Still waiting for my bank non-compete to expire, I am plunging ahead with $58-dollar-a-month overhead and knowing I can help in my native community

June 2, 2013 — 9:45 PM UTC by Guest Columnist Sandi Martin


Brooke’s Note: I looked up Sandi Martin’s town. The burg is 100 miles north of Toronto and it has a population of about 12,000. That actually sounds pretty big (to this Mainer) until you consider that it is about 200 square miles in size and is the thriving metropolis of its immediate area. The Bronx, Brooklyn, Manhattan, Queens, and Staten Island combined are 300 square miles and hold more than 8 million people. And most people in her Gravenhurst, Ontario 'market’ are not exactly hauling down big bucks — other than the ones with antlers. So my over-explained point is that it is not exactly in What Color is My Parachute as the next 'logical’ career step after seven years of dues-paying at a bank desk. But with her low overhead, high technology, high touch business proposition — and just the right amount of humor — you might conclude she is on to something.

On the first day of January, I quit a secure and salaried position at one of Canada’s top five banks to start my own fee-only financial planning practice.

My husband owns a small home improvement business.

We have three small children.

I’m not a natural risk-taker.

It sounds like one of these things just doesn’t belong, doesn’t it? And yet, here I am: self-employed in the (very) small and remote town of Gravenhurst, Ontario, in an industry that’s still in its comparative infancy, married to a self-employed renovator. “Risky” probably isn’t even the right word; “foolhardy” might be more precise.

In the banking trenches

I’m marketing myself here in Gravenhurst to an underserved segment of the population I like to refer to as “regular people”: smart but fairly average wage-earners and entrepreneurs who don’t have enough assets to attract the attention of AUM planners. The biggest challenge I see ahead of me is convincing them that they should pay for advice from my firm, Spring Personal Finance, when everyone else seems to be giving it away for free. See: A $2.5 billion RIA makes its mass-market bid for thousands of new clients.

For these folks, the financial advice industry is dominated by a few big banks and mutual fund companies whose sales departments underwrite their complementary advisory activities, and — as a veteran bank advisor of seven years — I am certain that regular people can do better.

In the core (read: not high-value) banking trenches, the job of course is to sell financial products, not provide nuanced financial planning. Core banking is a volume business, net new money is the only important yardstick, and the soft “client satisfaction” metric is mentioned often but ignored just as frequently in favor of its more popular and outgoing friends: credit cards, investment, and mortgage sales. See: Ric Edelman is looking to add a $1-billion RIA elephant even as he unveils an online consumer strategy aimed at the chipmunks.

When I was in those trenches, in every 37-and-a-half-hour work week, I made 25 outbound sales calls a day, booked ten appointments for the following week, ran the 10 appointments booked the previous week, attended at least three conference calls about identifying leads and increasing sales, and wrote a daily report about those activities. It left very little room for doing the actual work that clients came for, let alone building relationships or delivering in-depth, nuanced advice. I was paid a salary, not on commission per se, but bonuses and pay raises were based upon my sales production. See: What’s up with Invesco offloading its $20-billion RIA/trust firm to a Canadian bank — and at a bargain price?.

Gravenhurst engines of commerce.
Gravenhurst engines of commerce.

The part I love

Those few precious hours in a week that I could claw out of the never-ending sales cycle to concentrate only on people weren’t enough. I’d guess that I developed lasting advisory relationships with maybe 65 clients out of a portfolio of 6,000, which means that there were 5,935 people roaming the streets with little direction and less help.

But let’s be honest: In the vast sea of regular people, not every one needs a financial planner. The cost of paying for advice outweighs the benefit not because there aren’t real opportunities to build wealth, cut costs, and do better overall, but because not everyone has the discipline to follow through with it. See: How RIAs like Aspiriant and United Capital are working to put financial planning back at the center of financial planning firms.

Out of the teeming masses of spenders happy to just float through life without doing much work to make it meaningful, there are a few savers who could make big changes, if only they had someone to help them figure out the numbers, translate the finance-speak, and set them up for success.

That’s the work that I love, and the choice I made: to leave a secure job with lots of room for advancement — but only marginal room for fulfillment — and build a business around the small part of the job that I love and am really, really good at.

$1,100 startup

So here we are, back at the beginning of the story, and while I may have resigned from banking because it doesn’t satisfy me, I don’t want this to be mistaken as a “chasing my dreams” or “seeking personal fulfillment” story. If I wasn’t reasonably sure of being able to feed my kids, pay my mortgage, and build wealth by going into the fee-only financial planning business, I wouldn’t do it.

(Naturally risk-averse, remember?)

One of the ways I’m mitigating the risk that I won’t get enough clients to pay the bills is to reduce the bills. My business model is as stripped down as it can get without being naked: no managed assets and no sales outside of my time and advice. I meet with my clients online and by phone. My total startup costs were $1,100, and my overhead runs at $58 per month. I do everything myself, including bookkeeping and accounting (for my husband’s company too, of course.) See: How and why I’m starting an RIA from scratch and what I’m spending to make it happen.

We’ve made a lot of sacrifices to prepare for this business. My husband and I have worked to decrease our obligations and living expenses by enough that we can live happily on one income, and I can pursue a steady business-building strategy without the clawed monster of desperation goading me on. See: Fidelity will soon charge a big fee to small advisors.

Zero hours in meetings

My client acquisition strategy is (unsurprisingly) modest in scope. While I’m paying for a small Google AdWords campaign, my main efforts are directed at the gradual and organic increase in credibility that I believe a sustained and authentic social-media presence will give me. See: Gathering assets with long tails: Exactly how RIAs of any size can market with the big boys with 'Google Love’.

So far, clients have found me through a free listing in a Canadian personal finance magazine and my AdWords campaign. The clients I used to work with at the bank are temporarily off-limits under the terms of my resignation, and while I wait for my enforced silence to end, I’m planning a campaign to get back in touch with them personally. See: Having won advisor assets, Envestnet’s next — more Google-like — play is for their smarts.

Since I’m going to all this trouble to create my ideal job, I should probably also mention that this job has to mold itself around my family. Those three young kids I mentioned? The oldest one is 5. I’m loath to talk about it too much with clients, because the inevitable perception is that I’m really just a stay-at-home mom playing at being a financial planner on the side.

Advisor play break

In reality, I put more time into building my business than I did into working full time. Fortunately for me, my sense of fulfillment and the happiness of my family, I have to spend approximately zero time in useless meetings, office chit-chat and being physically present behind a desk, which means that my work isn’t limited by the linear demands of a 9-to-5 block of time.

I don’t have any illusions that the business model I’m pursuing and the people I hope to serve will make me rich. Not financially rich, anyway. Then again, I’m doing what I love, not doing what I hate, paying the bills, and can stop working at 11 a.m. to play outside if I want to. See: The advisor who sailed off grid and found a new business model for his $550-million RIA on the way.

It can’t really get any better than this.

(OK, it can. But it doesn’t have to.)

Sandi Martin is a former banker at the Canadian Imperial Bank of Commerce, and for her sins, is operating a one-woman fee-only financial planning practice in rural Ontario, Spring Personal Finance. Her hobbies are thinking, reading, and writing about money (although not necessarily in that order.) She’s not a fan of office chit-chat (although Twitter chit-chat is another thing entirely), and her three small children aren’t learning the words to “Fidelity Fiduciary Bank” fast enough. She takes her clients seriously, but not much else. Connect with her on Twitter @SandiMartinSPF.

Share your thoughts and opinions with the author or other readers.


Brian Hamburger said:

June 3, 2013 — 9:21 PM UTC

Kudos to you, Sandi, for aligning your pursuits with your priorities. Might I suggest that a Canadian attorney might yield a higher ROI than Google AdWords in that, perhaps, you could navigate around your employment restrictions and continue to serve their needs without interruption. All the best in your new endeavor!


Sandi Martin said:

June 6, 2013 — 5:58 PM UTC

A great suggestion that hasn’t been overlooked. Thanks, Brian.

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