Chapter 1

I was on a nineteen-day safari in Africa with my family, seeing big game not seen in North America outside zoos—elephants, hippos, lions, zebras, giraffes, warthogs, and more. It should have been magical—what dreams are made of. It was meant to be the trip of a lifetime.

(This is Carmine’s story. There are thousands of stories like it in the financial advisor business, differing only in the details. Vocational epiphanies occur in many settings and in many ways, but in our corner of the forest, they all have some important commonalities. If you’ve had one, are in the midst of one, or are building up to one, much of this will sound familiar.)

Something was nagging at me. I’d known for years that my employer, a Fortune 500 insurance company, seemed to care more about selling products and amassing revenue than taking care of customers’ needs, as if the two were mutually exclusive. I’d managed to work around their selling requirements, fend off the most egregious demands, build relationships even when the company encouraged quick transactions, and construct an impressive portfolio of clients.

My employer wanted slam-bam-thank-you-ma’am commissions. I had always turned them into how’s-the-family-let’s-have-coffee meetings to determine if the new product the company was pushing accrued to the client’s benefit and fit into the overall plan we had developed together for them. What’s important to me: I’m a people person who believes that financial planning is a collaborative process designed to provide for the long-term financial needs of my clients. This belief is more than a philosophy: it’s part of my DNA, my psychological constitution. As long as clients followed me, I could stay in the firm’s good graces.

In one way, the company made it effortless, frankly. They had the might of a well-capitalized corporation, economies of scale, marketplace muscle, and, consequently, reasonably priced good products. It was easy to find clients here and there who could benefit from the financial instruments they were selling, mainly when I had already earned the trust of my clients, who knew I had their best interests in mind. I could keep the corporate hounds at bay while simultaneously serving my customers.

But just before the safari, in July 2019, the dark corporate overlords decided that good enough was no longer acceptable. The massive profits, bloated Wall Street valuation, the multimillion-dollar salaries for top managers, and even the golden parachutes for C-suite mercenaries failed to slake the company’s thirst for more. They quadrupled—quadrupled—the annual sales requirement for products that I, in good conscience, couldn’t offer to four times as many clients. They simply didn’t need it.

How did the company brass determine that 4× sales was the proper benchmark? Did they evaluate customer needs and link the benefits of these insurance products to determine that we had only fully served one-fifth of those who could further prosper by purchasing these products? Ha! Not likely! They looked at revenues and decided that selling proprietary products was failing to meet their goals and decided brokers could shove these products down the throats of many more customers, need be damned.

Riding in a jeep through the jungle, surrounded by these glorious creatures of the natural world, not to mention a spectacular wife and two fabulous children, I wrestled with the problem. My wife could see I wasn’t fully present then, something I have always been adept at. Whether it’s a kid’s ball game or dinner with her, I’m good at disengaging from the mundane daily tribulations, focusing on the now, and letting my worries wait in the wings. It’s more like a coping mechanism than a talent—I need to get away from the annoying gnat bites of work and concentrate on enjoying the small moments, for which I am so grateful. But on this trip, I had an elephant-sized concern diverting my attention, and my wife knew it.

It didn’t take much thought to become evident that my choices were twofold: lower my ethical standards or disengage from my employer of seventeen years. I knew what staying meant, but what would leaving entail? It was a great unknown. It was a leap across a chasm without seeing the landing spot.

My Mensa Society application isn’t lost in the mail. I’ve never been the brightest guy in the room, even alone with my kids. I’m the guy who hires the brightest guy in the room and lets his knowledge raise our entire team. But I can usually work out the solution to a problem, especially one involving people, their actions, and feelings. In this case, though, I needed help with what to do.

Then my wife asked me the question that brought the situation into focus: If you knew what you know now when you joined the company, would you have gone to work for them?

The answer was so obviously “no” that it immediately crystallized my decision. It was time to take the plunge.

Malcolm Gladwell made the point in his best-selling book Blink that many of our best decisions are visceral, made in a moment based on the evidence our eyes and brains and experience can capture in a nanosecond without even passing through the processing regions of our brains. (I’m looking forward to Malcolm quoting us in his next book. It’s only fair, right?)

“We live in a world that assumes that the quality of a decision is directly related to the time and effort that went into making it … We believe that we are always better off gathering as much information as possible and spending as much time as possible in deliberation. But there are moments, particularly in times of stress, when haste does not make waste, when our snap judgments and first impressions can offer a much better means of making sense of the world,”¹ he writes.

As his book demonstrates, thinking too profoundly—which sometimes means at all—can be the enemy of good decision-making. Imagine that a reasonably priced Google stock drops 20 percent in one day because Elon Musk says something disparaging about it on Twitter. You don’t have to puzzle out some deeper meaning to know that, as a result, you should invest chunks of money into Google.

You know almost intuitively that Google is a great company surrounded by moats against the competition, owners of their marketplace, diversified to cushion any blows to their primary service, and that Twitter is a cesspool of inanity (or worse) and also that Elon Musk is a brilliant provocateur whose ruminations should be the food for thought, perhaps, or maybe just for entertainment but not for market movement. You would be wise to execute the trades without wasting time pouring over Google’s financial statements and analyzing its trailing price-to-earnings ratio (PE).

It was the same for me with the decision to cut bait and fish elsewhere. I didn’t just know it; I felt it in my bones. Sometimes, when the right thing to do is in front of you, you know it, even without thinking. That is the essence of Blink and of my decision that day in the jeep with my wife and kids while passing by the king of the jungle. So, my heart, head, and bones were all on board.

Great decision made; I just had to figure out how to execute this departure. And when. And what that meant, exactly. And who was coming with me? And that all the “I’s” that needed to be dotted and “t’s” that needed crossing. And a myriad of additional details, understanding that “myriad” translates to ten thousand. In other words, the torture I had just endured in wrestling with the decision was a mere preview of what was to come. I hadn’t even reached the hard part of my journey, and, as I was to discover later, even the hard part was just the beginning because there would be even more complex parts. But let’s not get ahead of ourselves.

It’s Hard to Leave

The truth is most people probably don’t have that “aha” moment the way Carmine did. For most of us, the realization that we are a square peg functioning in a round hole comes gradually, along with a growing awareness that we need to find our square hole. We come to understand that the larger firms prioritize the profit over the client, who is reduced to a mere transaction. But what exactly are they transacting?

We know they should ask: How is the client best served? Suppose the client has questions on budgeting; the firm views that this way: if we can’t monetize that narrative with one of our advisors, then we don’t want you to do it. Don’t spend your time on economically unproductive exercises. But that is the job of a financial advisor, and besides, it’s critical to success if you take a longer view and understand that we are in the relationship business.

I came to understand the burgeoning problem, both quickly and slowly, over time. That is, I understood the fundamental disconnect from my financial services behemoth employer from the jump but took my time coming around to the circumstances to leave. There was no lightning bolt, no straw that broke the camel’s back. It was a slow reckoning for me. Things were relatively good at the firm I was with. I was very successful and built a great practice with the support of other advisors in the town where I worked. However, I kept running into situations where I wanted to help a client, but the firm I was with was not very flexible.

I struggled with conundrums like this: a young executive has substantial stock options at their place of employment but minimal investible assets. Many advisors make money by taking custody of the assets at a brokerage. If the firm can’t take custody of the assets, then a broker has few other options to be paid for advice. I found that some of my best work had nothing to do with managing assets but was more tied to the advice I gave centered on financial planning. So, if clients cannot move their money out of their 401(k) or stock options, there’s no way to create revenue while helping them. After all, I wasn’t working at a nonprofit.

Under the commission model, a financial advisor generally must find a way to generate transactions that generate fees. It’s not overtly talked about but certainly always implied. Brokers and insurance agents are encouraged to sell these clients insurance policies, mutual funds, and other products loaded with invisible fees that boost the bottom line for the firm but not them. Clients then sport shiny new products that work great for the advisor and the firm that sold them without providing much value to the client and their needs. There is a better way.

Every six months, the mothership would send glossy magazines to my colleagues with photos of trips to exotic places we could take with the company if we hit our diversification requirements—a.k.a. the wide variety of products sold to clients. For a week of pampering and relaxation at the Ritz Carlton on the Caribbean Island of St. Thomas, with its white sand beaches and crystal-clear water, snorkeling, scuba diving, and margaritas, we would have to sell a certain amount of products to customers irrespective of whether they should have bought it or whether we offered the best product in its respective category.

Don’t forget that on every one of these trips, I had to attend several hours of “drinking green cultural Kool-Aid” so that the firm could legitimately book it as a business expense. If advisors desired a week of pampered life, they had to manage the portfolio of employer requirements that did not necessarily correlate with client needs. Fortunately, this practice has generally been retired.

It’s worth mentioning that not everyone has the same hair-on-fire desire to leave their employer but wants to, nonetheless. For a friend of Daren’s who asked not to be named in our book, the problem at the big bank wasn’t so much an ethical issue but one of control. He saw his colleagues get fired and escorted out for reasons he disagreed with and feared that the bank would take his book of business from him in an instant. He realized that his brokerage could “pull the rug” at any moment for any reason. After watching this, he planned his departure for months, handed in his resignation on a Friday afternoon, walked down the street to his rented office, and began making phone calls to clients—hundreds of difficult conversations over a weekend.

This friend, along with a partner, left a portfolio of one thousand clients at the bank, a completely unmanageable number that required a level of triage from the pair, leaving many—most—of their clients receiving little to no service. Think about it: a quarterly fifteen-minute conversation with each client, even if you could reach them on the first try and make arrangements for the discussion without any investment of time, would consume 250 hours or a month-and-a-half of 8-hour workdays.

Even those who work more than forty-hour weeks know that it doesn’t leave enough time for the paperwork alone, much less all the other aspects of the job. The weekend after their resignations, they reached out only to the best clients. They ended up with 280 households, enough to generate an excellent living while delivering much-improved service. They now schedule regular portfolio reviews, which was impossible with the sprawling spreadsheet of clients at the bank.

The incentives are turned on their head—or back on their feet—with a fiduciary model built on relationships rather than transactions. The financial advisor in a fee-based arrangement is wholly focused on the client’s best interest, both because serving the client’s best interest is the way to keep clients and because the more the client earns, the more the advisor earns. Making a quick “buck” isn’t the focus; instead, the focus is on building long-term relationships. Motivation for both advisor and client dovetails nicely, as it should, in a fee-based model.

As our chapter heading reminds us, leaving is nonetheless difficult. It’s not simply a matter of logic. Inertia being what it is, most of us remain on the job for months or years with this low-level dread gnawing at us as we grope around for the right opportunity and occasionally rally around the periodical good days on the current job. This rationale explains why the two of us know a hundred miserable financial advisors who love their field, career, and clients and tolerate their jobs but haven’t yet found the key to unlocking a happier future. Change is hard; significant change is extremely hard.

Marriage counselors say marriages require about four times as many good moments as bad ones to remain viable. Marriages with more than the 4× ratio of good to bad moments demonstrate strength and long-term viability. However, those that stay consistently below three times as many good moments are bound to fail. Those between three and four times exist in purgatory; they can limp along that way for a while but generally either find some new optimistic track and get above the 4× line to remain viable or drift below 3× and end.

Still, that means most marriages that end in divorce nonetheless had many more good moments than bad (not all) about which the betrothed can rhapsodize—if only to themselves—while they remain married.

In other words, it’s easy to convince yourself that things are pretty good, all things considered, after a good day, hour, or moment, especially when the alternative to feeling good about your lousy situation—a significant life change—is scary and daunting.

That’s doubly true when you know that an all-expenses-paid ski trip in the Swiss Alps is within your grasp if only you endure a little more misery. That is why it’s hard to leave. And that is why we’ve written this book. We want to replace your fear of failure, of the unknown, or the tremendous effort involved with hope for a better life for you and better results for your clients.

Once you have determined that your mental health and emotional well-being require a separation from the sales role that the corporate behemoth insists on, the next question is determining whether you are ready to cut the umbilical cord. We’ll walk you through that decision and then help you determine what kind of escape you want to manufacture and how exactly to render this change. We offer you this road map not because we’re brilliant theorists who have developed an innovative system that answers formerly inscrutable questions but because we’re a couple of guys who crossed this raging river and got to the other side, wetter, a bit bedraggled but oh so much happier and better off for making the journey.

We can tell you where the boulders are, where the rapids are raging, what will weigh you down if you bring it along with you, what you absolutely can’t leave without, and how to take each step. There is a way that happens in steps on a timeline that we know works because we’ve both independently taken it every step of the way ourselves. There’s a cadence to leaving a firm; if you understand the cadence and how it works, you can be very successful.

You Will Likely Make More Money, Not Less

This chapter brings us to a fundamental question that often holds financial advisors back from leaving the comfort and security of a big firm: Will your income take a hit? Let’s face it: if you’ve come to the realization that the relentless pursuit of revenue by corporate financial services giants, regardless of its impact on client financial well-being, doesn’t align with your client-centric values, then the primary barrier to your departure is likely compensation. Compensation, in its various forms, is a significant consideration: money, benefits, travel, perks, peace of mind, time with family, mental and emotional health, a sense of fulfillment, and so on.

The first four we’ve listed are monetary in one way or another, and because that is most of what the big firms have to offer, they do so in spades. The other four are nonmonetary, and if you are reading this, it’s likely because you’ve concluded, as we did, that these elements needed to be included in your compensation portfolio. But we get it: your kids have to eat. We have five children between us, so taking a pay cut was no more on our agenda than it is on yours.

The big firm is a giant cocoon that attempts to wrap you securely and handles all your other needs while you turn the flywheel for them. They are the proverbial bird in the hand: you know what you have with them, and barring a tectonic shift in your performance or the company’s reputation, you will have that every year. (It is worth noting that those tectonic shifts in the form of massive company scandals are not uncommon. Consider Wells Fargo and Lehman Brothers as two recent examples. In both cases, both complicit and innocent employees paid a steep price for the misdeeds of others, most of whom were in leadership positions.)

Taking the risk to create or join an independent, fee-based advisory firm involves stepping out on the tightrope without the safety net. Suppose you’re establishing a firm of your own. In that case, it may also include going for some time without income, or at least without adding any new clients, losing some established clients, and investing in a new venture—all of which amounts to taking a risk. But who knows more about managing risk than someone who counsels clients to ride the waves of the stock market? Once you’ve done your due diligence about what to expect and the steps to get there, you’ve eliminated much of the risk and can confidently charge forward.

So, will you have a bad year financially? For instance, critical expenditures might transpire in your household—you’re getting married, your spouse is returning to school, you’re building an addition to your house, your mom is moving in with you, your oldest child is leaving for college, a medical emergency, etc. From our experience, the answer is likely no. You will not likely see your income decline if you follow a plan. On the contrary, for various reasons, you are more likely to see it rise the very year you depart, and don’t forget the nonmonetary compensation.

First, if you follow a well-thought-out plan, you will be prepared when you do take the leap, resulting in a relatively smooth transition. Second, if you follow a plan and you’ve been taking care of your customers, chances are they will find you. They have a relationship with you, not necessarily with your employer. If you like your doctor and they move to another practice (that is similarly convenient and accepts your insurance), would you follow them or remain loyal to the medical practice? Almost everyone would follow the doctor they know and trust. It’s the same for financial advisors, just as it is for hair stylists, dentists, insurance agents, attorneys, certified public accountants (CPAs), and others with whom we develop personal and professional relationships.

Third, following a plan will strengthen those relationships because of your honest conversations with your clients about your ability to serve their “best interests.” Moving to an independent advisory firm can be a powerful engine for building a robust practice and strengthening future client relationships.

In 2020, when Carmine extricated himself from the golden handcuffs and struck out on his own, he had his best year ever—mentally, emotionally, and psychologically, but also monetarily—despite the pandemic and going five-and-a-half months without adding a single client while he laid the foundation of his new firm. How? Because of heartfelt conversations with his clients about his complete dedication to their best interests. The menu of options would no longer be limited to column A and column B from the firm; the universe of choices would now present itself to Carmine and his clients. An independent financial advisor can choose if a product “out of network” for the old employer is the best alternative for a client.

Daren and his friend who left a big bank have similar stories. Despite the drop in the stock market about halfway through his first year as principal at a fee-based, independent firm, his friend’s income was higher. He attributes some of that to the better service offered to fewer clients and some to the financial independence of the new arrangement. His share of the revenue doubled from 35 percent at the bank to 70 percent now. Imagine doubling the return you could get for your clients moving from one financial instrument to another: you would do it in a New York minute, even if you live near Daren in California.

For Carmine, fattening the wallet was a multilayered operation. It wasn’t one thing that boosted income; almost everything he did contributed. As a small, nimble fee-based firm, he established and leveraged an app, something the big firm, tangled up in its bureaucracy, couldn’t do. With just a couple of decision-makers, Cornerstone Planning Group’s operational efficiency is a multiple of the lumbering giants, allowing for quick pivots when necessary. As anyone in the industry knows, quick pivots have been the law of the financial jungle during the past fifteen years, and they’ve grown more abundant since about the Ides of March 2020.

Of course, anyone whose prime motivation is monetary could take a different path: they could get on the big firm merry-go-round and jump from horse to horse. You probably know some advisors who have secured big free agent offers to move their books from one firm to another. A big wirehouse dangled $2.1 million over eight years to Daren if he agreed to switch teams and maintain his production.

It is tempting for many people to bounce from firm to firm collecting the mega-signing bonus, but think about what it suggests about the value of a broker with a solid book of business. Suppose an insurance giant or brokerage powerhouse will pay you a quarter of a million plus bonuses annually. In that case, you’re worth at least half a million plus some multiple of the bonuses. Truthfully, the brokers who auction themselves to the highest bidder every few years are selling themselves short, doing little for their clients (despite the yarn they will spin as they move assets from one account to another), and simply rearranging the deck chairs on their personal Titanic.

So, Are You Ready?

Now, you have all the criteria to decide whether you’re in the frame of mind to make a momentous life decision.

How to Know If You’re Ready to Take the Leap

• Are you unhappy more than one-fifth of your time on the job? If so, you’re in the divorce zone.

• Does the company culture, the one by which they live, not the one written on the break room wall, clash with your ethos? It’s hard to live that way for long.

• Do you want to continue dividing the pie and getting the smaller slice, or are you more interested in baking the pie yourself? You’re ready to be independent.

• Do you feel you’re not serving your clients to the best of your ability because employer requirements don’t align with their best interests? Do them a favor and transition to a true fiduciary arrangement.

• Do you still have stars in your eyes over that decadent all-expenses-paid cruise up the Danube you earned for meeting product sales requirements? Maybe leaving isn’t the best choice for you right now.

• Are your emotional well-being, family life, and commitment to behave ethically just as important to you as the monetary compensation? Taking the plunge won’t reduce your income; it will just reduce its importance compared to those other things.

• Are you ready to forsake your coworkers (or be forsaken by them), work like the Tasmanian Devil for a few months, and suffer a few psychological bumps and bruises before reaching the promised land of independence? The emotional commitment to the process reduces risk to near zero.

• Are you committed to following our direction? Then let’s go.

Does what we have described sound familiar to your situation? Are you ready to change but need help figuring out where to start? We were standing at the same intersection not so long ago, facing the same trepidation you face today. The difference is that you have us to guide you across this treacherous passage. We will give you all the information you need to get you to Leave Day.

It’s all about manifesting your destiny. Let’s clarify what you’re leaving and where you’re heading because clients want to be part of something good. Let’s determine the chassis type upon which to construct that vision. We’ll reveal the options and pitfalls in moving forward and mitigate the variables that lead to failure.

We’ll paint you a picture of what you would be doing now if you were independent today. We’ll arm you with the right questions, like what you can and can’t take from the old firm, a plan to execute, and the mindset to adopt. Buckle your seatbelt and hold onto your hat. It’s going to be a wild ride.

But first, let’s look at something you might not have had access to back when you had stars in your eyes.

ARE YOU PREPARED TO GO DOWN THIS ROAD?

It’s Hard to Leave

**You Will Likely Make More Money, Not Less**

So, Are You Ready?