In my world, Independence Day came five weeks early. On May 27, I left my job as a financial planner at an established firm and launched my own planning company, Finance for Teachers.
This transformation didn't happen overnight, of course, as many readers know from their own experiences. It took me four years to develop this dream, and nine months of long nights and early mornings to make it a reality. After talking about it for such a long time, it seems slightly surreal to be living it.
There have been hiccups along the way, but I realize there were five key decisions that made my journey easier than I expected. Here are the strategies that have helped me the most so far.
1. DEVELOP A NICHE
Some advisors have become successful by being generalists, but I believe specialization is the future of financial planning - and that planners who develop a niche will become successful a lot more quickly than those who do not.
Over the years, I have come to understand the clients who I enjoy working with and those who I don't. Planning for executives with multiple benefit plans started to get a bit empty; I wondered if my advice really made that big an impact. Instead, I've chosen to focus on teachers, a niche that also includes my wife as well as several family members and friends. My wife's benefits are a key part of my own financial plan, and I know several people facing similar issues. Even if these people don't become clients, my casual conversations with them have given me priceless insight into their world.
I have been working with teachers for the past two years and have been asking them for feedback about how they would like to receive financial advice. Most of them, when presented with the fees it would take to retain my previous firm, didn't feel that it met their needs. They also were uncomfortable with some of that company's investment approaches - this group is fairly conservative and needs more investor education. Taking this feedback, I designed Finance for Teachers to align with what the majority of these clients said they wanted and needed.
2. CHOOSE VENDORS WISELY
Some vendors want to sell you products. Better vendors are willing to educate you.
Throughout this process I have worked with an outstanding marketing company that has also become a marketing coach. While its staff provided a service to me during my transition, they also helped me to understand all the options that were available. They taught me about colors, printing, websites and new trends in marketing.
The first issues we discussed were the underlying principles of the soon-to-be-established company - its mission and who it was going to serve. Their process aided me as I analyzed and honed the underlying philosophies of Finance for Teachers, helping me position my branding and design my marketing materials to suit my audience.
As their designer revised my marketing pieces to look more professional, a company representative explained the logic behind the changes. Not only am I proud to use the resulting materials, but the company has also helped me define the sense of purpose behind my company's mission.
3. SEEK ADDITIONAL INCOME
One of the big fears my wife and I had about me being self-employed was losing a steady paycheck. Some people are happy to live off of savings while they launch, but as a fiscally conservative family, we did not want to tap our savings for income.
My wife, Sarah, supported my goals - but since my move would initially cut our household income in half, she made the practical suggestion that I not leave my current job until I had some part-time income coming in. One of the essentials I needed was a way to cover us until my practice provided a steady income.
As I was getting ready to make my move, I spoke with a company about doing virtual work for them. We got close to an agreement; when the deal fell through, I started to freak out. I had no work lined up, and I had already set things in fast motion for my company launch.
Fortunately, I got a call from a fellow planner who's a committee member of NAPFA Genesis - a group for young planners - asking me if I needed extra income when I launched. The advisor was spearheading a project with a consumer advice website that needed planners to be available during the day to provide virtual planning advice; I could even name my hours and the pay scale seemed promising.
This time, the negotiations worked out; I went into my company launch with 50 % of my previous income being replaced. In the days after my launch, a company contacted me about another opportunity, working on a short project at a great hourly rate. I took it, and now make more working two days a week than I did working five.
4. GET SUPPORT
Even though I am in business as a solo practitioner, I could not have embarked on this journey without a fantastic support network. I started with conversations with other solo practitioners in my area northwest of Chicago, discussing the idea of joining forces. That evolved into being bold enough to go out on my own.
Soon I found other Gen Y planners who also were thinking about going out on their own, or who had already started their own firms. Even now, I talk to planners from around the country about our day-to-day trials and business challenges. We brainstorm together, help each other solve problems and push each other to succeed.
A big advantage to networking with Gen Y solo practitioners is how comfortable we all are with technology. I communicate regularly with peers about the technology we are using in our practices. We aren't afraid to switch vendors if someone gives a product a glowing recommendation. To have peers in the trenches with me makes this a much less lonely endeavor.
5. MIND THE HOME FRONT
There's one story that will go down in Grant family history. Sarah and I were in the kitchen one night in early 2012; I wasn't happy with my work situation and had been exploring the possibility of starting my own firm. She remained unconvinced. As we reached a stalemate, I said flippantly: "If you were pregnant, then this discussion wouldn't matter. I would stay where I am."
We had talked about having another child in the next year. Knowing that we had a spare pregnancy test at home, I suggested she check, confident that the results would push the discussion in my favor.
The surprised, but overjoyed, look on her face as she walked from the bathroom will stay with me for the rest of my life. It was just 7 1/2 months until my son Logan's birth.
After he was born, I once again suggested that I should start working for myself. Fueled partly by sleep deprivation, we decided to start saving for the possibility. Despite the optimism, and with just two months before the launch, Sarah had nagging doubts.
One evening we were taking a walk and she started a conversation by asking, "What strategies are we thinking about to generate clients and revenue? Here's what I think we should do. ..."
I stopped walking and wrapped my arms around her. I gave Sarah a great, big kiss. "Do you realize what you just said?" I asked. "You said 'We.'"
That day, Finance for Teachers became a family company, not just mine. And now, with the right nurturing, we'll watch it grow together.
Dave Grant, a Financial Planning columnist, is founder of Finance for Teachers, a planning firm, and Fee Only Consulting in Cary, Ill. He is also the founder of NAPFA Genesis, a networking group for young, fee-only planners.