Leighann Miko launched her firm, Equalis Financial, about a year ago. Since then, she’s had tremendous success. Leighann has been named one of Investment News’s 40 Under 40, and works to promote diversity within the financial planning industry through her role as an FPA member.
In part one of this two-part series, Leighann Miko chats with us about the start of her career. We cover everything from the moment she realized she wanted to be a CFP®, to the difficult conversations she chooses to have with clients now after going through the market crash in 2007-2008 as an advisor.
“People like to work with people who are excited about what they’re doing.”
What You’ll Learn:
- How Leighann used her experiences to hone in on the career she truly wanted.
- Different options that are available for new CFP® Pros starting their career.
- What kinds of difficult conversations you learn to have with clients as a result of your experiences.
- How to embrace who you are when finding your ideal role.
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Hannah: Well today on the podcast, we have Leighann Miko with us. She is the founder and financial planner at Equalis Financial. Thank you for joining us, Leighann.
Leighann: Absolutely. Thanks for having me.
Hannah: Leighann, you started your firm earlier this year. Is that right?
Leighann: Yes, I did.
Hannah: You are about ten months into the business. Can you give us just a brief picture of what your firm looks like today?
Leighann: Today, my firm basically at this point, I … I feel like I’m a hamster stuck on it’s wheel. It was a slow ramp up period; but then a couple of months in, it was just … It started to get crazy with the inquiries, and new clients, and what not. Today, basically I wish I had an age range that was simple; but I have clients all the way from their 20s to their 70s at this point, doing everything from getting ready for retirement, to buying their first home. I work the gamut. I work with a ton of different types of clients and different age brackets in different stages in life. I’ve got some older clients who are doing retainer planning. I’ve got some clients who are younger just doing project-based planning. It’s kind of a melting pot of everything at this point.
Hannah: Ten months into the business, that’s really impressive.
Leighann: Thank you.
Leighann: It’s been crazy. I didn’t expect it to go off this quickly and to this degree; but I am grateful no less.
Hannah: Before we get into more of your firm, I want to hear more of your story. How did you get into financial planning?
Leighann: I think it was mostly dumb luck. Growing up, I was convinced that I was going to be a teacher; until I was about 20 years old. To the point where I would line up my stuffed animals and teach them. I would put on class. I would go so far as to actually collect unused school materials from teachers to bring home and use as if I was the teacher. I’ve always had this desire to share knowledge. It was kind of that need to just … help people educate people. Even if it was my stuffed animals who would never retain any of this information because obviously they were not living or breathing, it didn’t matter. It was me on my platform sharing anything I could.
Being a teacher just seemed like the natural avenue for that. I also knew that, even as a kid really, is that being a teacher provided a steady salary and benefits. It would keep food on the table for me. I grew up in a family of modest means; which is really the gentler way of saying we were pretty poor. I knew from a young age that … thanks to teasing and taunting of my fellow classmates that we were not wealthy. We didn’t have a whole lot of money and I knew that I wanted to do more with my life. I knew that I never … I didn’t want to repeat the cycle. I didn’t want to end up in the same position as my mom did.
I knew that some sort of steady income was what I needed to do.
Hannah: You talk about growing up and not having a lot of money. When I went to your website, you included that in several places. That’s a pretty personal thing to put on your website when you’re trying to help people with their money and their finances, and trying to get people to trust you. What are your thoughts on has it benefit to you or what … what has been your experience really leading with your story?
Leighann: I think what it really has done is, it’s number one, it’s transparency. I never want to hide anything from my clients. I’m always kind of …
I just say, “I’m an open book. Personal, professional, ask me any question and I’ll answer it;” obviously within reason. I just try and put myself out there. To lead with that kind of negative notion with money, I think has been a benefit for me because I’ve seen it all. I’ve seen the devastation not having money can cause. I’ve seen it from that angle. When I’m working with clients who do have money, it’s really helpful for me to understand number one, many different backgrounds. I definitely work with clients who grew up in similar situations; so I can identify with them.
I can say, “Hey, I understand the struggle. I understand these money behaviors based on your past, because trust me, I lived through it myself.” It’s not as if I grew up super wealthy, and had all this money, and didn’t understand the plight of those who didn’t. Obviously money is a wonderful tool that can help get us from where we are to where we want to be. I think having that less than enjoyable experience growing up really lends itself to me helping my clients in a more meaningful way.
Hannah: That’s great, so your clients have really responded positively to this.
Leighann: Absolutely. It certainly was a fear that ‘Oh no, if I tell clients that I grew up with modest means,’ we’ll say. ‘Is that going to lead them to believe that I don’t know what I’m doing because I’d never had money, or I didn’t grow up with it. I found quite the opposite to be true, and that they recognize where I’m coming from and why it’s important to me, and why I work the way I do, and put that message across.
Hannah: I love that. That’s so good. I think that’s such a lesson for everybody, myself included. … Let’s go back to your story. You wanted to be a teacher. You are kind of … I guess looking around at the world and what you’re naturally drawn to. Where does the story continue?
Leighann: Again, growing up, all through elementary, junior high, high school, I was set. I was going to be an elementary school teacher. I would have these dreams, daydreams, thinking about, ‘Oh, this is what I would do if this happened, and then this is the kind of classroom I would have.’ Then, in my second year of college, a good friend of mine, very bluntly helped me to realize that there was no way that I could deal with kids in a classroom day in and day out while maintaining my sanity. That’s a good friend. That’s a really good friend. Fortunately, she and I are still very good friends. We still have those moments every now and then, be it not to this magnitude of completely changing my career focus; but that’s a good friend to have.
I went back to the drawing board. I really started to think, ‘Okay, if teaching isn’t my thing, what is? What’s still going to appease that need to share knowledge and what not?’ Then I thought back to when I was in high school. I was the nerdy kid who took accounting and business management classes, and thrived. Those were my favorite classes. It was just like the nerdiest thing, but I loved it. I didn’t care what anyone else thought about me, because I certainly got made fun of for it.
Then it dawned on me as I was reminiscing on these times of high school, and again, starting my college journey, and doing it without the help of anyone else, having to foot the bill on my own and create my own budgets, and figure out how I was going to make ends meet while also going to college. I realized that finance was something that could satisfy that need for me to share knowledge, but also … put food on the table and maybe in a more … abundant way than being a teacher; because we all know we pay our teachers crap. Another story for another day. What I did was I immediately changed my major from child development to business management, and then it was just kind of … [inaudible 00:07:51] … from that point.
Hannah: When you’re in school and you’re going through business management, did you have any idea that personal financial planning was a career option?
Leighann: No, no clue. I had taken an economics class; and that kind of taught us how to read the stock market in the newspaper and what not. At that point, there was … and to this day, most high schools, there is no education in terms of personal finance, how to write a check, how to do these super basic things that all people should know how to do; but have no access to the information. In that time, again, the internet … It was around, obviously. I’m not that old, but the resources weren’t there. Computers weren’t in every home; so gaining access to that information was a little difficult. For me, I had no clue. Again, coming from a family who didn’t have much, I just thought kind of, ‘Well, this is just how life is and you deal with it.’
Hannah: You graduated with a business management degree then, is that right?
Leighann: Yeah. Well technically at that point, it was a financial services degree; which was close enough to financial planning as you could get at that time.
Hannah: Okay, so what happened next? You graduate college and then what?
Leighann: Well actually, I hadn’t graduated college just yet. I, like many people, decided … Or I had met someone and unfortunately, they were in a different part of the state. The angst-y young and naïve adult part of my brain convinced myself that I should move from LA to Sacramento. I always told, ‘Oh, I’m going to go to school there.’ I went to Sacramento State for a year, and that to me was like, ‘Yeah, I’m justifying this.’ That didn’t last long. I really … Things did not work out with that person. I realized that I was too much of an introvert and I had too much social anxiety to make the most of my time there. Ultimately, after about a year, I decided to move back to LA.
At that point, I had realized that something in finance was my calling. I didn’t know exactly what. I just knew working with numbers, and money, and finance. Something in that arena was what I was meant to do. I started searching the internet for jobs, anything related to finance. I was looking at job posting, looking at this title going, ‘Okay, that’s what that kind of person does. … And that’s what that kind of person does.’ I cast a wide net to figure out what all of those options were.
Then back in the day, Craigslist wasn’t so creepy. I got on the website one day and I was looking in the finance and accounting section. There it was, this listing with the title that read something along the lines of ‘CFP looking for part-time assistant.’ I had no idea what a CFP was, or what that even stood for, but I thought, ‘Hey, it’s in the finance section. Let’s click it, see what it says. I can be an assistant. I’m in college. I need to work part-time. This is great.’
A week or so later, she responded back and I went in for an interview. It was in that interview that she started to explain how she works with clients and what she does. That’s when the light bulb went off, and I went off, ‘Holy crap, this is my destiny. This woman just described my dream job working with people.’ She was a CFP working, doing financial planning and investment management, mostly for families. Luckily, I had gotten some really nice reference letters from my previous employer in Sacramento. I think that really sealed the deal. A couple weeks alter was my first day.
Hannah: What did she say to you in that interview that really made you say, “Holy crap, this is what I’m supposed to be doing?”
Leighann: Her big thing was that she … wanted to reduce the complexity in her clients’ lives. She wanted to simplify things. You’ve got people who’ve got all these different sources of income, and revenue streams. They’ve got houses and all of this stuff. They didn’t … There’s so many moving pieces that unless you’re really trained in finance and really focus on and understand it, it’s tough to handle.
When she was explaining how she really simplifies her clients’ lives by doing all of these things, that resonated with me. I understood. I was like, “Yes. You can educate them. You can help them understand all of the different pieces,” and you can put together … put the puzzle together for them in a way that makes sense for them and is easy to understand, but making it seem like it’s simple when in reality, on the back end as the advisor, you’re doing all the complicated things and saying, ‘Okay, here’s this simple beautiful picture. This is what you have to do.’
Hannah: I love it. It’s so … I just love financial planning. Maybe that’s what I should just say, I just love financial planning.
Leighann: It’s such an amazing … I don’t even want to call it a profession, because really when someone … It’s a passion. It’s not just a career or something you do. It is a passion. It’s something that I feel very passionate about, that gets me up out of bed in the morning. It’s not just a career or a job. It’s happiness.
Hannah: I always tell people once they really get financial planning and they … whether they’re working for it or that they’re … working as an advisor, or if they’re a client, you can’t go back to anything else. It’s that powerful.
Leighann: It really is.
Hannah: Yeah. How did your intern … Well, I guess your part-time work. How did that … what was that like being a college student working for her? Can you tell me more about that job?
Leighann: When I first got hired to work there, it was January 2007. Everyone was happy. The stock market was at all time highs. Things were going great. People were enjoying life. Then, October 2007 approached and it kind of just gave me the finger and said, ‘Oh, that was cute; but here’s what the real world is like.’ It literally … I mean talk about sink or swim. It was like this high-high to this low-low as I watched the market crash. My first foray into the business, I had been doing it for what? Nine months at that point. All of a sudden, it was a barrage of calls from clients panicking, freaking out. Their deepest fears were coming true. They were losing all of their money, all of their retirement savings.
For me, being in my 20s and a college student, I didn’t fully understand the ramification of what was happening all around me. It took me years to fully comprehend the devastation that occurred over the next 18 months; but it no doubt had a lasting effect on the way I work with my clients. In a way, I’m grateful for that, because it’s definitely shaped my perspective. It’s shaped the way I look at my clients and their financial situation, helping them to understand the value of their money, and that it literally could just disappear.
Hannah: Let’s talk more about that. … What does that look like on the day-to-day as you’re talking with your clients, or in meetings with them.
Leighann: It depends on the client.
Leighann: I tend … because of that first experience as the market crashed and what not, I do tend to take a more conservative approach when it comes to planning with my clients; because … not to a debilitating extent, but my logic is this: is that you’re better off underestimating something than overestimating something, if that makes sense.
No, you’re better off looking at things and saying, “Hey look, let’s save a little bit more in the off chance X, Y, or Z happens. Let’s maybe not put all our chips in … or eggs in this basket. Let’s kind of … not get … too consumed with certain things.” I help them to understand that … things are going to happen in life. It’s better to be cautious, a little cautious, than take too much risk. I don’t even mean like investment risk; just risk in general.
Hannah: No, I think that makes a lot of sense.
With my clients, every time we have an … we review their investments now I’m like, “You know, the market’s going to fall sometime,” and just put that expectation out there that it’s going to fall. I think that changes the conversation and the perspective of investing.
Leighann: You’re absolutely right. I, too, have been doing the same thing. It’s a little bit … I’m trying to set the scene. I’m trying to plant that seed in their head, so when it does eventually happen, that they’ll … hopefully that will give them a little piece of mind, and keep them calm knowing that, ‘Hey, we planned for this. We knew there was a good chance this was going to happen, and we took these precautions in the event it did happen.’ Yeah, I’m right there with you in trying to just prepare them that these things can happen, but we’re planning for them, and it’s not the end of the world.
Hannah: Yup, it’s such an important conversation to have with clients. Yeah. The market’s going down. How long were you at that firm for?
Leighann: In total, I spent about three and a half years. I soaked up as much information as I could. I did everything from doing the compliance, which was super fun. Everything to the portfolio analysis, to financial planning, and of course, the dreaded admin responsibilities that everyone loathes to do. They certainly aren’t glorious; but what that did was it helped me to understand the operational side of the business that I wouldn’t have seen otherwise. I think that’s valuable experience that every new planner should try to get is kind of seeing all of the different facets of the business.
It’s not just sitting in front of clients and reassuring them that, “Yes, you can meet your objectives.” It’s everything else behind that, that really counts as well.
Hannah: With the three and half a years of experience, did you feel like you had a good sense on how a financial planning business was run from the admin, and compliance, and all of the different facets of that?
Leighann: I really did. I had worn so many hats over those years, advancing from part-time assistant to basically a para-planner at that point. I felt that I had kind of moved through each phase as I needed to, and learned all of these different elements of the business. Was I ready to go start my own firm at that point? Absolutely not, but I felt confident in moving … basically moving up in that direction, taking a step up into a role that had more responsibility; maybe did have some client facing work, something that just wasn’t in the cards at that current firm just due to capacity and the way … the size of the practice.
Hannah: What ended up causing you to move?
Leighann: I plateaued, basically. I think I just gotten to a point there that there was just … there wasn’t enough room for growth. It became a little stale. It was a lot of doing the same thing, day in and day out, with not much room for growth. Again, that wasn’t anyone’s fault. It’s not as if she was holding me back. It’s just that’s where the firm happened to be at that point. They were at a certain amount of clients, a certain amount of revenue. I wasn’t necessarily at the point where I was ready to be an advisor and take clients on my own, which left me in this weird gray area where there wasn’t enough room for me to grow there. I needed something that was going to get me to that level where I eventually would be able to start seeing clients on my own.
Hannah: How did you find that second job?
Leighann: The good old Financial Planning Association. One thing I always encourage new planners to do is join their local FPA chapter. The continuing education is always great. They put on a lot of really great speakers and events, and what not; but the network you’re able to build is incredible. It’s very powerful. For me, … funny story was that I actually joined the FPA because that boss at this first firm basically threatened to fire me if I didn’t join FPA. She knew how important it was to my career that I join.
Now the problem is that I’m a closet introvert and … a new term I just learned is I’m a circumstantial extrovert, so it’s only when I need to be, I have to force myself to be. The idea of joining this professional organization by all these established people when I was in my early 20s at that point was terrifying; but, I also wanted to keep my job. So, I did it. It was in that … those first couple of meetings that I started to make some connections there. I started meet … I met a few planners who were … a few steps ahead of me. I started to befriend them and kind of get … have conversations with them, what their process was, and how they got from A to B, and what that looked like for them to see if that was something that I thought could be possible for me.
Ultimately, I ended up … volunteering because I thought … they had called for volunteers; said “Hey, we have open board positions, and volunteer positions. Is anyone interested?” Everything in me screamed ‘no,’ but I raised my hand because the logical side of me knew that I needed to force myself to do something like this because what it would do is it would force me out of my comfort zone, but it would also allow me to meet other people. When you’re in that role of being in charge of something, people tend to come to you because they have to if they want to have anything to do with certain things. What it did was it allowed me or really forced me to start communicating with other people; and again, making other connections, and being involved so I could get comfortable in that kind of environment.
Hannah: Are you still a member of FPA?
Leighann: I am, yeah. Different chapter, but I am still a member. I did lapse for a year or two because one of the firms I was working for, I was just literally so busy that I could not take the time off to go to the meetings anymore. Once I left my last firm, I rejoined, because I knew I’d be able to make more of the commitment at this point.
Hannah: Okay, so you moved from this firm that was so great, that gave you so much experience, you’re plateauing. What was your next firm like? What was that experience?
Leighann: The next firm I moved on to, there was this promise of expanding my knowledge and responsibilities in working with clients. I learned a lot while I was at that firm. It wasn’t all rainbows and unicorns, unfortunately. That was one of those eye opening moments where I realized the kind of advice where I didn’t really want to be. Again, it was one of those necessary evils that I needed to experience to really hone in on who I wanted to be, what kind of advisor I wanted to be. At the end of the day, I don’t want to sound like I’m bashing them or anything, but it was definitely a mutual parting of ways, despite my introverted-ness. I’m not soft spoken, nor do I lack an opinion on most things. That can get me in a little bit of trouble, and I recognize that. Ultimately what I realized was that this firm … kind of skipping two years there, it just … that was not a good fit for me.
Hannah: What I find interesting about your story is you’re saying this wasn’t a good fit. It’s not who you wanted to be professionally; but it was still a good experience. An experience that you learned a lot from.
Leighann: It was. It’s not … the firm wasn’t … It wasn’t a bad firm. They weren’t doing bad things. They were always on the cutting edge of technology, always willing to explore things, make things better on that front. It’s just when I saw myself as an advisor, I saw myself in a particular light. It was more kind of a … friendly atmosphere of this is somebody who I would invite over to dinner. That’s how I wanted to treat my clients as if they were a part of my family. I wanted … I just saw a different vision for myself. I didn’t necessarily … agree with the way that they interacted with clients, and the way they presented themselves, I guess. It just, again, reinforced who I did want to be, and how I did not want to work. But also still, that’s invaluable experience because I’m the type of person … I don’t necessarily learn from positive reinforcement. I tend to learn from mistakes and watching people’s mistakes, and doing … learning the things I don’t want to do. Which to me, it has worked out in my favor, for the most part.
Hannah: Well, and it’s just that idea of even if you take a bad job, that’s okay.
Hannah: You don’t have to stay there forever.
Leighann: Exactly, and understanding that, and still … You’ve got to find the value in everything. Everything has a lesson. Everything has an experience. It’s up to you to really figure out what that is and make the most of it while you can.
Hannah: What was next for you?
Leighann: Once again, I reached out to my network to figure out or to see what the local landscape looked like. It wasn’t pretty. Let me tell you, it was … at that point, there wasn’t a lot of hiring going on. There weren’t a lot of firms in my purview that were independent REAs where I really wanted to work. The thing was, I was dead set on one thing. It was that I wanted to continue to work in the independent space. I didn’t want to go work for a broker, dealer, or wire house; that I had already spent, at this point, five and a half years working at REAs that were independent and autonomous.
The last thing I thought was, ‘Yeah, let’s go join Merrill Lynch and be put through the wringer, and have to cold call a bunch of people, including my friends and family.’ That just wasn’t something I was interested in doing. I was definitely … The Merrill Lynch folks, they tried to recruit me into their new advisor programs. I would give them the time of day. I’d listen to them, but again, it was one of those things where, as they were telling me about it, it was like, ‘No way. This is not … this is not what I want to do.’
The big thing about wire houses that tend to bug me is the sales mentality. I may get yelled at for saying some of this stuff by people, but that’s okay. They’re very heavy on the sales. If there was one thing I knew about myself, was that sales was not my strong suit. My very first job was as a telemarketer when I was 16 or 17. I was let go two weeks in because I was that awful. I couldn’t even get people to go for a free vacation for sitting through a seminar. If I can’t get people to take advantage of free things, like I know my sales skills are dreadful.
Hannah: Oh, that’s funny. Did you quit your job knowing what your next step was?
Leighann: At that point, again, I had had some conversations with the lead advisor there. Again, we both kind of came to the mutual understanding that it was best if I started looking for a new home, so to speak. That’s what I did. He knew I was planning to leave. I knew I was planning to leave. It was just a matter of time at that point. Even though I knew that I was kind of anti-broker/dealer/wire house deal, I accepted an offer to have lunch with … again, another member of FPA who I had met.
He was the senior VP of franchise for a pretty big broker dealer. I thought, ‘Let’s just see what he has to offer. Let’s just … Maybe he’s got some good pointers, if anything. It’s always good to just sit down and hear someone out.’ So we did. As it turned out, he had an advisor who ran … well, still runs … a franchise office and was looking to hire on a financial planner; because they were growing pretty rapidly. They could no longer handle the workload.
I had my reservations, but I contacted the gentleman and I sent my resume. I thought, ‘You know, if anything, I’ll get experience out of this.’ That’s the worst that can happen is I walk away with a little more experience. I submitted my resume. A few weeks later, went in for my first of three interviews; which was the first time that had happened. I think I had had one interview each time for the other jobs, and kind of just skated in. They were very serious, which I took as a very positive sign that they were taking this seriously and really wanted to find the right fit. Fortunately, I beat out the other candidate, and a couple weeks later was my first day. …
The number one thing I learned through that process, though, was that, that phrase everyone says: don’t judge a book by its cover. That’s ultimately what I had done, and going through this process helped me to realize that I’ve got to stop doing that. I’ve got to stop bashing wire houses and the broker dealer situation, because they’re not all the same. They’re not all awful.
Hannah: Let’s talk more about that, because I think that’s … There’s this idea that if you want to do real financial planning, you have to go work at a fee-only RAA. I hear a lot of new planners or students talk about that. That wasn’t your experience, right?
Leighann: Not with this last firm. I understood … like I still understand the desire to go work for a RAAs, because they do have a different landscape. They are more independent. There’s less red tape bureaucracy around home office and submitting these documents, and doing this through compliance. It is a little easier. I think the misconception is that they’re all the same. I certainly allowed myself to believe that; but have since realized that again, just because you’re part of Merrill Lynch, or Ameriprise, or whatever, that doesn’t mean you’re a commission hungry monster. It varies a great deal. You don’t know until you get in there and really have a conversation with someone.
Hannah: Do they do a lot of planning at this broker dealer?
Leighann: A ton of planning. That’s really what sold me on working there was that the majority of their portfolios were AUM wrap fee. Yes, they did sell some insurance products, but the great thing was they only sold them when the planning dictated it. Who was doing the planning? I was.
When I would sit there and I would say, “Hey, Mary and Steve, it looks like you’re short on life insurance according to these black and white planning numbers, maybe we should look into getting you an additional policy.” Instead of having to go to a third party, they would do it in house. I felt very confident that where there may be a conflict of interest in other situations, that that didn’t really exist in this firm. I really enjoyed that. I really liked that everything they were doing definitely was in the best interest of their clients, despite the fact that yes, they could collect certain commissions on certain products, insurance policies, and what not. That wasn’t the core of their business. It was just a small fraction of it.
Hannah: Planning really drove everything that they did.
Leighann: It really did. The lead advisor who led this franchise was hands down the most empathetic and caring human I have ever met. He was just such a phenomenal human. Watching him intervene in certain … There was some horrible things that ended up happening to a client. He went above and beyond to protect her, even when she refused to protect herself. Watching the way he treated our clients, I mean he would literally … He would take anyone off the street. If they needed help, fine. Come on in. We’ll take care of you. It didn’t matter if they had two cents or two million dollars. He didn’t care. That really was an eye opener for me, just watching someone who just … He was a phenomenal business man. He was running this great practice, generating a ton of revenue; but also doing such great things at the same time.
Hannah: For people who are going into interviews, and especially I’m thinking of students or even those earlier in their career, what are things that they can ask in the interview to see if there’s a firm like that, that they’re talking with?
Leighann: I don’t think it would be out of line to ask what their fee structure is and how … the products or services they offer, and how they charge. I think that’s an important question to ask. You want to see if it aligns with your values and what not. How they work with their clients, how they engage with them, really understand the planner or the advisor/client relationship. I think it’s important for them to understand because even if you’re young, or you’re a student, or just graduating, you still have these ideas of what you … who you are and how you want to work with clients. I think it’s important for them to know how advisors work with their clients. There are many different ways clients and advisors work together. If you want to have that touchy … I’m going to step back from that one. If you want to have … a very close relationship with your clients beyond just black and white, ‘Here’s a portfolio. Here’s this. It was nice meeting with you, see you later, Tom.’ That’s … I don’t think it’s out of line to ask those kinds of questions.
Hannah: From that difference, is that really planning? Is that kind of the core of the difference?
Leighann: I believe so. To me, planning is the heart of your personal finances. Planning is the heart of it. That is where everything should start. For me, if an advisor … If they start off the conversation and it’s all about investments, that’s always a red flag for me. Investments, yes, are necessary. They ultimately drive the plan but if you don’t have a plan in place to determine where you’re going, what good are the investments if they’re just roaming around aimlessly?
Hannah: Okay, so you’re working at this firm. You’re doing a lot of the planning work. You’re in the broker dealer space. How long were you there for?
Leighann: I was there in total for about three years. Over that time period, I must have completed upwards of 200 financial plans. Another thing that I really liked about the practice was that with their investment clients is that, they would consolidate the financial planning and the investment management. We were doing plan updates annually, which I don’t know was very common in that world; but just the way the two pieces worked together, and the fact that they were so … intertwined. We had to do these updates every year. I loved that; because for me, a plan is not … something you print out and stick on a shelf. It’s kind of a living, breathing document that is constantly changing and needs to be watered, so to speak, right? You need to pay attention to it. You need to update it because life changes really quickly. If you’re not taking that account into account in your plan, there’s a good chance you veered off track and you need to fix that. There has to be corrective action to get you back onto the path to where you need to be.
Hannah: At this point, have you … was it in your mind that you wanted to start your own firm?
Leighann: It wasn’t. I think it all boils down to my fear of … whether I thought I was capable of being a lead advisor, and I was capable of … working with clients and being the face, being what they see versus kind of hiding behind the scenes, doing the back end work of doing all the planning. That’s what I was doing. I was doing all of the financial plans. I would essentially hand them off to a lead advisor, and he would take it over from there. As far as they were concerned, I didn’t exist for a while there. To me, it was always challenge as to whether I thought I was up to the task of being the client facing advisor, and if I thought I had the confidence to do that.
At this firm, because I was doing such great work and meaningful work, I put that to the side and said, “You know what? I think I’d be okay if that wasn’t the case,” but I think deep down, I knew that at some point, I wanted to transition into being a client facing advisor.
Hannah: What ended up being the trigger that made you leave this firm?
Leighann: It was a sad day when that happened. I had learned so much working there, and I had such a great time. Unfortunately, there were some personnel changes and some personality conflicts that just made it impossible for me to continue my journey there. Again, it kind of goes back to the I’m not lacking an opinion kind of thing; which … got me into a little bit of trouble. Again, it was a mutual understanding that what I needed was more than what was there. What they were looking for was maybe a little bit different than what I was able to … give them.
Hannah: Was it a mutual leaving?
Leighann: It was. We had a kind of sit down, albeit the decision was somewhat impulsive based on the circumstances at the moment. It happened. I think the scariest part at that point, though, was that because it was impulsive, I had no exit strategy. There was no next step. There was nothing going, ‘Oh, it’s okay because I’ve lined up this interview in this next job.’ It literally was like, ‘Oh my god, what did I just do?’ That moment was filled with both relief because I was like, ‘Okay, I don’t have to deal with this kind of stuff anymore. I can kind of relax. The stress, but oh my god, … what am I going to do?’ The terror set in of, ‘Oh god.’
Hannah: It is very scary without knowing what’s next.
Leighann: Yeah, and I had never been in that position. I mean, literally since I was … 17 years old, I had had a job. If that job ended, I was immediately in another one. It just kind of continued that way. I had never not had that next step. That’s probably the planner in me. I was always planning ahead, ‘Well, what’s next? If this falls through, what’s going to happen here?’ There was always a plan in place. It was the first time where I was like, ‘Okay. I … I don’t know what I’m doing here.’ I think I was 31. There was no, ‘Oh, I’ll just go get some part-time job in the meantime.’ It was beyond that.
Hannah: How long were you unemployed before your next … job?
Leighann: Well, that’s where the fun really starts. A couple months before I had impulsively given my notice, I had begun a dialogue with a mentor of mine who was looking to retire in the next couple of years. We had kind of toyed with the idea of her potentially selling her practice to the current practice I was working with; but she didn’t really want to go that route because she was independent. They were a broker dealer. I understand that.
I started kind of poking around saying, “Well, what is your succession plan? What is the end goal here? And maybe how do I fit into this kind of thing?” It was perfect. It worked out really well, because her practice focused on the same niche that I wanted to serve. It was the perfect size client-wise, asset-wise. It was just enough for one person to handle.
I sent her a copy of my business plan, just kind of a, “Hey, just wanted to shoot this into your inbox and … you know, let me know what you think,” kind of thing. That’s where things started. We talked about it a little bit. That was … The business plan via email happened probably just a couple weeks before my impulsive decision to quit my job. There hadn’t been a lot of time to ruminate on that and figure out what her thinking was just yet.
Hannah: You had already created a business plan. Was this just something that you would kind of do in your free time? What was … Was there something that caused you to do that?
Leighann: It was actually an assignment in my practicum course for the CFE certification curriculum. It’s just one of the assignments you do all these plans, all this. Then you said ‘Hey, and then here’s the next assignment. Let’s all create a business plan. If you were to have your own financial planning practice, what would it look like?’ I took that incredibly seriously; because I looked at the assignment as an opportunity to map out my future practice as I saw it then.
So much so to the point where I actually asked him not to share it with the rest of the class, because he was just posting all on the forum. I kind of had this irrational fear, ‘Please don’t share my business plan, because this is legitimately my business plan at this point; and I don’t really want anyone ripping off my … everything I’m doing here.’ Which was silly in hindsight, because it’s not about sharing. It’s like let’s help each other out. At that point. I didn’t see that. It was just like I had spent so many hours working on that thing. I knew … I don’t know, actually. I don’t want to say that, but I assumed that the other people in the class were kind of just like … ‘Well, this is … could be it.’
They weren’t taking it seriously, and I just didn’t want to feel like I had done all that work and then someone was easily able to click save, change the name, and say, “Here’s my business plan.” Yeah, it took a while. It had been quite a few years. I think I started it in January 2012. At this point, it was April of 2015. I had spent a couple of years tinkering with it, and adjusting it, and making changes; especially as I learned more about the industry, and the different type of firms, and what not. But I was excited that it was finally able to see the light of day and wasn’t just residing on a … in a folder on my computer anymore.
Hannah: I love this so much because it’s like you knew where you wanted to go. You knew the type of business that you wanted to do. Even if you weren’t thinking, ‘Oh, I’m going to go start my own business,’ you were already formulating what you wanted.
Leighann: Again, it goes back to the … It’s the planner in me is that I’m … I had this idea, and I was like, ‘No, I can make this happen at some point,’ and I knew it. It was like, ‘Let’s play … ideal scenario here. In an ideal world, what would my practice look like?’ I always, again, chalked it up to like this would be great for it to be this way, and for this to happen, and this to happen. I think the rational side of me was like, ‘Okay, let’s not put the cart before the horse here. Let’s just slow down and take it one step at a time.’ Yeah, I’ve always had a pretty good idea of how I wanted my practice to be, even if I didn’t know when or if it would actually ever come to fruition.
Hannah: It’s like that’s really important work for planners to do. Even if you stay in a firm for the long term, it’s you’re still developing the way you think about planning and the way you think about how business should run. That’s really, really valuable.
Leighann: Absolutely. That’s where all of that operational side of planning, or operational side of the business and learning compliance, and all of those pieces, really came together to help me create this business plan.
Hannah: You send this business plan to your mentor. She gets it in her inbox. What is her response to that?
Leighann: Her first response was to send it back to me with her … red pen notes, which was appreciated; although kind of a little bit of a slap in the face because here I am thinking I had the answers to everything and I’m so smart. I was like, ‘How dare she mark up my business plan? This is my business plan.’ Then after I got over that, I was like, ‘Okay, these are actually some good notes here. I should take her advice.’ We ended up meeting for coffee a couple of weeks alter, and really starting to discuss it and talk about options.
She was really was of the mindset … She wanted to retire. She was … halfway out the door trying to figure out what her next steps were. She had already engaged in a couple of other advisors and firms to potentially partner with … her succession planning. I was a little bit late to the party here of saying, ‘Hey, can I throw my hat in the ring? And give me a shot here to see what we can come up with together.’
Hannah: At this point, how many years of experience did you have?
Leighann: At that point, I was … just over eight years.
Hannah: Okay. Did you feel like you were prepared at that point to take over a practice?
Leighann: I still had a slight reservations, just because my client facing experience was a little limited. There was no doubt that I could handle the back end of everything. I mean I had more than enough hours of working on running the technology, running the programs, doing all the back end work, running the compliance side of things, the operational side. There was never a question of that. It was more so, am I ready to handle the client interface? Again, a little bit of … a few reservations there; but nothing a good morning talk in the mirror can’t fix.
Hannah: Did she start considering you for a succession plan?
Leighann: She did, to my great surprise. She started asking me some questions about how I saw things going, kind of giving me her rundown of what the things she wanted to see if this was going to be a reality. She laid out a plan for when she was going to have her firm evaluated and doing all of those … things to get everything going there. That sounded great to me. It was, ‘Okay, she’s going to do all of this, and then once she gets the valuation, … it will be time to negotiate a potential buy out deal.’ I was like, ‘Okay, this could not be going better.’
Then, a couple months later after she had done that, she sent me and email and said, “Hey, you know, I think there’s a way where I can … hire you and get you some income for the next couple of months while we figure things out here.” I ended up going to work for her, kind of on a part-time independent contractor basis to get to know her practice and clients, so I’d have a full understanding of what I was potentially buying. That worked out pretty well.
Hannah: So you went from full time positions to a part-time position.
Hannah: Was that difficult on the personal … your financial plan, and what you needed to do to pay rent, and live?
Leighann: Oh yeah, I had no problem getting into that one.
Hannah: Can you talk about that? What was it … I mean that’s full time to part-time work. What was that like?
Leighann: When I quit my … well paying full time job, I was making good money. There was a little more in between there that kind of happened that I skipped over for right now, but ultimately what had happened was I was studying to take the CFPA exam. I thought, ‘Well, I’ll give myself three months between when I quit in May to when I took the test in July,’ and at that point, I was like, ‘Okay, I’ve got enough saved in reserves to get me through this point.’ Then it was kind of a, ‘I guess we’re going to see what happens here’ type of situation.
Once I passed the exam, and ultimately, that’s when she hired me, it was a 60% pay cut. That forced me to make some significant changes to my lifestyle. … LA is quite an expensive city. It was not easy. I burned through savings and ultimately ended up accruing some debt, which … is not the best thing to do as a financial planner. Debt’s not always a good thing. It was always with this … thought in the back of my mind that I’m doing this for the long term. Yes, it hurts in the short term and I’m making some sacrifices now. But, … it’s all going to pay off. Right?
Leighann: The question mark at the end of that one was ever so important. It was definitely tough. It hurt financially quite a bit. Like I said, I had to make some pretty serious sacrifices in order to make it work; but always with that thought in the back of mind of, ‘this is going to pay off in the long run, and it’s going to be worth it.’
Hannah: Well I guess maybe we should just ask. Was it worth it?
Leighann: Oh god, was it worth it? Yes and no. … I mean the financial struggle was tricky. It was like flashbacks of being a kid, of … Wasn’t so great. I still am paying off that debt to this day of … that I accrued in dealing with that, so that hurts every month. … In the long run, I don’t want to be that person that says ‘everything happens for a reason.’ I really think that there’s some sort of reason why it happened the way it did. I’m confident that it needed to happen for me to get to the point where I am today. So in that sense, yes, it was absolutely worth it.
Hannah: Can you tell us more about what … about that experience working for her … and that process of ‘I’m looking for a succession plan,’ you’re in there to try to see if it’s the client base that you’d want to work with.
Leighann: Sure, yeah.
Hannah: What was that like?
Leighann: It was … really exciting at first. Everything’s always exciting at first, right? Until you start to see the nitty gritty and step back and go, ‘Oh wait, wasn’t … didn’t realize this was going to be the case.’ The way I looked at it was that … if I was going to be the succession plan, I was going to buy this firm, it would give me the ability to start a practice and not have to start from scratch at that point. It would kind of give me that foundation to really form this practice into something that would be mine, and that I would then grow and turn into my own. That was the big idea behind it.
Like I said, LA is really expensive. I was, for all intents and purposes, single at the time. I didn’t have a spouse to support me in this endeavor. That really was kind of the issue there in starting my own firm was I didn’t have the financial means to do it. I thought, ‘Well, doing this, buying her firm, … that’s a viable option.’ We … The day … she had originally said that January 2016, she was going to have the valuation done on the firm; and sometime around March we would start the negotiations. Well, January came and went. Nothing happened.
Then, she told me, “Well, we’re going to do it … I’m going to do it now, as of June 30th, 2016. Then again, June came and went, and nothing happened. I started to get a little nervous. I was like, ‘I’m literally resting my future on this decision around this process,’ and it’s kind of just … lollygagging. Nothing was happening. This time frame that she had initially set out, we were just blowing it out of the water, and being kind of naïve and the buyer … I didn’t know what to do.
I couldn’t exactly take the reins and say, “Hey, you know, I’m going to go get the valuation done,” because I didn’t know the inner workings of the firm. I didn’t have access to the information to have someone do that. That was her job. That was her responsibility to take care of that. … At the one year mark of us working together, I really was starting to come to the harsh realization that maybe this was a mistake. Maybe I bit off more than I could chew, and I should have done some more due diligence.