The New Faces of Planning

As he prepared for his first day at the office in October 2002, Allen had every reason to think he was pretty hot stuff in the financial planning arena: He had a master’s degree from one of the top financial planning programs in the country, he’d earned his CFP, and he was just coming off a stint as president of Texas Tech’s FPA student chapter. He was convinced he was going to show the old man a few tricks. “On the technical side of things, I really thought I was going to show [my dad] all kinds of things. I would grab him and say, ‘Hey, did you know that you can do such-and-such?!’ And he would say, ‘Well, yeah,’” recalls Allen, laughing. “I really didn’t expect that. The people who have been in this business for 20, 30 years–it’s amazing how much knowledge they have.”

Another revelation, both to him and to many of his former classmates, was the amount of time it takes to build client relationships. “I thought things would happen overnight,” he says. “I didn’t realize it was going to take so long from the first handshake to a revenue stream. I don’t think most students in their 20s have sat down to think about what, for the client, goes into the decision of choosing a planner. It takes a long time.” Now that he’s dialed back his expectations, “I think it will take me five years or so to get to the point where I can breathe, and where all the work I’ve put in will start to build on itself and create referrals,” he says. “Those things just don’t happen in a year.”

Still, Allen, 26, seems uncowed by the hard work ahead. After spending much of his first year helping his father convert the firm from a mostly commission-based structure to one based primarily on fees, Allen is now focusing on gaining new clients and expanding the business. He spends time doing what he calls “warm calling” (telephoning people he knows from some point in his life), and he has set concrete goals that he hopes to achieve by the end of the year (he’ll reveal only that they’re “in the categories of clients, plans, appointments per week, and revenues”). “You have to set goals and write them down, and communicate them with someone who will hold you accountable,” he says. “If they’re not written and communicated, chances are that you won’t achieve them.”

He’s also adopted the mantra of some of the older planners he knows who suggest that “activity equals productivity.” “The more people you see, the more things will happen,” says Allen. “It’s hard to do when you’re getting started–it’s hard to get appointments, and you can always find excuses about why you can’t get them–but if you do it, things will start happening.”

Allen is already considered a partner in the firm; his father is the other partner, and there are five administrative staff members. All net income is funneled into a pot and then split between the principals along certain percentages: one percent for the amount of net income at the time Allen joined the firm, and a larger percentage for any net above that amount. “We kind of picked the percentages out of the sky, but the more we grow, the better I’ll do,” says Allen. Perhaps as a result, Allen has made it a point to focus on beefing up the firm’s infrastructure to allow for additional new hires. “If we get our systems set up correctly, we should be able to add new planners and clients without missing a beat,” he says. “Our goal is to grow as big as we possibly can.”

And Allen’s father, Eric Allen, had no qualms about making him a partner rather than an employee. “It’s kind of unique, because I think if he had his way, I would be his boss right now,” says the younger Allen. “He doesn’t want to think about the management of the firm; he wants to see clients.” Indeed, as the practice matures, Allen’s father hopes to continue to step away from management responsibilities, and he’ll eventually “just show up each day, say, ‘What do you want me to do today,’ do it, and go home,” says Allen.

As Allen works to build up the firm and chart its future, he also tries to take his own advice about planning–but not overplanning–his professional endeavors. “You’re going to fail at some things, and if you don’t screw up, you’re probably not trying enough new things,” he says. “You can’t sit on your hands strategizing all day and thinking about how you’re going to do something; at some point you have to just get out and do it.”

MARK GAJOWSKI

Strength in Numbers–Eventually

Brentwood, New York

The short (so far) but incredibly eventful career of Mark Gajowski could essentially be recreated in this way: Take the film about a stereotypical planner’s career mentioned at the beginning of this article, chop it up into a dozen pieces, resplice the clips in a seemingly illogical order, and play it back at warp speed, so that what initially covered 30 years now takes up just a third of the time.

In a way, Gajowski, 28, talks like a guy twice his age, peppering his conversations with comments about the olden days when he founded his own firm (five years ago, when he was 23) or took his fourth–or fifth–job. He’s had more work addresses in a decade than most people have in a lifetime; he’s bought new business cards more often than most people buy new shoes. While many of his peers are just finishing the first reel of the financial planning career’s standard storyline, Gajowski has “been there, done that”–and done a half-dozen other things, too. In the last 12 years (bearing in mind that 12 years ago he was still in high school), Gajowski has done the following: programmed databases for a branch manager of EF Hutton as a high school intern, worked for a 403(b) plan provider, served as a trader for a market-timing firm while in college, been the assistant to the principal of a high-end money management firm, established a professional networking group, founded his own one-man firm, moved said one-man firm into the offices of a group health and 401(k) plan provider with whom he’d forged a professional alliance, extricated himself from the alliance when it didn’t work out, moved into the branch office of an independent broker/dealer (VeraVest Financial), and, most recently, transferred all 100-plus clients to a new broker/dealer (1717 Capital Management) when VeraVest went belly-up.

If that litany doesn’t make you tired, it should. But despite all of the upheaval (not to mention the turmoil of transferring all of his client accounts to a new B/D in only two weeks), the loquacious Gajowski sounds like he’s still raring to go. “Despite all of the changes, this has been my best year ever in the business–I made the most money I’ve ever made, and I have the personal satisfaction of feeling that I’ve really gotten good at something,” he says cheerfully. “I really love this business, and I finally feel like I’m in the groove.” Besides, he says, if he’d gone the traditional wirehouse route, he’d probably be abandoning the entire industry by now, rather than eagerly looking for ways to learn and build his business.

True, that stack of various business cards with different addresses on them may raise some eyebrows. But skeptics, take heart: Gajowski has clients who have faithfully followed him through every relocation. “When I left the money management firm and went out on my own in 1999, some of the clients I’d had contact with in no other capacity than as [the principal's] assistant left him and came with me,” he says. “They said, ‘Hey, we wondered where you went, and we found your name in the Yellow Pages.’ It was amazing!” What’s more, he’s often dipped into his own pocket to pay the administrative costs to transfer clients’ accounts. “I’ve paid to cover termination fees for client’s accounts, because how could I justify their paying a $100 fee when I’m the one making them move? If they’re going to believe in me, I can’t ask them to do that.”

In any case, today Gajowski sounds eager to finally settle down in one place, with one address and one phone number that won’t change again for a long time. “Right now we’ve got so much empty space, you could play handball in here,” he jokes, referring to the space vacated by many of the VeraVest reps who left for other B/D roosts, while a core group of about a dozen (who have since signed on with 1717 Capital Management) has remained. “So we’ve got to relocate to a smaller space. But after this: No more!”

It is perhaps appropriate that Gajowski’s career has been less of a tidy progression than a series of trials by fire; in his spare time, he’s a volunteer fireman in his Long Island hometown, and claims it’s “fun” to climb from a ladder truck out onto the roof of a building that has burst into flames. Some of the trials have been more successful than others, but Gajowski says he has certainly gained new wisdom from each experience. Here are a few of the lessons he’s learned.

o Don’t put the cart before the horse. When Gajowski struck out on his own in 1999, he went all out, snapping up a pricey new printer, building an expensive Web site, and renting office space. “So here I am with my $1,000-a-month rent on my apartment, and my $1,400-a-month rental office unit. The office has a TV, which is a good thing, because I can’t afford TV at home; it has a phone, but I’ve got nobody to call. And I’m sitting in there, cold-calling people in the middle of the biggest bull market in history, eating PB&J because I have no money left,” he recalls, laughing. “If I were to do it today, I would do it so much differently. I didn’t know I didn’t need all that stuff to start a business!”

o Professional relationships are a good thing . . . During the Early PB&J Period, Gajowski founded a business networking group in the hopes of meeting potential clients or referral sources and gaining tips for building his business. Directly or indirectly, this group eventually yielded many of his clients, as well as several friends. “You can’t compete with Merrill Lynch on advertising dollars,” he says. “You have to get to know people.” The group still meets monthly, and has 35 members.

o … but don’t assume they’re the answer to everything. Through the networking group, Gajowski was introduced to the principals of a group health and 401(k) plan provider, and they decided to join forces. After blithely spending over $1,000 in legal fees on partnership agreements, Gajowski discovered that his new partners weren’t as eager to actually share revenues as he’d anticipated, and he had to terminate the relationship.

o Goldilocks was one smart gal. Gajowski was sometimes overwhelmed by running the entire one-man show himself, and today appreciates the perks of working with others in the branch office of a broker/dealer: He has a mentor right in the office; the lease, phones, and lights are paid for; he has easy access to the latest software and technology. But he wouldn’t want to work in a huge office with dozens of people, either. “When there were 50 people in here [before VeraVest closed down and many reps departed], it was hard to grab the branch manager’s ear to bounce something off him,” he says. “This size group”–about a dozen people–”seems much better.” He hopes his current arrangement will be not too big, not too small, but just right.

“I never regret having gone into business for myself,” notes Gajowski. “I learned so much about myself, and about people in general. I could write a book.” His parting counsel for aspiring planners? “Do what you say you’re going to do; admit when you don’t know the answer; be honest, never cavalier; be a lifelong learner; and have fun.” Sounds like good advice for any planner, no matter his age or level of experience.

Assistant Managing Editor Karen Hansen Weese can be reached at [email protected].