How my career path to become an RIA included pay phones, American Express, the pressure of being a physician's son and facing down robbers as a bank teller

Brooke and Dina’s Note: There’s an old Saturday Night Live skit in which a reporter on the street intones: “In New York City, a man is mugged every 10 seconds.” The camera pulls back to reveal a thoroughly pummeled gentleman. The reporter continues, “ladies and gentlemen, this is that man!” The reporter proceeds to interview the unfortunate but game fellow despite the fact that is he attacked at, you guessed it, 10-second intervals. It turns out that there was that same game guy in Madison, Wis. and he is the bruised but unbowed Scott Oeth. While this autobiographical story demonstrates the tenacity of its author, it is only slightly more dramatic than the norm for college graduates working their way to become fiduciary advisors. So often the formula turns out to be to get a job, any job, in financial services — often enough in a bank, brokerage or series of brokerages — to soak up training and experience before trying to transcend the cultural baggage and become a fiduciary RIA. It’s a rough business. With luck the trauma and scars of the early years end up making the advisor stronger as opposed to killing them. Today, ways exist to become an advisor at an RIA without following this semi-ludicrous career path that can even include facing down multiple gunmen. But not many. Is it any wonder that this industry is suffering a net loss of thousands of advisors annually? It’s little wonder that RIAs who make it to the other side of their hard knocks training have amazing stories to tell.

Mustering calm, I looked down at the crumpled note that had been shoved across the counter at me: “Put all the money in the bag. No alarms or I’ll shoot.”

I glanced back up at the seedy-looking criminal who’d done the shoving, and couldn’t help but wonder, “What am I doing here?”

It was the mid-'90s. A few years out of college, I had quickly risen through the ranks at the local community bank and was managing two branch locations near Madison, Wis. Although robberies were not something I had signed up for, I was getting to know the routine. This was the second “incident” within a year — third, if you count the guy who walked into the bank lobby wearing a gorilla mask, then froze and walked out after a few moments when I told him he had to remove the mask.

Subtly tripping the silent alarm, I loaded the bank-designated “robbery bag” — the one with an exploding paint dye pack — shoved it across the counter at the robber, and wished him a good day. The FBI and local police arrived shortly thereafter, and I took a ride with the G-men to identify the paint-covered suspect who had been tracked down by police dogs in the woods about one mile from the bank. The robber had been released from prison only a short time earlier and appeared to be heading back into the clink.

Discovering CFP

Robberies aside, I knew the bank wasn’t my endgame. I’d hoped my role there would evolve into one with more of an investment focus. But very little investment work had materialized, and I realized the bank investment platform was extremely limited. The position offered the opportunity to work in lending, manage a staff and bank branch operations—all of which was great business experience. But on this particular day, I realized that unlike my fellow managers, who had impressive tenure at the bank, I didn’t want to be doing this same work 20 years from now.

Inspired by my physician father, who epitomized the values of hard work and thrift and had a passion for investing, I wanted to work with people to solve financial issues. My father spoke fondly of working with families “from cradle to grave” and developed lifelong relationships with his patients. I hoped to offer the same type of meaningful relationships through financial planning. See: This father-daughter-son team survived 9/11 but divorced Wall Street altogether 14 years later.

However, while at Ball State University in Muncie, Ind. earning a B.S. in corporate finance, I was never introduced to the concept of a personal financial planner. I had many courses in economics, accounting and investments, but everything was geared toward institutional money management, and there was no discussion of financial planning for individuals as a career. See: What I learned at Harvard Business School that doubled my RIA assets to $3.3 billion in two years.

It wasn’t until I started flipping through industry journals at the bank that I discovered the Certified Financial Planner designation, read some practice profiles, and zeroed in on the field. It seemed the perfect blend of analytical and people skills with interesting investment strategy work and an added bonus of entrepreneurship—aspects that appealed to me. See: After being jostled by a lawsuit, CFP Board makes bold play to inoculate itself against future ones.

I’ve had clients out winter camping
with me at minus 30 degrees
Fahrenheit. They loved it!

The bank had been a good start in business and finance, but it was time to make the switch and focus on financial planning and investment management. As the saying goes, the journey of 1,000 miles begins with the first step (and as it doesn’t say: is littered with obstacles). See: Why quiet co-breakaway of LPL and Ameriprise advisors in Downeast Maine speaks so loudly to Shirl Penney.

Long odds

I started hunting around for a job as a financial planner and immediately ran into an obstacle. In the late ’90s, entry-level financial planner jobs did not seem to exist. Aspiring financial planners were hired with that job title, or something similar, but the position ultimately amounted to that of product salesperson. In fact, during each initial call with a potential employer, the polite introductions were quickly followed by “What’s your production?” Production? Zero. And I didn’t have much confidence in my sales ability at that point or desire to work in that capacity.

In those days, depending on who you talked to, it was often said then that only one in five or one in 10 people made it as financial advisors, which meant they sold enough to survive. I had a bit of sales experience from the bank, but not enough to be confident that I’d be that one in 10! I also knew that I ultimately wanted to be in a position where I was selling my financial advisory abilities, not financial products. I wanted to develop my skills and experience before trying to develop a client base.

The job search was pre-Internet, so I obtained the Yellow Pages for the Minneapolis area. I was still working at the community bank, so I maximized my lunch break and made calls from a pay phone while I ate. I made weekly trips to Minneapolis for about two months to walk the streets of downtown, going door to door with my briefcase full of résumés. After a day of knocking on doors, I jumped back in the car and drove the four hours back to Madison, so I wouldn’t miss work the next morning.

I took a job in the home office of what was then American Express Financial Advisors. My role was to provide training and sales support to AEFA’s financial advisors across the nation. I was delighted to get this job. It involved a move from Madison to the Minneapolis-St. Paul metro area, which seemed like it’d be better for my career long-term, and it also put me closer to the northern woods and waters that I loved. See: In a move that risks a backlash from within, Ameriprise opens the door wide for bigger wirehouse brokers.

Working with advisors

AEFA provided me with solid financial planning experience. I was exposed to many more cases—and far more advanced cases—than I ever would have come across if I’d hung my own shingle at that point. Every day, I was working with advisors on their most complicated and advanced cases. I also was forced to learn a lot about estate planning, insurance and taxes — experience that I’m not sure I ever would’ve picked up if I’d gone to a purely investment-focused company.

My evenings back then were spent earning my Series 7 license, as well as the Chartered Financial Consultant (ChFC) and Certified Financial Planner (CFP®) designations. See: How to ace the grueling Series 65 exam and keep your wits and your nerves intact in the process.

After a couple years, I knew it was time for the next step. Management changes at AEFA had shifted the focus of his role from advisor training and financial plan design to product sales. I did not like having products forced into my advice. I wanted to do the work, but without the product sales agenda. The thought of working in a pure advisor and consultant role, while being agnostic in regards to products, or brands of products, was very appealing. See: Ameriprise Financial clamps down on franchisees with new rules.

My greatest takeaway from AEFA: I realized that I loved this field. There is always something new to learn, and helping people achieve personal financial goals that mean a lot to them — like paying for a wedding or college — or just knowing they’re financially secure if something bad happens — is very rewarding.

Fortuitous blunder

After leaving AEFA, I joined one of the larger local independent, fee-only, registered investment advisory firms. I was paid a reasonable salary, and put in charge of approximately 100 smaller portfolio clients. I also served on the firm’s investment policy committee and was responsible for a significant amount of financial planning for new clients of the firm.

During this time, the dot-com bubble burst and 9/11 and its economic aftereffects were in full swing, Enron dominated the news, and the bear market of 2000-2002 reared its ugly head — all of which made working with clients and managing their portfolios a trial by fire. It was excellent experience as I worked directly with clients in really tough markets and learned from working with the owners, who were both sharp financial planners. See: Five scary investment scenarios.

Although I had hoped this firm would be a long-term opportunity — initial discussions, after all, included the possibility of buying in down the road — events transpired during this time that convinced me the grass would be greener somewhere else. It was frustrating because I had worked hard to build solid client relationships — relationships I knew I would have to leave behind. I started job hunting, and was in discussions about joining another group, when I took a calculated risk and submitted a résumé to a blind job posting. Turns out, I’d applied for a job at my existing firm, and I was summarily dismissed!

The goof turned out to be a blessing. Although I didn’t know it at the time, there were deeper issues with the firm. About a month after I left, the partnership had its own unfortunate turn of events and dissolved.

Expanding my skill set

It didn’t take long for me to land at another RIA firm. This time, however, there was a markedly different compensation arrangement: one based on production. I was paid a minimal base and had incentive pay tied to client acquisition.

I saw rapid growth in my client base, which went from zero clients to about 75 in three years. I had a chance to work on building my business development skills. I realized that I actually really enjoyed marketing and sales, whereas before I’d thought of myself primarily as a technician. While developing my sales skills, I didn’t forget the nuts and bolts. In fact, I completed a master’s degree in financial services. See: Top 10 ways financial advisers can 'market smarter’ — and enjoy it more in 2012.

I also began teaching retirement planning and employee benefits as an adjunct professor in the Certified Financial Planner graduate certificate program at local colleges. I had a strong grasp of investments and financial planning, but the combination of teaching in the CFP program for 10 years and earning the MSFS really deepened, and broadened, my technical skill set. See: How exactly I started a specialized RIA for under $10,000.

Thwarted again, building anew

As I progressed, I found the years of effort I’d put in as a competitive volleyball player playing on a Division 1 scholarship at Ball State University, and having earned AAU and USAV All-American honors, carried over in different aspects of my career.

The earlier years were more like training: committing focused time and effort to build skills and ability and then grinding away and working on incremental improvements with an eye towards great long-term outcomes. Later, when advising clients through the dot-com bust, 2007-2008 financial crisis, or presenting to a prospective client, it felt more like performing under pressure on court. See: Passing on the NFL draft, Cardale Jones has a better idea: Study to become a financial planner.

After a few years of noticeable success, the firm’s management decided to change the structure of their relationship with me. There would no longer be an open-ended incentive pay with a small base, and terms around transferability of client relationships were restricted.

The new deal was far from what we’d originally agreed upon. There was discussion around buying an ownership position, but eventually I decided that I didn’t want to pay their valuation number with after-tax dollars, which had to come through the firm’s pay grid, for a minority interest. It made more sense to build anew.

This was a tough setback, yet again, and I was frustrated. Frustrated not only because I spent years trying to solidify my stake in the firm, but frustration because I had developed concrete relationships with my clients, and now I would likely be forced to leave them.

By this point, I had developed strong opinions about what constituted best practices and methods for financial planning and managing portfolios, and knew that implementing them would require that I start my own practice.

There was something else, too: I am a lifelong outdoorsman with a passion for wilderness and adventure travel. The thought of building and eventually staffing a practice that would allow for the possibility of working from remote locations, and having greater control over my calendar, was very appealing. See: RIA on the waves: Scott Leonard’s three-year adventure running his practice from a sailing ship at sea.

So, I made the decision to start over once again.

Once more, with feeling

In 2006, I made the move to join Cahill Financial Advisors Inc. an independent, fee-only, registered investment advisory firm in Edina, Minn. I’m now a principal with the firm, which has been named as one of CNBC’s Top 100 Fee-only Wealth Management Firms. At Cahill, I’ve been able to build my practice in collaboration with my partners, but also very clearly design the planning and portfolio process needed to work with my clients.

With the move to Cahill, I was forced to cut ties with almost all of my previous clients. I was also a self-employed investment advisor representative, meaning no salary, and plenty of start-up expenses.

I’d also been recently divorced, so I moved into a cheap one-bedroom apartment near the office and put my camping gear to use. I slept on the floor, cooked out of my mess kit, and ate at a card table while sitting in my beach chair. I couldn’t have been happier. I had a huge desire to make it work, and was confident that I had the right platform to make this next step work.

Essentially starting with no clients yet again, I put my previous experience into action. I diligently worked to develop a client base that consisted of not just people, but people who believed in, and agreed with, my all-encompassing and long-term approach to financial planning. Developing relationships with other professionals, H.R., tax, and legal was a key business-building step.

Today, I manage approximately $80 million in client assets, and continue to see growth each year.

On Target

I believe it is beneficial to advisors — and even more beneficial to clients — for advisors to be strong generalists, but also have a specialty area of focus, whether it’s a client demographic or a technical skill set. A large amount of my practice growth over recent years is a result of my focus on planning opportunities and the needs of corporate executives. From stock options and restricted stock to concentrated stock positions and non-qualified deferred comp, executive compensation is a complicated arena. Many advisors never encounter the myriad options and opportunities afforded to executives. See: Why sudden wealth at Facebook is gushing into a $17-billion RIA and triggered a merger of two DFA giants.

Target Corp. is headquartered in nearby downtown Minneapolis, and I have worked to become an expert in understanding their equity-based compensation offerings and benefits. My practice has grown very quickly by word of mouth within the company. This type of specialty works well for the advisor and the client — the more an advisor works in one niche, the deeper an understanding they develop, and the better they become at maximizing a client’s options. Target, in particular, has some specific offerings for their executives, and working with several of Target’s execs in this position has given me the opportunity to work through optimization strategies many times. See: How a Chicago RIA grew to more than $700 million by carving out a client niche of wirehouse execs.

Into the wild — with clients

Oeth and former FPA national president
Michael Branham on a weeklong
canoe trip on the Kopka River
in Ontario.

What’s next? I’m hitting the books again, working on earning the Chartered Advisor in Philanthropy (CAP) designation. I’ve done a lot of volunteer work with the Boy Scouts over the years — both in the field and also on the fundraising side. I really enjoy helping people figure out how to maximize their charitable impact with various financial strategies. See: Strategic philanthropy: Exactly how to bequeath your values — not taxes — to the next generation.

I also think a lot about the opportunities currently afforded by technology — and the pleasure I gain from unplugging from it. The technological tools currently available to communicate with clients — blogging, podcasting, creating video content, and social media — are incredible. Plans are in the works for me to create a lot more commentary and educational pieces using these tools, and I’m investigating how these tools could be used to work with clients in new ways. See: Why technology is vital for RIAs looking to steady client nerves in stormy markets.

With my wife, Linda, I’ve also launched an outdoor adventure and education company, Bull Moose Patrol. We write, speak and teach about outdoor skills, and also guide wilderness adventures. I also have several clients who are outdoor enthusiasts, and I’ll soon be putting my CFP teaching and FPA speaking experience to use by hosting client and financial advisor events in exceptional outdoor settings. I’ve had clients out winter camping with me at minus 30 degrees Fahrenheit. They loved it! It’s a bit more of a unique experience compared to golfing or wine tasting. See: What I learned about our industry’s toughness, endurance and character across four peaks, 28 miles and 7,500 vertical feet in Aspen.

Six things

In conclusion, here are some hard-won lessons I’ve picked up on my journey.

1. What one man can do, another can do.

Early on, I was fascinated by the stories of successful and prominent financial advisors. I still am! However, working with several advisors early in my career as a consultant, co-worker, and fellow association member, taught me that they are regular people who’ve built their success over time. When I saw the movie “The Edge,” and heard the mantra “what one man can do, another can do” repeated by one of the characters in an attempt to build courage and determination to fight a raging grizzly bear, it became my internal rallying cry on days when I felt like I was facing my own type of bear. (Incidentally, I have been charged by grizzlies while backpacking in Alaska!) See: After guides say no to RIA adventurers’ proposal to scale Mount Shasta, ankles snapped, teams faded and only a few saw the summit.

2. Come loaded for bear

In fact, if you want to become a great financial advisor, you need to come “loaded for bear.” I knew where I wanted to be, but I also knew I didn’t have what I wanted to be offering. So, I hit the books hard pursuing designations and an advanced degree. I spent countless hours at Financial Planning Association learning sessions, conferences, reading books, and industry publications. All the good advisors I know have done the same things. Good mentoring relations, with those older and younger, and study groups have also been invaluable. I think I learn more from my “mentee” at this point than she learns from me! You want to have confidence in your skills and abilities. This will steady you and allow you to be a strong advisor when markets are tough, and also help in business building. See: The big impression Mark Tibergien and his reverse mentor, Kayla Flaten, 25, made on me over a Manhattan lunch.

3. Five-year rule

When I was at American Express, I often heard managers tell new advisors that they should plan on dedicating five lean, hard years to build their way into the business. Five years of long hours, low pay, rejection and serious study to build their knowledge, skills, and client base. And if they could last those first five years, they would likely have built the base for a long and prosperous career. It’s a big commitment when you’re starting at zero on day one, but I think the five-year rule is a great one for new advisors to keep in mind when they’re starting out and the amount of work needed to build a successful practice. See: Sallie Krawcheck clues in green advisors about choosing that all-important first gig.

4. What’s the worst that can happen?

I’d thought about leaving my salaried employee position for a long time; however, the thought of losing the income and having to pay overhead was daunting. After seriously thinking it through and considering my worst-case scenarios, I thought, 'What’s the worst that can happen?’ I set boundaries on how I far I would go to prevent irreparable damage to my balance sheet, and then realized that if I exhausted my startup budget, I’d simply go and find another job doing the same thing I was already doing, except with more experience under my belt. I knew from my American Express days that many financial services companies placed extra value on those with “field experience,” so I felt like I had a solid Plan B in my pocket if it came to that point.

5. Don’t peg your self-worth to your AUM

“What’s your AUM?” is often the first question many advisors ask one another. While I definitely wanted business success, I think it’s important to also have other ways to gauge your success and accomplishments. Teaching CFP courses, taking advanced courses, playing competitive volleyball and my outdoor adventures were all incredible experiences while my practice was still in startup phase. I made a lot of friends teaching and it’s great seeing former students at industry events. Two students are currently my business partners! Activities away from financial planning were particularly rewarding; I won the largest outdoor volleyball tournament in the world, captained a national championship indoor team and rolled out my sleeping bag in many incredible wilderness areas across the continent.

6. Unplug and recharge

When was the last time you went a day without looking at your phone? What’s the longest you’ve gone in your adult life without being subjected to a non-stop barrage of news? Being able to get away from everything — even if it’s just for a couple of days — allows me to return refreshed and excited to get back to work with my clients. It seems that meditation is becoming trendy again, and I do like the workout I get from yoga, but my preference for getting away is to go anyplace wild. The natural beauty, the unlimited adventure, the sense of time slowing down and the clearness of mind that comes with a wilderness trip are incredibly refreshing and reinvigorating!

_Scott Oeth is principal of Cahill Financial Advisors, located in the Greater Minneapolis-St. Paul Area. With his wife, Linda, he’s launched an outdoor adventure and education company, Bull Moose Patrol