Dan Taylor says his new program will shake up the financial services industry.

North Carolina Advisor Dan Taylor intends to change the investment world, one professional program at a time.

His latest-actually first-industry-shaking effort is called the Divorce Mediation Program (DMP) and it grows out of his "desire to escape the stifling regulation and increased commoditization of the financial services industry" and "a deep desire to bring an alternative structure to the family law system in the United States and Canada."

What the DMP does is give the advisor a blueprint for how to go about charging the client for an entirely new suite of services that he or she will render.

Taylor's marketing materials boast that "the DMP-structured via seminar, workbook, book (divorceconversation.com, Palisade Business Press, Watertown, Conn.) and Web site-provides a viable, new capability for individuals who specialize in financial planning, law, or other counseling industries. This process provides a profitable new capability for these individuals that may be of great value in today's economic times. In addition, it affords an economical and efficient divorce option that has industry-transforming potential."

Explains Taylor, "Most advisors might not think there is anything new under the sun. But that only means they are thinking inside of the box."

Taylor himself has used portions of his DMP program with great success, receiving large, upfront payments for his services that are not in any way associated with financial services fees or other compensation. He has done so by emphasizing the non-confrontational nature of his financial advisory skills and the advantage of a negotiated-rather than litigated-solution.

In one large case that he handled recently, Robert and Debra Davidson (not their real names) were in the second year of a divorce that had created nearly $150,000 in legal bills and immeasurable amounts of emotional anguish. Robert, a successful surgeon, and Debra, a master's level psychologist, had created over their 30-year marriage a $6 million marital estate with stocks, bonds, real estate, art, fine wines and various business interests.

Debra's attorney referred her to Taylor and his partner for a second opinion on a proposed settlement from her husband's attorney. Debra felt that her husband's attorney was manipulating him to prolong the litigation. Using a process he calls the Equitable Distribution Solution Tool, Taylor determined the proposal was not equitable.

Debra felt if they could sit down together without the lawyers, they might be able to work out their financial and marital situation. Taylor suggested the couple meet with their CPA, as well as Taylor and his partner. Each side would come with their best proposals and attempt to reach an agreement. At the meeting, Robert's proposal was 10% more generous than the EDS analysis had indicated and substantially more generous than his attorney's proposal.

The result: a fee to Taylor of $7,500 and, after a four-hour meeting, the couple had reached an agreement. Total elapsed time, 27 days.

Litigation Is Expensive

Problems that couples go through when they decide not to participate in Taylor's process illustrate its advantages over the current litigation-intensive process. Take the example of the Spellmans (not their real name).

Arthur Spellman was a successful developer who had married his second wife, Elizabeth, nearly ten years ago. Their prenuptial agreement excluded their respective businesses and existing retirement plans, as well as any future increases in value of those businesses and contributions to the retirement plans.

The Spellmans came to Taylor and his partner to mediate the end of the marriage. During the mediation, Arthur made an offer that was, in Taylor's estimation, at least 50% more generous than a court might require him to be. After a few days of "thinking about it," Elizabeth declared that she was entitled to some of Arthur's business value and his retirement account, notwithstanding the prenuptial agreement.

Sensing that Elizabeth's attorney was advising her behind the scenes in direct violation of the mediation agreement, Taylor confronted her with his suspicions. When she admitted she was getting advice from her attorney, Taylor terminated the mediation and advised the parties to settle their differences through litigation.

Four months later and an additional $25,000 in attorneys fees, the Spellmans settled in a court-ordered mediation with Elizabeth receiving nearly 30% less than Arthur had offered in the previous mediation.

This kind of dollar difference dramatically illustrates the added value of Taylor's program-and why it is both a "better mouse trap" and a viable business solution for financial advisors.

How Did He Get Here?

Taylor attributes his interest in finding non-traditional solutions to clients' financial problems partly to his participation in the Canadian-based Strategic Coach program, a three-year "focusing" program for entrepreneurs. "It focused my attention and expanded my freedom in the important areas of my life," Taylor recalls. "It also encouraged me to create a business that reflected my intellectual interests and knowledge base."

Sullivan's program prompted Taylor to identify his unique abilities. "In my case it led directly, over time, to divorce mediation," Taylor says.

Even before he developed the DMP, Taylor had found his stride, thanks to a combination of hard work, discipline and increased ability to build a business centered on his talents and professional skills. The result: Taylor began to develop customized legal and financial services for highly affluent clients.

These services eventually lifted the firm's revenues to $1 million per year. But money wasn't the only attraction of the business. "I never looked on this business as a numbers game," Taylor says. "I never thought the goal was to be the most efficient processor of information and purveyor of national and local financial rules and regs. Even when I was starting out, I knew I had other strengths. It just took me some time to realize them."

For Taylor, coming into the business from a law career, there was a kind of culture shock that he eventually confronted by becoming increasingly focused on his own talents and interests. Starting in 1986, when he first opened the doors of his own firm, he began to use his writing talent to gain a name for himself as an advisor.

But it was his interest in family law and in helping to reconfigure the financial advisory landscape that set him on a journey to become a change agent in the financial services world.

As an advisor himself, Taylor says he is "privy to all of the tensions and secret conflicts of interest that beset this industry. I see what works and what doesn't work."

He sees financial advisory work as product-oriented work, which includes charging fees for assets under management. But he thinks this structure eventually will recede in significance and be superceded by one in which fees are generated through "knowledge work."

What is knowledge work? Financial advisors are among the purest and most energetic of entrepreneurs, Taylor contends, and over time their knowledge base of financial services becomes both broad and deep. Couple this with a series of professional programs that financial advisor can implement with appropriate clients and you have the beginnings of a new industry, or at least a reinvention of an old one.

Taylor himself is not stopping with the Divorce Mediation Process. He has two other programs in the works, one of which deals with children after divorce and the other with a turnkey financial privacy system that advisors can offer clients. He hopes to market both systems to other advisors as he intends to market his DMP. "Everything I am developing is based on the idea that the advisor himself or herself is the possessor of a unique process, service or specialty," he says, "or can master the skills involved in a useful program and then charge a fairly weighty fee for the application of that information."'

And he adds, "Advisors are still persuaded to believe that it is their relationship with a firm, preferably a very large securities or insurance firm, that gives them the ability to generate income. This may have been true once, but it's certainly not true now. The microchip has allowed financial advisors to place all of the resources that they need at their fingertips."

For Taylor, the financial services industry is a pressure cooker that keeps the lid painfully shut on a broad group of competing agendas. Government bureaucrats, including securities regulators, have pushed the envelope of what is in their power to oversee; financial firms, squeezed by increasingly onerous regulation, attempt to discipline the financial advisors in their network; financial advisors view much of the regulatory agenda aimed at them as unworkable and even counterproductive. Each group involved is suspicious of the other-and the result is a fairly dysfunctional industry, a wary waltz among power brokers that goes round and round but never makes progress.

What the industry finds valuable is inevitably product related. That's no accident, according to Taylor. By playing up products and downplaying advisor expertise, the financial services industry attempts to maintain control over what it views as a freewheeling distribution channel.

"Why should it be this way?" Taylor asks. "Say you want to learn to paint, so you pay a visit to a local artist who does that sort of thing. You talk and agree you will pay a visit once a week for several hours at a time. Wouldn't you be surprised if the artist sat you down and told you that he wouldn't charge for his or her expertise, just for the paint and brushes provided to you? That's how it is right now in the financial industry. No matter how much the individual advisor or agent knows, when he sits down with a client, the chances are he's locked into a payment schedule that is product based not knowledge based."

Taylor himself generates his $1 million-plus in gross revenues without either RIA status or a brokerage license. He is also well aware that his message sounds radical. But he believes that his DMP and other programs are only the opening salvo in a drawn out war with a failing industry.

"Other industry transformers are coming right behind me," he says. "And as we have success, others will start to see that our analysis of the industry is correct and that we have responded to the market with new and appropriate solutions."

Change always makes people uncomfortable, he knows. But he has a message for firms who understand his point of view but don't accept it out of fear or mistrust. "Right now it's easy to dismiss what we've analyzed because the paradigm has not yet shifted. But once it does, those firms which do not adapt will be left behind."

Whether or not all of this materializes remains to be seen. "Change is inevitable," Taylor says. "And I'm proud to be a change agent. I believe it was what I was born to do."