From the January 2003 issue of Investment Advisor • Subscribe!

Speaking Out

Linda Gadkowski has built her practice on a founda

At a recent seminar, planner Linda Gadkowski was in the midst of explaining the importance of accurate beneficiary designations when a young man suddenly leaped to his feet. "Wait a minute: You mean that if I die, my ex-girlfriend is going to get all of my money?" he exclaimed, thunderstruck. "Sure. If she's the beneficiary, it's all hers," said Gadkowski. The young man's eyes nearly popped out of his head. "My gosh! I've got to change that right now!" he cried amid a roar of laughter from the other workshop participants; he looked ready to sprint for the benefits office that very instant. As Gadkowski tossed him the reward given to every attendee who asks a question at her workshops--a Hershey's kiss--the young man declared, "I should be the one giving you a kiss!"

Not everyone at Gadkowski's seminars is quite so affectionate, but the general sentiment seems accurate; after all, most of the people who end up becoming her clients first encounter her standing in the front of a room wielding a PowerPoint clicker and pitching chocolates to some guy in row three. Clients and colleagues describing her speaking style use words like "energetic," "engaging," and "interactive," and say they appreciate how she sprinkles her seminars with stories about real people. It also helps that she knows how to handle hecklers, sometimes so expertly that she ends up winning them over. "She's really good at one-sentence 'Okay-you-can-shut-up-now' responses," says daughter and partner Lauren Gadkowski, 32, with a laugh. "In seminars, you always get that one person asking some wacky question about the AMT when you're talking about 529 plans, and she'll say just be like, 'Here's the answer,' and moves on. She's so good at handling them that they'll usually come up afterward to shake her hand and tell her what a good job she did."

While some people prefer the prospect of extensive dental work to that of standing up in front of a crowd, public speaking comes naturally to 58-year-old Gadkowski, an outspoken former teacher who's taught everything from special education to high school history. But these aren't seminars of the chicken-'n'-PowerPoint-in-the-Holiday Inn variety, held by a hosting planner at great expense. Gadkowski actually gets paid for giving the seminar itself, and never sends out a single mailing.

Paid to give a seminar? By whom? If you've ever worked for a company of any size, you've probably heard of employee assistance programs, or EAPs, through which employees can receive mental health counseling, employment counseling, and other services. Some EAPs also provide personal financial counseling--and that's where Gadkowski comes in. Gadkowski has contracts with four companies providing employee assistance programs in the Boston area, and she helps them provide fee-only financial counseling, either by telephone, through one-on-one meetings with employees, or, often, through on-site seminars for groups of company employees. "The companies really like it, particularly now with all the concern about people's 401(k)s and the poor economy," says Kathleen Greer, head of a 13-member EAP provider in Framingham, Massachusetts, that has a contract with Gadkowski.

Gadkowski likes the setup, too, especially since she's practically being spoon-fed new clients. "It's great: The companies are thrilled to have these workshops, because they help them retain employees; the EAP loves it because it helps them keep the company as a client. And not only do I get paid for my time, I get umpteen billion clients" out of the workshop audiences. (The contact information for her fee-only firm in Centerville, Massachusetts, appears on the seminar handouts.) "It's a strange way to market," she says, "but it works very nicely."

Often one workshop can lead to another--and possibly even several. Gadkowski recently held an EAP workshop for the staff of a large hospital, including the hospital's fundraising director. Afterward, the director invited her back to do a separate series of seminars, paid for by the hospital, to teach the public about planned giving. "If people have a chance to observe you, and see that you're good, then they'll hire you for what they need you for," says Gadkowski. Indeed, on a separate occasion, an employee who attended one of her EAP-sponsored workshops at work later hired her to give a seminar for the Boston Symphony Orchestra.

Topics for EAP-sponsored workshops run the gamut from college planning to debt management, with 401(k) planning often winning the popularity contest. Since every company's 401(k) plan rules and fund choices are different, each workshop requires some extra legwork. "Linda takes the time to find out about the employee plan before she goes in, which is really important," says Greer. "That way she knows what she's walking into." The stickiest situation is when a company's 401(k) has deadbeat fund choices or onerous rules; Gadkowski has to balance her responsibility to alert the employees against the fact that the company management is paying the EAP program to pay her to be there in the first place. (Although it's fairly easy to imagine the plainspoken Gadkowski doing so, she can't just come out and say, "Boy, this plan stinks!")"It's a very delicate situation, and she's been able to go in and help the employees without making them feel alienated toward the company," says Greer. "She's able to educate people about the kinds of questions to ask, while still balancing that she has several different clients to please."

Fine, I'll Do It Myself

Gadkowski's initial foray into the world of financial planning came less as a result of inspiration than of self-defense. After having taught for several years, she had become the owner of a Sylvan Learning Center, a tutoring center for kids. When she sold the center four years later, she suddenly had a significant chunk of money to manage, and she was determined not to lose it.

"My husband is an anesthesiologist, which got us on the call list for every broker in town," she explains. "They would call my husband at work and tell him they were buying or selling something, and my husband was so busy focusing on his profession that he'd just say yes. We kept getting burned, absolutely positively burned." When she told her accountant that she feared her Sylvan profits would evaporate in similar fashion, he suggested she become a CFP and manage the money herself. "I said, 'Okay, I will!'" she says. "So I marched myself off to Northeastern [University], and six courses later, I was a CFP."

Interestingly, the brokers who'd been phoning all those years kept on phoning, but this time to ask her to join their firms. She had four offers, but she turned every one of them down. "All of them meant that I had to sell something, and I said, 'I can't do that,'" she says. "Each one of them says to me, 'Well, then, honey, you're gonna starve.' And I said, 'Watch me.'"

Drawing upon her teaching skills, Gadkowski put together a financial planning course called Money 101, and, lacking any other convenient audience, presented it to the women in her investment club. "I said, 'Look, I'm going to market this course somehow, and I don't know how to get this going, but I'd love it if you'd take this course from me,'" she recalls. When it was over, one club member suggested she call a computer company in the area and offer the course to their employees; the member had been providing quilting classes (yes, quilting) to the tech company's workers and thought they might like a change of pace. "So I marched myself off to Marlboro, Massachusetts, where they're located, and they basically said, 'Come on down!'" she says. The company invited her to present the course to its 1,600 employees at its eight locations around the country, and also allowed her to meet with employees on an hourly basis. She soon started making contacts with other companies, and the greater coup--the EAPs--came soon afterward. Gadkowski was in business.

A Beacon of Knowledge--and CE Credits

Today, Linda Gadkowski, Inc., has three offices in Massachusetts: one in Gadkowski's home on Cape Cod, one in Boston (headed by daughter Lauren), and one in the offices of an EAP company in Framingham, which Gadkowski uses when she's in town. Since the Framingham office isn't technically hers, "my overhead at that office is nil," she points out. The d?cor varies by location ("On Cape Cod, you're not allowed to have anything but Colonial," she says dryly), and so does the clientele: Most of the Cape Cod clients are single, divorced, or widowed women, while many of the Framingham and Boston clients are dual-income professional couples who work in local high-tech companies.

As if three offices weren't enough, Gadkowski also has a whole other business to run. In 1995, she and fellow CFP Carolynn Frueh founded Beacon Hill Financial Educators, LLC, to provide continuing education courses "for CFPs, by CFPs." Frueh has a home office in Winchester, and the two women have also hired a full-time assistant at a separate location to help them with marketing and day-to-day operations of the firm. "Carolynn and I had been teaching the CFP course at Northeastern, and we decided to write an ethics course," she says. "We submitted it to the CFP board and got it approved, and then made a video of it, which was really quite unique at the time." After the success of the ethics video, they continued to develop additional courses in various formats, and today have 17 courses available, on video, on audiotape, in print, or as a live presentation. The two planners have presented CFP courses at companies ranging from Merrill Lynch and Fleet Bank to Charles Schwab and LPL.

Many of the courses are built around books written by leaders in the planning profession. "We comb the marketplace for books we think should be on everybody's shelf, create a course around it, and give credit for it," she says. "What I need in my practice is what other CFPs need in theirs. And because we are doing the job, not just teaching about it, we can do a particularly good job of staying on top of things."

Not surprisingly, courses on 529 plans are "the hottest thing out there," says Gadkowski, and interest in the touchy-feely side of planning is growing, too. One of the most significant trends, however, is the age-old debate about fees versus commissions: Should I make the switch? How do I go about making the transition? Should I leave my current B/D or brokerage? What obligations do I have to my current firm? "Issues about fee structure and compensation are huge," says Gadkowski. "When we do the ethics presentation, it often becomes a forum to air those concerns." A second major area of interest is elder care, she notes. When a client grows older, a whole crop of questions arises, and they're not easy: Is the client competent to continue making decisions? If a client's children disagree about the client's care or finances, what should be done? How does Medicaid fit in?

Gadkowski says she spends about one day a week on the Beacon Hill business and the rest of the week on her financial planning firm. But it's not a "today's Tuesday, so this must be Beacon Hill" kind of arrangement; responsibilities for both jobs are interspersed throughout each day.

Doesn't she go nuts switching gears all the time? "It is a balancing act--one minute I'm in one hat, the next minute I'm in another," she says. "But I think it comes from raising three kids: When you have two kids, you have one hand for each kid. When you have three, you really have to think about how you're going to juggle who is going where, and you learn to balance things."

Like Mother, Like Daughter

Since last year, Gadkowski has had her daughter Lauren to help keep the plates spinning. Lauren, who passed her CFP exam in January 2002, is the head honcho of the Boston office, and she plans to take over an increasing number of the employee presentations to cut down on her mother's drives into the city. As a former teacher herself, Lauren already has presentation skills; she also has experience giving 401(k) seminars, which she gained while employed with Putnam Investments.

As Lauren points out, being her mother's "exit strategy" has its pros and cons. "The good part is that I'm exposed to people who might not otherwise have given me a shot, she says. "The bad part is that a lot of times they still want her. I find that I really have to convince them that I'm good at what I do." But overall, working with her mother has gone well so far. "We agree on how to run the business, and we agree on recommendations to clients," she says.

Interestingly, Linda has a less rosy view of the first few months of partnership--at least her side of it. "I had a heck of a time separating being Mom and being a business partner, particularly since I'd run the business myself for 12 years," says Linda. As a result, they hired a business coach for Lauren, and now Lauren discusses many of her business concerns with the coach, not her mother. "We needed someone to act as a consultant, because my ideas aren't always right; they're just my ideas," says Linda. "Lauren needs to be able to run the ship her style, not my style. This has worked out beautifully." Lauren speaks weekly with the consultant by phone, and can also call with questions on an as-needed basis.

Of course, with two other daughters, Linda had to consider how her partnership with Lauren would affect the others financially. Her solution is surprisingly simple: Lauren will receive the planning firm, the second daughter received a fully paid-for medical school education, and the third will receive a home Linda currently owns that has an approximately equal value.

Question of the Hour

As a rule, Linda Gadkowski charges an hourly rate ($140 per hour) for client meetings, but she does handle asset management for about 20 clients. The average meeting lasts two hours, "so they're usually looking at around a $300 bill," she says. Clients who receive asset management services are charged 0.5% of assets, regardless of the size of their portfolios. "The clients are confused enough to begin with, so this way they at least understand what they're paying," she says. "You've got to keep it simple."

Gadkowski makes sure that all clients, even those paying hourly, know that they won't be charged for quick phone calls. For one thing, it's a big selling point; prospective clients are always relieved that they can call back to double-check this or that without racking up a bill, she says. It's also a way to keep misunderstandings to a minimum. "I'm an arbitrator for the NASD, and my experience has been that if the communication lines had been left open, a lot of problems would never have occurred," she says. "[This strategy] keeps my errors and omissions problems at zero, and I consider that cheap." If a client's phone call is going to last more than five or ten minutes, she'll either suggest that the client come in for a consultation or work out a payment arrangement for the additional phone time.

Linda Gadkowski has combined a long-established strategy--the seminar--with a fairly new one, that of charging on an hourly basis for her time whether she's presenting a workshop or meeting with a client. It's hard to argue that it hasn't been successful, since the clients' positive reactions sometimes make it hard to tell who's working for whom. Recently, after a day of back-to-back employee seminars (for which she was being paid, mind you), the company's HR manager waltzed in with a huge bouquet of flowers to thank Gadkowski for her energetic presentations. "So there I am, when I get home, putting a thank-you note for the flowers in one envelope, and a bill in another," laughs Gadkowski. "I wonder which one is going to hit her desk first!"

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