Troy Von Haefen rests his head on his own pillow most nights. But that wasn't always the case.
Prior to founding Von Haefen Financial Management in 2004, he'd spent many a night on the road as a guitar player, sharing the stage with the likes of Grammy Award-winner Lee Ann Womack. But dreams of a life without the ups and downs of the music industry were never far from his mind.
"I wanted more of a stable, long-term career. I wanted to sleep in my bed every night, and I wanted to be able to control my schedule a little bit more," Von Haefen said. "And I love financial planning. I love helping people. I have a real passion for it. I had a lot of fun in the music industry, and I just decided it was time to let the young kids take over."
Von Haefen has done exactly that, building his firm to about 80 clients, of which about a quarter are in the music industry.
READ MORE:
He sat down with Financial Planning to discuss his niche, how it was built and the advice he would have for someone setting out to build their own distinct client base.
This interview has been lightly edited for clarity and length.
Financial Planning: Tell me about your niche.
Troy Von Haefen: About a quarter of my practice is folks in the music business in Nashville. Just to clarify, when I say "folks in the music business in Nashville," these are professionals. These are folks that do it for a living, and some are more financially successful than others.
It runs the gamut. I have some successful artists. I have musicians that play for artists. I have managers that manage big artists. I have different types of managers — an overall manager, tour managers, production people that manage production lighting. I have writers.
FP: You're in Nashville, so you probably could throw a rock and hit someone in the music industry. But how did you start in this niche? How did you get your first clients?
TVH: You're right. I mean, my neighbor is Chris Lane, who lives behind me. It's just crazy. Down the street and behind him is Richard Bennett, a big producer of loads of acts back in the '70s and '80s, and just a great guitar player, good guy. So, yeah, so they're all over.
My connection is that I moved to Nashville as a guitar player, and I worked at a high level in the industry for 10 years. I played guitar with Lee Ann Womack and traveled the world with her, with her when she was CMA female vocalist of the year and "I Hope You Dance" was her big song.
FP: So, you knew some people. How did you start conversations about financial planning and try to bring them on as clients?
TVH: For me, it was really natural. People would look at me and ask the question, which is a pretty damn logical question: "Troy, how do you go from being a guitar player to managing people's finances?" It doesn't seem like a logical connector, right? But it actually was for me. My first degree was a music degree. Later in life, after I left the music industry, I got a business degree. But even when I was even in college, I had really good bands that were very successful, so I managed those bands. I was always looking at the finances, handling the money.
READ MORE:
So when I was on the road and working in Nashville, I was the guy in the tour bus reading The Wall Street Journal, and other players would come up and say, "What's the IRA amount this year? How much can I put into my IRA?" They would just ask me financial questions. So I've always had a love for and a passion for finances and financial planning. And then I started working on my CFP, went back to school, got another degree, then did my CFP coursework. And a lot of those people and friends that I knew from my past career were sitting there saying, "Troy, when you're ready, when you open up your practice, let me know." Quite a few of those people came in as some of my early clients that are still with me.
And then, word just kind of got out that, "Hey, you know, here's this guy that is a musician that's been there, done that at that level."
FP: How does your connection to the industry help you build trust with your clients?
TVH: The most important part is that the people that I work with within the music industry that didn't know me back then, at least know that I understand the music industry and I speak the lingo, because it's a different industry. Being able to understand, for instance, how a songwriter gets paid is important, and how to look at that and understand how that funnels into their financial planning, to understand how a manager gets paid and how to do projections based on what the artist is doing, and help them look at that and use the projection. To be able to understand that it's not a straight line, like somebody giving you a W-2 job. That was the real glue that keeps it all together with my musician folks.
FP: What are the challenges your music industry clients face that might not affect your other clients? I'd think that having a client hit it big could lead to an influx of money quickly. Is that a challenge?
TVH: There's similarities and differences. Some of the planning themes and approaches are the same, but you do have to understand the ebb and flow of what happens. For example, a challenge would be: You get a songwriter who gets some royalties over an 18 month period that are 10 times what they're used to earning. So you have to work with those clients to make sure that they understand that this may not be sustainable, and to be careful with lifestyle creep. If they're used to spending x and now they're 10x as far as income, it's not advised to ramp up your lifestyle 10x. So we have to really work hard with them to make sure that we're putting money away for tomorrow.
The other piece of it, really we as ACP [Alliance of Comprehensive Planners] advisors are tax-centered. It's my favorite piece of what we do at ACP, because we focus on making sure that our clients are efficient from a tax perspective. And when clients have those big years that are 10x what's normal, if we can save them thousands of dollars in taxes, that just means that there's more things that we can do with that money to help them down the road.
FP: You're obviously an accomplished guitar player. What made you leave that life for financial planning?
TVH: The short answer is, I just wanted more stability. I traveled so much. And I had achieved 95% to 98% of what I ever dreamed of as a kid, you know, traveling around, playing giant stadiums, being on TV, playing on a couple records and just doing cool stuff like that. But the other part of it, the other part that I was missing, just wasn't worth the sacrifice at the time.
FP: How do you continue to grow this part of your business? How do you market to accomplished musicians and music industry people in Nashville?
TVH: If you go to my website, you can see that it just has a lot of pictures, that it's really kind of a connection to Nashville. When we designed it, it wasn't so much saying, "Hey, we want to really focus on musicians via the website." We just wanted to make a Nashville website, so to speak. It wasn't like we were just trying to draw in musicians. We were just honoring Nashville.
But our practice is very stable, and we're in a good spot where we don't do marketing. The only thing that we do is word of mouth through clients. When a client refers somebody, that's a pretty good connection. So I get the musician folks that come to me from, "Hey, so and so, your client, said that you're great, and we're in the music business. We would like to chat with you."
READ MORE:
FP: What advice would you give to someone who wants to
TVH: Early on in my career, there was a business coach that would advise advisors to look at your end goal — where do you want to be in five, 10 and 20 years — and work backward. And I started down that path, and I'm so glad that I deviated from that.
If I had said, "Hey, I want to move to Nashville and play with a national artist," that's a goal. That's something I can work backward from, right? But financial planning, I'm so glad that I didn't just say, "Hey, I want to focus on having a giant practice with the building with my name on it and have five different advisors," because what I found over time, is that in our business life, we're going to come to a crossroads, right? And if I was just looking down the road at that when these other crossroads came up, I would have made my decision just based on that versus what I'm dealing with.
Over time, I figured out really what I wanted in this business and what I wanted my business to look like, and so, for me, and for those looking to have a niche practice, it's great to have a niche. But don't put all of your eggs into that basket, because if you do, you're limiting yourself, right?
So it's great to have a focus or a niche or a specialty. But especially if you're starting out, be flexible. What you may find out early on is that that niche may not really be what you want to do. Examine crossroads as they come up, because life's going to change. Life's going to throw you curve balls. Some of those curve balls you're going to swing and miss, but some of them are hanging curve balls that you can hit over the fence.
I'm a big fan of letting a business develop organically. Even though, logically for me it made sense to have this niche of folks in the music business, it happened organically. Having a specialty can really help serve you well. And you'd be surprised how other clients that may not need that specialty will respect you even more, even if they don't need it. Clients might say "Troy works with a lot of music business folks, and that stuff's got to really be complicated. So he's got to really know what he's doing." So again, that niche doesn't have to be everything for you, right? But it can also help you.
