It was 1984 and my new business partner and I were watching the ink dry on the employment agreement we'd just signed to launch a partnership that would last 14 years.
As partners, we would build the Metro-D.C. firm of Malgoire Drucker Inc., operating independently of any wirehouse, insurance company or independent broker-dealer. We would register with the SEC, hang out our shingle and figure it out as we went along.
There's a lot to be said for combining complementary skill sets when you have little experience. Malgoire says she learned about getting organized and creating internal systems from me. I learned about marketing from her. Together-somewhat slowly and painfully-we created a thriving business. Ten years after inception, I was finally earning the purchasing-power equivalent of my last "real job's" high-five-digit salary.
Why did it take us ten years of hard work just to earn enough to meet our personal financial needs? And what's available to new planners today to cut this time-often by half or more?
Nowadays, an energetic planner can get up and running in three to five years, earning at least a low, six-digit income, and not all that much has changed to make this possible. The industry has simply built a body of knowledge around starting an independent advisory firm and, independent planners-being the sharing souls they are-have disseminated that knowledge freely over online forums and at conferences and study group meetings.
Sheryl Clark's case is illustrative. Clark owns Tucson, Ariz.-based Sunrise Financial and in 2001-her first full business year-she grossed $136,000, taking home $115,000. "For 2007, my gross was $184,000 and I will net $160,000," says Clark. What's more ... Clark does this in only three days a week, with eight to ten weeks of vacation each year. She works at home, outsources rather than hires and creates from her business the lifestyle she desires.
The proverbial "$64,000 question," then, is how did she do it? And, in answering that, we see the various resources the industry has produced to help new entrants run-not walk-up the learning curve. Today, as compared to the 80s when our industry produced a "boom" of its own with baby boomers like me looking for a more rewarding profession, new planners find the help they need from advisor networks, professional associations, study groups, B2B companies and willing mentors.
Advisor Networks
No single planner's success is likely to be the result of just one influence, but Clark attributes her success primarily to "Cambridge," or the Alliance of Cambridge Advisors Inc. (www.cambridgeadvisors.com/web/pages/home/), the 1995 product of veteran advisor Bert Whitehead that trains fee-only advisor members across the country in the concepts and processes pioneered by Whitehead since 1972.
"Actually, I started in planning working directly for Bert in 1991," says Clark. "He sent me through the Cambridge Alliance's 'beta' training class in 1996," and by 2000, Clark was fully ensconced in the Cambridge experience. "Cambridge members don't have to recreate the wheel. We learn how to price our services, how to set up our files and handle appointments and are even given a proprietary software system."
Clark, now well beyond "newbie" status, retains her Cambridge membership for its other benefits like a client newsletter ("I hate to write") and its 'Directed Portfolio' guidance. "Two reasons I can handle 48 full retainer clients, work just three days a week and include tax return preparation in my service," says Clark, "is because of Cambridge."