adulting and seeking a good time. In other words, I really wanted to be an adult. Yet I felt like an imposter because I had other priorities. Pre-wife, I was perfectly content going out with the guys and getting into a bunch of nonsense. Responsibilities? Sure, when the mood struck me. I did buy my first home at the age of 25.  Thank you, First-time Homebuyer Tax Credit! So a part of me was trying to be an adult, but honestly, beer-thirty was way up on my list of to-dos every weekend.  It’s quite possible I had some maturing to do.

Funny how times have changed now that my wife, Emily, and I have a daughter.  I actually feel like we finally sit at the “grown ups table” now.  In fact, I don’t consider myself a fraud anymore. Nowadays I am not the least bit intimidated providing very critical financial advice to someone twice my age.  So I finally did mature.  However, I was much less confident at the beginning stages of my career. 

In total, I spent 2 years with A.G. Edwards, at first as an apprentice, and then about 6 months after Wachovia Securities acquired A.G. Edwards, I was forced into the Advisor Trainee Program and lasted for another 18 months.  The trainee program was a 2-year contract that started out paying $3,000/month for 6 months, then stepped down to $2,000/month for the next 12 months and $1,500/month for the remaining 6 months.  Eventually, after 2 years your monthly production was your income.  So if you didn’t produce you made $0.  Living on that kind of income, I racked up quite the credit card balance, especially with all those fun nights out.  Oh, by the way, be sure to read your contract carefully.  Mine stipulated that if I ever left A.G. Edwards for another competitor that I owed the company up to $60,000 in trainee costs for all that invaluable sales training I received.  Interestingly enough, once I moved over to the wonderful world of retail banking, I received a very welcoming note from my former employer courtesy of Fed Ex.  I was so excited to open my package.  And then, I opened it.  WTF?  They want me to pay back $60,000 in training costs.  Clearly, a large profit-making machine, like Wells Fargo, needed to protect their interests from a 25-year old financial advisor.  No doubt my uniquely developed talents would allow me to earn the kind of living that could easily pay back a $60,000 lump sum.  $1,200 later and a letter from my attorney, the problem went away.  That was hard lesson number… I think I lost count by about this point in my career.  I took a lot of lumps back then.

Looking back I have to laugh.  I was a young fearless boy who thought he was ready to conquer the mountain.  Why not?  I worked for a well-respected brokerage firm with my very own downtown office.  However, as time went by my ego began to wither with every little setback, and eventually, I left A.G. Edwards feeling like a scolded dog with his tail tucked between his legs.  Most people think a financial advisor is naturally confident and can just will their way into success.  It’s the fable many of us are told by the top salesperson in the office.  

Sure that guy can do it.  He makes it look so easy.  It gets you thinking maybe there is something wrong with me.  It’s no wonder I was insecure.  Quite frankly the training I received was subpar at best.  The lack of on the job coaching and skills development might help explain why the youth barrier in the financial services industry is such a huge problem.  All I have to say now is thank God for organizations like XY Planning Network.  

Unfortunately, most of the big brokerage firms and insurance companies still emphasize outdated client acquisition strategies in today’s quickly evolving digital age.  Outbound telemarketing, networking at organizations where there are already 4 other advisors, begging friends and family for referrals, or glad-handing everyone at a cocktail party is not a very efficient way to get the number of clients needed shooting out of the gates when you have production quotas.  Many of those prospecting strategies take several years to produce any meaningful results.  It’s even longer for a recent college grad.  Yes, there are superstar exceptions to the rule, but even the brightest most charming people often need to join an established team or family business as a way to break into financial planning. 

Let’s be honest about why that is.  Who wants to trust a 20-something year old with their life savings?  Well, I thought everyone did.  Although I had good reasons to think I could be successful.  At the age of 20, I got my foot in the door as an intern at Smith Barney.  I was originally hired to cold call 10 hours a week for 1 advisor, but after 2 summers I finished my internship assisting 5 advisors and working 40-hours a week.  During that time it seemed prospects were very receptive to my pitch over the phone.  In turn, I believed my early success would translate to even greater success once I became an advisor.  Besides, everyone I knew would want to work with me because I am such a great guy.  Wait, you mean other financial planners know the same people I know and are way more qualified and experienced?  Oh, shit….  There goes about half of my original 200 friends and family target list.  Things all of a sudden just got a lot harder.  Of course my friends and family will refer me all sorts of business.  That’s weird.  Apparently, they aren’t as confident in my ability to manage money.  Go figure.  Okay, so….  Now my list just got cut down to about 40 people.  Maybe if I pester enough of my parents’ friends I can convince some of those people to do business with me.  It’s all about networking.  Didn’t you read “Never Eat Alone?”  Plus it is all just a numbers game.  Right?  Wow, I sure burned through those names quickly.  I must be really bad at overcoming objections because my opportunities are shrinking by the day.  This job is A LOT harder than I thought.  Time to smile and dial!  Now that I am a “financial expert,” cold calling should be a piece of cake.  Am I the only person that loves hearing the click of someone hanging up on them?  About 5,000 names later, cycling through every list you can think of, and hearing the phrase “not interested” more than I care to remember, I had a handful of appointments to show for it.  The fruits of all those efforts yielded $2M in assets under management, which is not enough when that generates a $30,000 revenue stream and the company you work for takes 65% of it.  Netting me $10,500 annually.  Woof!

My evolution went from young promising advisor to a completely deflated unemployed job applicant.  I am ashamed to admit it, but about 5 weeks before my departure from A.G. Edwards I began scheduling “off-site appointments.”  This allowed me to go home, update my resume, apply for any job that had a stable income, and interview whenever the opportunity presented itself.  I wasn’t too far off from how my branch manager saw things going.  Actually one week after the first interview with my eventual employer, Huntington Bank, my former manager gave me two choices: 1) try to hang on for dear life at Wells Fargo and get paid jack squat, or 2) get a 2-week head start to look for another job while still on the company payroll.  My choice was simple.  Door number 2, please!

The point I wanted to drive home with Part II of this series is that being young and naïve is where most of us begin our careers.  The challenge is overcoming the first time the real world smacks you square in the face, and then kicks you again while you are down, in areas you really don’t want to be kicked.  Quite frankly it can be a jarring experience.  Especially to any college grad that is accustomed to ongoing success their whole life.  Those school years are a time when teachers and coaches provide constant feedback about how great you are.  However, as many wise adults will attest to, the real world operates much differently.  Feedback? You are lucky to ever get it, and if you do, it’s rarely the type you want.  Fortunately, the growth and learning from failing at my first job gave me the grit and determination I needed to start being successful.  I am of the belief that we all have a life-long journey to fulfillment.  It’s unfortunate that more of us don’t take the time to pause and reset our course.  No path is created the same and it is unfair to think otherwise.  I also learned the magic bullet we all crave doesn’t exist.  The closest thing to a secret formula I can impart upon any struggling professional is to be able to recognize when your life is at a crossroads, and then take decisive action when the moment matters.  Perseverance, a strong desire to learn, and passion will pay dividends when the timing is right.  Yet, not every decision is going to be “right.”  Doing nothing is far often a greater failure than taking a turn down an unfamiliar path.  So rather than let the grips of fear paralyze you, take a chance and learn from a life full of mistakes.  Use your failures to make you stronger.  Sounds easy enough. I wish it were.  It’s why I share my journey.  As cheesy as it sounds, if I only inspired just 1 young financial planner to follow their own path, then I accomplished my goal in paying it forward.   

Up next, Part III of this series, titled, One-Step Back, Two-Steps Forward.  A bird's eye view of the 6.5 years I spent at Huntington Bank.  A place I owe a great debt of gratitude. 

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