THE CAREER CHANGE FINANCIAL PLANNER

This insightful career change story comes from guest blogger and one-time client of mine, Michael Donahoe, CFP®, now a financial planner himself, and principal with On Course Financial Group, LLC, of Portland, ME.

I just passed the four year anniversary of when I left corporate America and headed out on my own. Since making the move I’ve experienced many surprises, both rewarding and challenging. I’ve learned some things – expect the unexpected, adapt to change quickly, and keep focused on the big picture.

Upon reflection, it seems likely that I took more risk in making my transition than most folks would have the stomach for. I had spent twenty years as a spoiled W-2 brat. Since graduating with an MBA in 1986 I held corporate positions with all the amenities: top notch medical and dental plans, retirement programs, and of course the beloved expense account.

At my jumping point I was highly regarded and well paid. My work was supported with big teams and big budgets. At the same time, I was feeling unchallenged and frustrated with the bureaucratic nature of large organizations. I wanted to find work that I could feel good about, and pursue my long-term ambition to be an entrepreneur.

I had a long-standing interest in personal financial planning. As a professional marketer who had experienced nothing but frustration with the established financial services industry, it seemed clear that there was an opportunity for professionals who offer a fresh approach. When I learned more about the fee-only service model at the University of California Berkeley, I knew at once that I wanted to be a fee-only financial planner.

I got a helpful prod when the mid sized company I worked for was acquired by the world’s largest food company. I saw thicker bureaucracy on the horizon, and decided it was time to make a move. I not only resigned from my position, but moved my family from the San Francisco Bay Area to Portland Maine to start anew as an independent fee-only financial planner. I am still trying to figure out whether doing this was more a reflection of personal confidence or being very naïve.

In advance, I did a lot of preparation, including consulting with a great financial adviser who specializes in career transitions to double check my logic. In the end it looked like it was pretty safe to launch.

Now it is four years later, and of course the experience has brought many surprises. Some have been good and some have been unpleasant.

Nothing ever goes perfectly – my unpleasant surprises:

• The ramp up of income from my financial planning business is on track but not enough to offset other negative factors. Cash flow is still a constant challenge.
• There is not an abundance of larger company employers in the state, and my wife has had difficulty finding employment in Maine. The projected income from that source did not materialize.
• I had no experience paying for my own health care and did not do a thorough job researching. Maine has a “troubled” private health insurance system which can (and did) result in enormous costs for our family of four.
• Property tax rates surprised me. Our property taxes are more than two times what we paid in California.
• Investment performance was impacted by difficult market conditions over that last four years.
• We have had to tap deeper into assets earmarked for the long term than originally projected.

Some things are going even better than expected –my key positives:

• The lifestyle change has been good for everyone in our family. I am home more, the education system is great, and we live in an old-fashioned neighborhood where children can play freely.
• After starting out, I quickly realized I did not want to work entirely alone. I was able to partner with a talented professional who shares my commitment to the highest standard of service. Together we are building an excellent reputation and business.
• The business is 100 % ours and it is growing in value. In the long run we expect that the practice will help to address our retirement goals.
• Most importantly, I love my work. What I do is adding value to the lives of individuals and families. I enjoy what I do and my clients truly appreciate it.

As a financial advisor, I repeatedly stress two points with clients: First, it is critical to take a long term view of things, and second, that financial planning is about achieving what you want from your life, not just accumulating assets.

When I compare my unpleasant surprises to my key positives it strikes me that the factors on the negative side are really short term inconveniences. Conversely, the key positives noted are a reflection of achieving what I set out to accomplish four years ago: to spend more time with family, enjoy and feel good about my work, and build financial security for my family over the long run.

The immediate challenges sometimes seem daunting. And yes I miss some things about corporate life. But when I compare my overall satisfaction with career, lifestyle, and prospects for the future, I am truly glad that I followed my dreams and passions four years ago.

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