Executive Summary
Welcome everyone! Welcome to the 405th episode of the Financial Advisor Success Podcast!
My guest on today's podcast is Gaetano Sacco. Gaetano is a partner and senior financial advisor at Fountainhead Advisors, an RIA based in Warren, New Jersey, that oversees approximately $900 million in assets under management for 1,000 client households.
What's unique about Gaetano, though, is how after breaking away from an insurance broker-dealer with barely $5M in assets under management, he has been able to quickly build his practice to $75 million in AUM in just 5 years in part by turning what was originally a liability for him in his 20s – being a 'young' advisor who prospective clients didn't always think was credible – into an asset, where Gaetano is now quickly growing his client base of retirees by highlighting how his 'youthfulness' as a 30-something means he's been around long enough to show that he's going to be a financial advisor for the long run, and still young enough that he can do this for another 30 years and actually be their financial advisor for their entire retirement (or basically, the last advisor they'll have to worry about picking in their lifetime).
In this episode, we talk in-depth about Gaetano's experience working in insurance sales starting soon after he graduated from college, including why the need to cold-call for business as a relative newcomer was both a challenge and a confidence-builder as he started to gain traction selling insurance products and some standalone financial plans, the factors that ultimately led Gaetano to decide to make the switch from insurance to the RIA channel and leave friends and mentors he had made in the insurance world despite the success he was having there after winning "Financial Planner of the Year" in his region of the company, and how Gaetano, now in his late 30s, has found his age to be an asset, as getting married and having kids has given him new perspectives in life to be able to better related to his clients and prospects, his years of experience shows that he has credible success, and his relatively young age helps him reassure his older clients that he can really be there for them in the long run.
We also talk about how Gaetano has built his current practice up to $75 million in just 5 years in part through client referrals that came after he got really proactive in addressing client concerns (from phone calls to webinars to additional written commentary and even crafting an expertise on PPP loans while they were available) during the COVID-induced market downturn, how Gaetano has since used in-person client appreciation events, including restaurant crawls and entertaining clients at a popular horse race, to both build loyalty among his current clients and to generate warm introductions to the friends that his existing clients bring to these events, and how Gaetano expanded his capable to be able to serve his 150 clients in part by empowering a newer advisor to take on plan-building and client-facing tasks while building his own book of business.
And be certain to listen to the end, where Gaetano shares how joining an advisor study group, and its structured cadence of 2 multi-day meetings every year, has guided him through multiple changes that allowed him to level up his own practice, why Gaetano turned down his first potentially lucrative job offer with an RIA because of the bad vibes he got from the firm and its leadership, and how Gaetano's realization that he wanted to work in the financial advice business for the long run influenced his decision to pursue a more planning-centric career path… that gives him the opportunity to wake up every day excited to meet with his clients (while still being able to maintain a strong work-life balance).
So, whether you're interested in learning about gaining credibility as a 'young' advisor, driving client referrals through a proactive service experience, or the professional benefits of participating in an advisor study group, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Gaetano Sacco.
Resources Featured In This Episode:
Gaetano Sacco: Website | LinkedIn- Fountainhead Asset Management
- Investment Wars Podcast: Apple | Spotify
- Kitces Report: How Financial Planners Actually Market Their Services (2024)
- The Phone Teacher
- Cornerstone Study Group
- Think and Grow Rich: The Landmark Bestseller Now Revised and Updated for the 21st Century by Napoleon Hill
- The Iceberg Illusion
- "Life's Been Good To Me So Far…So Why Change?" by Gaetano Sacco
- Kitces & Carl Ep 129: How Autonomy, Experience, And Team Drive Advisor Wellbeing
Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!
Are you a successful financial advisor, or do you know of one that would be a great fit for the Financial Advisor Success podcast? Fill out this form to be considered!
Full Transcript:
Michael: Welcome, Gaetano Sacco, to the "Financial Advisor Success" podcast.
Gaetano: Pleasure is all mine, Michael.
Michael: I really appreciate you joining us today. I'm looking forward to the discussion about an issue I still hold near and dear to my heart, which is the challenges that come when we start in this business, more or less right out of school in our early 20s. The challenges that come with being young in an industry, in an emerging profession that is increasingly about trust and expertise, neither of which people generally perceive you have a lot of in your early 20s. It creates all sorts of challenges about just literally how we get our careers going, how we get our clientele going, and the ways that we try to turn our youthfulness into some kind of asset or benefit instead of a liability that's dragging us down. I know you have lived this journey, and so I'm excited to talk today about what it looks to try to navigate the challenges of starting in the industry very young and how we try to turn our youth into a benefit in the process, rather than a, "Oh, you look so young. Could you actually be my financial advisor?"
Gaetano: Right, right. Well, I could definitely say that that's something that did develop over time. And in an industry where the average advisor is in their early 60s, the interesting thing is that you could actually be very young for a very long time.
Michael: I've been doing this for almost 25 years, and I'm in my mid-40s, and I'm still a decade under the average age of an advisor.
Starting From Scratch In The Insurance Sales Business [05:59]
Gaetano: Yeah, yeah. You're right. I did start in the business right out of college. I think actually what may have exacerbated that feeling of, I guess, inadequacy was I didn't go to school for finance or financial planning. I actually graduated Penn State with a degree in filmmaking, and I also had aspirations of being a musician.
So it was like, I want to say, 9 months after school, I got my first experience with prospecting, actually going in and out of venues trying to book shows for my band. And I didn't really know that that's what I was doing and that it had anything to do with a potential future career. But in the circle of people that I spent a lot of time with, there were a few people that worked at New York Life and MetLife. And as the band sort of dissolved, it was those guys that gave me the advice to give it a try. So that's how I started my career.
And when I got into...I started my career at MetLife. On top of being a young guy that felt I didn't know what I was doing, I also felt like I was many more steps behind because I had never taken a finance class in my life. And now in hindsight, when I think back about my recruiting class, there were a lot of people in that recruiting class that had never taken a finance class in their life. One of the most successful financial advisors I know was in my recruiting class and he went to pharmacy school.
Michael: Interesting.
Gaetano: When I think back to what you were talking about, about being young in the business and kind of finding your way, I think although all of that seemed like a vulnerability for me, in hindsight, it actually turned out to be somewhat of an advantage because I truly felt like I knew nothing. So I took every piece of advice from a senior advisor extremely seriously and almost followed the advice blindly. I think there's a tendency of a lot of young advisors to get advice from someone that's older, that is very successful, and they might not say it out loud, but they're like, "That doesn't work. I'm not going to do that."
Michael: You're like, "That worked when you were my age and dinosaurs roamed the earth, but you're out of touch with the current reality."
Gaetano: That's right. That's exactly right. And I just didn't feel like I could afford to do that. So, I remember this is one of those moments in my early career that is...I guess it was habit-forming. One of my managers who was an older guy, he was telling us about walk-and-talks, which for those that don't know what a walk-and-talk is, it's the actual act of walking into businesses and introducing yourself to the owner of the business to try to strike a relationship. And so everyone in my recruiting class is like, "That's crazy."
And again, I'm 24 years old. I'm living in Hoboken, New Jersey, and I couldn't afford to do it. And I'm walking to meet one of my friends and I felt like, "Well, I can't get to my friend's house until I try out this walk-and-talk thing." So I walked into a carpet and lamp store and I didn't know how to strike up that conversation. So the way I did it was I bought this lamp that was very, very expensive. I couldn't afford it, but I felt I had to do it. The lamp is very ugly. I still have it in my basement, but my wife won't let me put it anywhere for display. But I kind of look at it as a trophy because that lamp I bought and the owner happened to be...it was a small business. So the owner happened to be the person that was on the floor and he and I talked. And long story short, I wound up doing a lot of business with this guy. And I went back...you go back to your firm and you tell them the story and you have proof because you're writing the business. I will admit, Michael, I don't do walk-and-talks anymore. That's not part of my business.
Michael: Our marketing strategies do sometimes evolve over time.
Gaetano: Yeah. Yeah. But something that actually working early on in your career, it can change the path of everything that you do because all of a sudden it's like, "All right, well everyone around me is saying that these things are crazy, but that worked. What else could work if I just am open to it?" And there's a little bit of approach anxiety too. I think a lot of young advisors will scoff at strategies mainly because, and it might not be consciously, but they're nervous that if they try that, they're going to face rejection. And I have found that facing rejection more and more makes you a little bit numb to it, and then you get better at facing the rejection. And then over time, as you get older, you get more experienced and you get...your advice becomes more valuable to people, the rejection definitely starts to slow down.
Michael: Yeah. I'm fascinated. We see a version this even in the marketing studies that we do on the Kitces platform around what advisors are doing that it is astonishing how consistently effective the 'old strategies' still are. Direct mail is still producing business. Cold calling still shows up producing business.
Gaetano: Those first 18 months of this career are...I don't want to use the word miserable but I can't figure out another word to use because it's just so tough. But then I kind of look back at it too almost like glory days because certainly things...
Michael: With the lens of hindsight. It feels better after the fact.
Gaetano: Yeah. And things were certainly simpler then. I got up and I knew exactly what I had to do, whereas now, as my practice has matured, there's just a lot more involved. And I'm very grateful for it. But anytime I talk about those first 18 months, especially I feel like all advisors when they get back together with their friends that were there for those first 18 months, it's almost like 2 people that went to war together and come back and start sharing these war stories that inevitably will make you laugh.
I think that that time was really influential in my career because not only did it give me the confidence to try things but it helped me...it created the connections that I made with some of the senior advisors that I think may have been frustrated that they had tried to help some young advisors in the past that just didn't listen. So even though... I didn't really have a strong natural market or at least I didn't feel I did and so I wasn't the guy, I wasn't the young guy that came into the business that all the senior advisors knew had rich uncles and aunts that they could potentially bring into the business. It was like, "All right. Gaetano is going to have to build this up from the ground. And despite that, despite that the odds are against him, at least he listens to me, at least he comes in and asks me questions. And sometimes he listens to me blindly." But I feel like a lot of times when I think of those times, I get grateful that I ran into really good mentors because some of my earliest mentors, I don't know where I would be without them.
Taking Lessons From Senior Advisors To Gain Confidence [14:39]
Michael: Were there other bits of advice you blindly followed that turned out to work?
Gaetano: Yeah. At MetLife, we did quite a bit of cold calling. And cold calling, as anybody that's been in any kind of business that had some sort of sales orientation, it's a miserable existence. But I listened to what everybody was telling me. There's a woman, I'm not sure if she's still in business, her name was Gail Goodman who was a professional script writer for calls. And I got lucky, it was a training session at my early firm where she came in and she gave us all of these script books and trained us on it. And it was really great. It definitely helped me. I was in the office normally 7:00 or 7:30 every day and leaving not until 9:00 because at that time... I started in the business in 2010. At that point, I think there were more people picking up their phones after work. Nowadays, I can't imagine cold calling being as successful as it was back then but it sounds the data says it still does work.
Michael: It's still out there although...so does cold knocking because even if they don't pick up their phones, they are at their house.
Gaetano: Right, right, right. I think the last thing I'll say about advice that was given to me that worked was at the firm that I started at, there was a very strong emphasis on teamwork, on building teams that, looking back, I don't think they were the perfect formula for it, but this idea of having a senior advisor work with a younger advisor to take some things off of the top advisor's plate while in exchange for that, the young advisor just gets exposure to senior level advisors.
So I think back, I'm comfortable name-dropping him, my first real mentor, Mark Reddington, he converted my way of thinking from, "Look, you are a person that is there to prospect business," to, "You are a person with very great responsibility to help people and don't allow the urge to get ahead," because of course, that's my my biggest criticism of the insurance industry, is that it's so designed to make you kind of chasing new business all the time that it's no wonder why they built themselves a reputation for having salespeople representing their brand. But Mark really helped me internalize that, "Look, you have a big responsibility. You're helping people with their money and you're helping them make really important decisions that you have to take seriously. And no one's going to trust you until you are trustworthy." So again, that sounds so obvious but I'm telling you, there were young guys around me that could have heard the same advice and then they just wouldn't...they wouldn't believe it. They wouldn't take it as seriously as they should.
Michael: So now I'm wondering, as we were talking at the beginning around the challenges of youth of being young in the business, I guess I'm curious at least now in retrospect, was it literally that you were young or was it just that you had to literally take the time to get the experience and learn the things that you've learned and done the things that you've done and build up over time?
Gaetano: I think it's a really good question. I've seen a lot of people join the business at a more advanced age. I think the fancy term for that is career changers. I find that a lot of those people, the only advantage they have is that they have more friends and family that actually could use financial planning, whereas all of my friends when I was 24 were also 24. So that's not to say that they couldn't use good financial advice. It's just the kind of financial advice that isn't going to satisfy your needs as someone building a career.
Michael: Or they don't necessarily have the financial wherewithal to pay what you need to survive where you're going.
Gaetano: I think it's a little bit of both. As I matured through the insurance industry and I got good mentorship and I actually attended a couple of seminars on financial planning, I realized that one of the things that I was drawn to was this idea of helping people that I knew. My business was growing but my business was growing in a lot of ways due to cold calling people that were in their 50s or 60s. And then as I had enough clients like that that I could actually take a step back and breathe and evaluate like, "All right. Where do I want my business to go?" I saw financial planning as a means of being able to work with my friends because first off, a lot of people in my generation were reading up about financial advisors on the internet and they wanted fiduciary advice.
A lot of people my age at the time in their, at this point, mid to late 20s, were looking for help with things that insurance companies didn't have any kind of products like for, like debt consolidation and debt payoff and budgeting, and retirement planning that didn't consist of insurance products like saving strategies. And I found financial planning and specifically fee-based financial planning as the tool that could get me there.
And it was I want to say in 2017, at this point, MetLife had been acquired by MassMutual. So I was a MassMutual advisor. I was doing some money management at the time but not much. But I started doing financial plans and having clients, I think this might have even been new at the time for MassMutual where we could have clients sign a financial planning engagement agreement, pay a flat fee for the service of building a financial plan and then whether that client wound up investing in a MassMutual product or not, it didn't matter. At least now I was bringing on clients for a fee and doing the things that they needed done.
In 2017, it was my first year really committing to it, and then at the end of the year, I got this award for Financial Planner of the Year in the Tri-State area of MassMutual. And I promise, I don't say this to brag, I say this as the wake-up call that like, "All right. If I'm 20-something years old and I got..." I think the award was given to the person that got the most financial planning contracts signed. I was this like, "This can't be. This can't be where I'm going to continue this practice if I'm the one doing the most type of...the most financial plans in the whole firm."
Michael: Interesting. So this was the, "If I'm the young guy and I'm the best we've got to offer, this place doesn't have a lot to teach me."
Gaetano: Yeah, it was a moment of realization that maybe it's not that this firm doesn't have really great advisors, it's that the thing...because they did they definitely did and they still do. I still have a lot of friends over there. But where I wanted to bring my career was a direction that it didn't seem everybody was aligned with at the firm that I was at. And then simultaneously, I was working with a business coach at the time that after just a couple of sessions with me, he asked me if I ever heard of study groups.
And basically, this business coach connected me with a newly formed study group that was actually an offshoot of a more mature study group that had been around for 30 years. And basically, these older guys that had this study group had junior advisors that were working on their teams and wanted to form a study group for them so that they can all get together and build and grow the same way.
So I got introduced to...the name of our study group is the Cornerstone Study Group. And that was in 2017. And I was the only guy from the insurance industry that was in this group. Everybody at that point were independent, they were maybe dually registered, some of them already were independent RIAs. So it was a lot of things happened at once in 2017. It was the Financial Planner of the Year Award while simultaneously joining this study group and then my mind started opening to number one, maybe this career is going to be something I'm going to be in forever, and if that's the case, I need to make sure that I'm running my practice the way I want to and at the place that's going to foster success.
Michael: So I want to understand more about the study group and then one that where kind of the career journey went next. But I do want to pause for a moment though and just go back, is there a point where the youth dynamic changed and it wasn't so problematic anymore? I guess when did being young not become such a problem or a challenge?
Gaetano: All right. So I had never thought about that. I think it's a wonderful question. And I'm laughing because the first thing that's coming to mind is that that changed when I got married.
Michae: What changed?
Gaetano: I do think there is something to be said about what happens to you as a person when you get married and your life isn't all about you. I think there's just a level of maturity that my wife Talia definitely helped elevate me to, but on top of it, from a perception standpoint, I think there is something to be said about clients, most of my clients being married couples feeling more confident taking advice from a young person if that young person at least has that in common with them. And it's happened again since I had my son. My son, Adrian, was born 2 years ago and I have a lot more to relate to a lot of my clients now than I did before. So, Michael, I'm not 100% sure that that was the catalyst but I could say that as you ask me that question, that's the first thing that came to mind.
Michael: Interesting. So this effect of as you accumulate sort of the proverbial life experiences, go through our collective stages of life and as humanity, it gets easier to relate to clients that are maybe a little bit older and further along on that journey, but not too too far along. It's like I'm married, you're a married couple. I've got kids, you've got kids. Your kids are a little older than my kids, but we're connecting in a different way now.
Gaetano: Yeah. I think a social psychologist would call it social capital. There's something that a college kid doesn't know about someone that...about life until they start their first job, and there's something about a single guy living in Hoboken, New Jersey doesn't really know about life until he is married and then having kids and buying a house, and all of those things. I even think about when I'm working with clients that have questions on very specific things, it certainly comes...I think my advice falls on ears that are listening harder if I do have experience with exactly what they're talking about.
The Sweet Spot Of Industry Experience And Relative Youth [27:54]
Michael: Right. So now as you fast forward to today, you said you started in 2010, so you're 14 odd years in, so I'm presuming mid to late 30s now. Is it different now in terms of how the age dynamic shows up? Has it evolved further for you? As you said, now you're 15 years in and still 15 years younger than the average advisor.
Gaetano: I'm actually 37, I'm turning 38. I think what's happened now more recently, and I've only noticed this more recently, is that if I get referred to a client that say is in their 60s and they're about to retire, I'm getting the impression that they like the idea that I am under 40 because it means that there's a high probability that I'll be their financial advisor right through to when they pass away. And that's something that I don't think anybody that I was trying to work with in my 20s was thinking because I think if somebody had reservations with working with me in my 20s, the fact that I was inexperienced overshadowed the fact that, "Oh, yeah, this advisor could be there with me for the next 30 years," because they weren't sure if I was going to be in the business for the next 2 years.
But now when I meet with a new prospect and I can tell them that I've been in the business for 14 years, this is a career that I'm passionate about, and sometimes I don't even need to say it, they just wind up telling me, "Yeah. I could tell you're passionate, that you love what you do." And those things when the client hears, "All right, this gentleman's been here...been in this business for a long time. He sounds very competent. He sounds like he really enjoys the business. He's a partner of a reputable firm in the state," I think that their questions or potential reservations are elsewhere. They're not on my age anymore. Instead, the age can be if I was in competition, which I don't really think competition exists that much in our industry and that's a whole other conversation, I just think there's so many people to work with that I rarely...
Michael: Apathy and do nothing is usually our primary competitor.
Gaetano: Yes, exactly. But in this world where competition does exist, I imagine that if a prospect was interviewing me and interviewing somebody in the early 60s, the age part of it would be an advantage to Gaetano.
Michael: I think you make an interesting point that I feel particularly with retirees, people transitioning into retirement, there is often A, we just want to find the advisors can be with us in our journey, A, because we're tired of changing advisors having done it a couple of times in our adult lives, and B, I find that for a lot of retirees, they don't want to think about the fact that they might have to change advisors again in 10 or 15 years when they're in their 70s or early 80s and not things they want to be dealing with then.
Gaetano: But I think there's also the idea that some of these clients want consistency from them to their kids. So I've actually, over the years, worked with a lot of clients in their 50s and 60s that have then introduced me to their kids. And it's strange because now 14 years have passed and some of those kids that were 25 years old when I first started working with them are now in their early 40s or late 30s and they're the clients that everyone wants to work with. They're making 3, 4, $500,000, they're really good listeners, they're motivated to challenge themselves.
And if I was meeting them for the first time when they were already successful, then there's a possibility that they might have already had an advisor or that I would be in competition. But when their parents connect you with them when they're just starting out on their career, I think a lot of financial advisors dismiss that opportunity, but the advisors that are dismissing that opportunity, they're probably the ones that are at the back half of their career anyway. Again, that kind of comes full circle where my youth has been an asset as of late as my business has been growing.
Michael: Yeah. I work with retirees and I'll actually be here for all of yours.
Gaetano: Yeah, that's what I said. That's right.
Leveraging A Study Group To Learn And Share Industry Best Practices [33:00]
Michael: So now bring me forward a little bit to getting into the study group. And I guess I just started to visualize the industry as you noted, study groups are a thing in our industry. A lot of people are involved in study groups but there seems to be a lot of variability about what it actually means to be in a study group, like what does the study group do. So can you share with us a little bit more? How does your study group work? What do they actually do?
Gaetano: So my study group, the Cornerstone Study Group, it's designed like what I would imagine can be described as the classical version of a study group. The way we're structured is every advisor comes from a different region in the country and a different firm and...
Michael: And that's intentional to be firm diversified and regionally diversified?
Gaetano: Exactly, yeah. Because I've actually heard of some successful study groups that are advisors all within the same company. And look, at the end of the day, you could be in the same company as another advisor and you could have a completely different-looking business.
Michael: If you're insurance, BD platform, kind of same firms. Like so many different practices under a large umbrella.
Gaetano: For sure, yeah. So I'm not dismissing the idea of forming a study group within a company, but for example, at my firm, at Fountainhead Advisors, the partners get together once a month and we brainstorm. And that's kind of like a study group. It just does feel a little different when you leave your home, sometimes get on a plane, other times drive several hours to a location. It's more like a retreat because I'm removing myself from my business for a couple of days a year and I'm catching up with people that are doing things completely differently most of the time. Sometimes we cross paths and what one one advisor is doing, another advisor is doing as well. But the intentionality around coming together, exiting your business, and we all normally are putting some sort of presentation together to share with our fellow members what's going right in my business or what's going wrong.
One of our advisors, a couple of years ago, shared a story about a compliance breach or a cybersecurity hack that happened at their firm and it was a wake-up call to the rest of us. And he shared with us all of the different protocols that they put in and we were able to bring those ideas back. So it's like on one hand you have practice management discussions so that all of our practices are much more secure and run more efficiently, and then you have other sides of it where we'll talk about business development or hiring, or every now and then we'll have speakers come in that are not part of the study group, whether they're folks that represent a mutual fund company or an alternative investment company and they'll share ideas that they've come up with.
I feel like every time, I'm actually one week removed from our annual summer meeting. Every time I come back from one of these for the next 30 days, I feel shot out of a cannon, like I'm rejuvenated as if I started my career all over again. And that's really what it functions or that's what it operates as in my business, is this opportunity to step away, get re-motivated, get new ideas. And I'm also really fortunate that I have a...that I'm part of a firm that is open to new ideas. So I can bring those back, the other partners take them very seriously. And I guess most importantly, it was my study group that gave me the courage and influenced me in the first place to break away from the insurance industry and look to work full-time as a fiduciary at an RIA.
Michael: So when you come together, how many days is it? How long is it that you come together to do this?
Gaetano: Yeah, it's funny you say that because we're sort of trying to figure out the perfect formula right now. The study group was formed in 2016, so we've been around for a little while now. And there's 10 of us and it started out where we were getting together for 3.5 to 4 days twice a year. Most of the guys in the firm are in their 30s or early 40s, so we're all pretty young, industry speaking. Now we are closer to 2 days of getting together but we're still doing it twice a year, once in February and once in August.
Michael: You said you give a presentation. Is it every study group gathering, someone is the presenter for this gathering, and you're spending several days on their practice and you rotate around, or is it everybody gives a presentation? 1 hour or 2 each for each of the 10 of you? How does this work? What are you actually doing in 2, 3, 4 days that you're together twice a year?
Gaetano: Yeah, that's a really good question. We generally will have at least 2 member presentations over the course of the 2 days. We always want to have 1 roundtable discussion that we designate 1 advisor to kind of run the roundtable and be the host of it, asking everyone questions about a specific topic, and...
Michael: And you pick the roundtable topic in advance as a group.
Gaetano: Exactly. Exactly. So again, every one of the advisors in our study group is either dually registered or RIA only. So no one's at an insurance company anymore. But we had a roundtable discussion a couple of years ago specifically around the role that annuities play in financial planning. In the insurance industry, annuities play a very large role and then you find in the asset management side, sometimes at some firms they play no role at all.
We had this roundtable discussion about like, "All right. What role do they play? Let's hear more about that." So that's just one example. We did another roundtable discussion that I hosted a couple of years ago about hiring junior advisors and we went around and asked everybody their experience, what they're looking...how they're looking to develop junior advisors, what's worked, what hasn't worked. And I know you're a big fan of the iceberg illusion, the idea that the success and the accolades of a financial advisor's career are all that anyone sees kind of like the tip of an iceberg, but the big chunk of the iceberg at the bottom is where all of that stuff comes to fruition.
Michael: And it's a lot messier beneath the surface.
Gaetano: Right, right. I think our study group is designed to give everyone the opportunity to learn from their mistakes from other advisors that may have been there before. So, yeah.
Michael: How do you get everyone comfortable to share that?
Gaetano: I feel like with time we've all gotten better. But as I'm sure you know, this industry creates a lot of egos. So I think some people are better than others at allowing themselves to be vulnerable. I'd say right now though, we're at a pretty good spot because most of the members have been with us for a while and we're all friends now. If you really think about it, once you're in your 30s and you're married and you have kids, how often do you get away with a couple of your friends? For me, it's almost never except for when I go on my study group. So these guys have become somewhat an extension of my family. And that's why I'm comfortable telling them when I mess up and where I need help. And I think it goes both ways.
Michael: And financially, how does it work? Is there a cost to the group? Is it just everybody pays their own way to do the study group gathering?
Gaetano: Yeah. So I would say the short answer is we pay our own way. Part of the study group commitment is you have dues. So we have dues every meeting that we pay. You pay your own flight and then what will happen is generally when you... Again, this is for...I'll say this just in case any of your listeners aren't familiar with this, but generally, if you get a collection of advisors that all are successful in their own right and you put them in the same room, there are industry professionals that will actually pay to get time in front of us. It can almost be a detriment to the meeting though because if we bring on, if we say yes to every financial institution that wants to get in front of us to talk...
Michael: Right. It's like broker-dealer custodial platforms, asset managers, these types of folks that would want to sponsor a room full of 10 advisors with successful firms.
Gaetano: Exactly. Exactly. And we say yes to a lot of them, but that's why we have parameters that say, "Okay. Well, look, if you're hosting the meeting and you're filling meeting slots with any financial institutions, let's make sure that you make room for at least 2 presentations by members and 1 round table discussion because we don't want to go away for a few days and just sit in a room full of wholesalers." And that's an ongoing thing that we're working through because ideally, we only want the people to...we only want the presentations to be really impactful. And it's hard to do that over the course of 2 days to have every single presentation be perfect. But it's going really well. And again, I don't think I would be at Fountainhead Advisors if it weren't for their influence.
Michael: And then how do you add people, remove people? I don't even know if you've had changes since originally. How do you bring them together initially to make sure you've got the right people or you're adding the right people?
Gaetano: So we have a formal recruitment process where there's an application that you would have to submit if you're interested. The application requires references, but it also asks questions around the makeup of your business, why is this something that you're passionate about. And it also sort of tries to question or at least get to the bottom of how committed they would be to something like this because it is somewhat of a big commitment.
If the written application looks good, we move to an interview process where a couple of members, normally 2 to 3 of the members will hop on the phone with the applicant. And the goal is really to vet the person enough in advance that we're ready to extend them an invitation, maybe we're 90% ready to give...to extend an invitation to the group but the final 10% is inviting them to a meeting and asking them to put together a presentation about why they want to be in the study group. And that's the process I had to go through, that's the process that some of my best friends in the study group also had to go through. It's definitely produced strong membership, I could say that.
Michael: Because people really get the buy-in at that point, right? If you go through enough an application process to make the case, you really want to be in and engage by the time you show up.
Gaetano: Right. That's right.
Turning Down An Attractive RIA Job Offer Due To Bad Vibes [46:27]
Michael: So now help me understand the next stage of your career journey. You were at Met/MassMutual. You win Planner of the Year in the area, realize this might not be the right platform for you, the study group is saying maybe you should look at other things. So what comes next? How does this actually play out?
Gaetano: So I was in a really vulnerable place at that point because the people that I built my career with at MetLife had really become like family members. So I almost look at it as a divorce or a breakup. That was really emotional. But I interviewed a number of companies and there was one particular company that was throwing everything at me because, at this point, I didn't really have a strong advisory business or asset management business, but...
Michael: What was the state of your practice at that point?
Gaetano: Yeah. So this is 2018 and I want to say in 2018 maybe I had $5 million dollars in AUM. It was like nothing. But I had...
Michael: Because most of the business was in insurance and annuity production at this point because you were the insurance company for 8 years now.
Gaetano: That's right. That's exactly right. So where these companies were attracted to me as a potential advisor to work with them was more in the fact that I had survived and I had qualified for a number of production conferences over the years. I basically was qualifying for one of those leaders or presidents conference every year after year 3. I can't emphasize enough for listeners or especially young advisors, that's artificial success in my opinion, but it did...
Michael: What do you mean by that?
Gaetano: I think autonomy is a big part of being...of success for me. And when you're chasing new business every single year, I don't care how many awards I get. That's not what success looks like to me. So anyway, I interviewed a number of companies. One of them specifically was throwing everything at me. They wanted to give me this nice corner office in Manhattan. But I got this vibe from the guy interviewing me that just felt like the opposite relationship that I had with my mentors at MetLife/MassMutual. And it was eating me because it was tough for me to say no to this offer and it was an RIA, and it was what I wanted but I just didn't get the relationship vibe that I was looking for.
And it was my wife actually who connected me with Fountainhead Advisors because I met my wife in the industry. She was the marketing director at the MetLife firm and then she moved to a different firm, and she'd met a lot of people along the way. And she connected me with Marc Rock who was the founder of...or is the founder of Fountainhead Advisors. And she connected me with him not even for job prospect purposes. It was more like we were all going out to dinner as friends and I had shared with him that I was looking, and I had shared with him that I had this one offer on the table. And I told him who had interviewed me and who was giving me the offer and he said, "Oh, I know him." And I said, "Oh, really?"
And I played dumb. I just said, "What do you think about him?" And he said, "Well, I actually interviewed him for my firm and I have a strong stance that I will not hire anyone that I'm uncomfortable introducing to my family." It was a massive moment. It was like, "Oh, my God. That's how I feel about this guy." And I didn't even tell him that that's what I was willing,,,
Michael: That's a very nice way of, was it Marc, to kind of characterize the guy like, "I'm not going to say anything good or bad or anything, just I wouldn't hire anyone that I wouldn't introduce to my family and he doesn't work here."
Gaetano: Looking back, it's like, "Wow, that was a pretty harsh comment." But he didn't know what...
Michael: He was very diplomatic, I think.
Gaetano: Yeah, you're right. But it caught my eye and then I wound up kind of talking it over with my wife and she was like, "If you're not comfortable with the offer that you have, why don't you talk to Marc Rock? Because I've never heard anything but good things about Fountainhead. I really think that that might be a landing spot for you."
Michael: So I am a little bit more curious though. What was the problematic vibe? What was setting off red flag warning bells alerts that something didn't feel right with the other offer?
Gaetano: I had been in a culture that was very sales-oriented, and maybe it's the elevated maturity my wife kind of helped me out with, but at this point, I was working with a lot of my friends. And I was working with family members and I kind of just felt that no matter how much you offer me as a transition package because maybe I should take a step back, as a reminder, I had no recurring income at the time. So the idea of jumping to a new place and starting all over was horrifying. It was absolutely terrifying for me and I was worried that I wasn't going to be able to navigate this successfully.
Michael: And they were offering a transition deal?
Gaetano: Yeah.
Michael: Some percentage of trailing T-12 or something?
Gaetano: Yeah. Something like that. I can't even remember the specifics. But they were making it clear that it would be...that I'd be fine financially if I moved over to them. But it was like, "At what cost?" The trade-off would have been, "All right. Yeah, I can support my family during this transition, but I'm not around the people that I would want to introduce my family and friends to."
Michael: Because they were just setting off your salesy alarms even though this is an RIA. So I guess it's not producty sales, it's asset gathering sales or something similar but was still setting off your salesy alarm bells?
Gaetano: Yes. Yes. Look, good people exist in every industry, bad people exist in every industry…
Michael: Very true.
Gaetano: I've said this to clients before that just being a fiduciary isn't enough. There's more to it than that, and that's for my clients to kind of figure out in a way. I tell every new prospect before I onboard them that I take this decision that they're about to make very seriously because if they do decide to hire me, they're probably going to be working with me for a really really long time. And for that reason I...and kind of coming full circle, that's why I didn't want to take the leap and go that direction and I instead wound up picking Fountainhead Advisors.
Finding A Fit At Fountainhead Advisors [54:48]
Michael: I guess help us understand a little bit more than Fountainhead. What did they do? What were they offering? What were you going there to join them for?
Gaetano: Yeah. So I think a lot of financial advisory firms have managing directors and people in the leadership role that weren't advisors themselves, especially in the insurance industry you get a lot of people that were in the business as advisors for a short period of time then they became managers for one reason or another and then they built up...they were really good at building up a team then they wind up running a firm. And that's okay.
But Fountainhead was built by advisors for advisors. So all the founding members were advisors and they seemed to know exactly what I was good at and wanted to make sure that I just focused my time on that. So at the end of my career at the insurance industry, I was hiring customer service associates to work with me, I was interviewing junior advisors to come work with me, I was managing day to day with marketing of course, with the help of some of the marketing professionals at the insurance company. But I was really in charge of a lot of that myself and to the extent that I did have an asset management business, I was building the portfolios myself and doing research on the funds and the ETFs and any individual positions myself.
And I'm truly fascinated by all of that and I think that to some extent, I'm not bad at a lot of those things. But as I was making this transition, it became clear that where I'm best is working with my clients, with fostering relationships, building relationships. And what Fountainhead offered me and what they offer all of their advisors is look, we built infrastructure so that basically you just need to be an advisor. And everything from portfolio management, which we actually have a separate company called Fountainhead Asset Management that operates as OCIO [Outsourced Chief Investment Officer], and they build all of our model portfolios, they execute trades, they do portfolio research, tax loss harvesting.
Our Chief Investment Officer, Joe Halpern actually, he writes our market commentaries himself whereas in my previous firm, we used a market commentary that we bought from someone that distributed it to many firms. We do a monthly and quarterly market commentary that is written by our asset management team. He also hosts a podcast that just gives insight into how the Fountainhead Asset Management team makes decisions about the portfolios, which is called "Investment Wars." And it's great. And those things, I couldn't do myself. I couldn't do all of that while still managing a practice.
So when I came to Fountainhead, they were basically saying, "Look, we have infrastructure to manage your portfolios, we have infrastructure to build your financial plans so that you're not building them all yourself and using financial planning software. We have our own financial planning software here that can really be built to customize for all of your clients' needs. We have lots of staff." We've actually gotten the firm valued by a number of different companies and sometimes the criticism that we get is that we are almost overstaffed because we have so much support that if you're an advisor running your business, you can really just focus on the business and be confident that all the other stuff is going to get taken care of and it's going to be taken care of in a very professional way. What they offered me was the ability to just focus on those things that I was focusing on in year 1 and 2, but now my practice was more mature where if I did spend all my time focusing on relationships, I could really build my practice fast.
Michael: So how did this work from an economics perspective? Do you pay a platform fee? Do they get a percentage of revenue? Is it you pay this for this and that for that and you choose your stuff à la carte? How does the economic business model work as you are trying to decide where to affiliate and how to do this?
Gaetano: Yeah. So it's not à la carte. If you join Fountainhead Advisors, you're plugging into a system. And generally, the way that you pay for those services is through a grid rate. So whatever you earn after the grid rate is what you're collecting in terms of billables, and that's for everything from, to some extent, insurance business that I still do quite a bit of, but financial planning fees and asset management. It all kind of flows through that same grid.
Michael: And can I ask what was the grid payout as it were when you went from the insurance world which has one set of grid payout systems to this new platform in the independent world?
Gaetano: Yeah. So the grid rate in the insurance world is a little bit sneaky because they take a cut of all the business you collect but then you realize after you reach some level of capacity that you're going to need more stuff and they're not going to cover you for that. So I had, I don't know, an 80, 85% grid rate on the insurance side, but I was paying crazy amounts of money for additional assistance for marketing, for if I brought in a junior advisor, there was some sort of compensation I was responsible for them. So over here, the grid rate was lower. It's 70%. But as I've learned more and more, that's actually still pretty strong if you're comparing it to the rest of the industry. And I really have, at least right now, everything that I would want.
Michael: Is there anything that you still have to cover out of pocket that doesn't effectively route through Fountainhead's 30% cut?
Gaetano: Not really. So I mentioned before that my wife was in the marketing side of the business. So I do a number of things on the marketing side myself that we don't do together as a firm. And if I do that, that's my choice and I have no problem paying for it. But outside of that, no. Pretty much everything that I need is being covered by that grid.
Michael: And so when I think about that just compared to traditional industry benchmarking study, a lot of advisory firms end out somewhere in the 30 to 40% of revenue and overhead expenses, you're essentially at a hard 30 because Fountainhead just takes 30 and does your overhead.
Gaetano: Right. Right. Exactly.
Michael: So what's the marketing piece that you're doing on your own outside of that?
Gaetano: It's more client appreciation type of events. So as I mentioned, I'm a musician and I connect on a pretty deep level with a lot of my clients in my love for music. So I, every now and then, will get clients together for a concert. My wife and I really to go out to dinner. So a couple years ago, we actually did a food tour of Jersey City and we brought a big group of clients out and hired this company that had organized with 10 restaurants little bites that we would just kind of stroll the streets of Jersey City and go into these different places.
Now granted, on the firm level, we do that too. So every year, there's a horse race that's done in North Jersey, they call it The Hunt, that has...it's one of the oldest horse races in the country actually. And it's a really fun time. And we normally get a tent there and invite all of our clients to come. And I've had clients come from like Long Island. They'll drive 2.5 hours to come to this event. And they get the opportunity not just to hang out with me on a personal level but they also spend time with the other members of our team, and that winds up being a really good event each year. And that's something that is just part of the Fountainhead package.
Michael: Is this a prospecting context for you, client appreciation event, bring a friend, or is this purely existing clients retention orientation?
Gaetano: That's a good question because I would say that the primary purpose is appreciation for the relationships that we've built. And a byproduct of that is that people tell their friends. And a lot of times, we won't even be explicit about it and say to bring a friend but they'll just ask. They'll be like, "Hey, do you mind if I bring one of my friends?" And we're like, "Sure. The more the merrier." So I think it functions as both, but the purpose is to show appreciation for the clients we have.
How Gaetano Leverages Teammates To Serve 150 Clients [1:05:24]
Michael: So help us understand just what this adds up to today. What is the state of the practice at this point for you?
Gaetano: Sure. So Fountainhead is managing around $900 million in AUM. I would say that my personal practice is around $75 million. So again, actually I don't think I mentioned, when I joined Fountainhead, I had about $8 million in AUM. So that was August of 2019 that I had $8 million. Right now, I'm at $75 million.
Michael: That's a nice run over 5 years.
Gaetano: Honestly, I keep asking myself like, "All right. What is this going to slow down?" Because there's always a...growth at the beginning is kind of easy to achieve but it seems to continue to be going in the right direction. And part of that is I feel like our leadership team has done a really good job of identifying when obstacles could show up before they do. So I'm at $75 million with about 150 households. So it's a lot. It's a lot of households.
It was about 1.5 years ago that the partners had said to me "Look, you're doing great, you're growing, but we think that you're going to need some additional help." At the time, the customer service team was doing all the paperwork and the processing and they had dedicated one of the customer service associates to work with me more closely. So since then, Carly has been my main person for all business processing. And she's absolutely a rock star. She just does everything so well to the point where I have her talk to my clients about almost everything from the point of them saying, "Yeah. I'm ready to proceed," then she just takes over. And she's just so pleasant on the phone and she's great.
But it was about 18 months ago that the partner said, "All right. If you're going to keep growing, we're going to need a little bit more help." So this is where we developed the AFS program, the Associate Financial Strategist program, and that's where we recruited a couple of junior advisors and each of the senior partners were assigned a pod. So my pod has me as the business development person, the person that's managing the client relationships, Carly is doing all of my business processing, and then Ryan, who also graduated from Penn State, that's how I met him, he wants to build his own practice, but we've tried to acknowledge that building a practice at 24 years old doesn't need to be quite as hard as it was for me.
So Ryan is a member of our team and works closely with me. He's on a salary but he is building his own business. So he's bringing in his own clients. But his function is to be in every meeting with me. He takes notes for me so that I can actually listen to the client without having to type at the same time. At the end of the meeting, he sends follow-up emails. At the very beginning, it was like he would send me a draft follow-up email and then I would approve it, and that's another idea that we got from your podcast actually. And it's evolved now where he's proficient at not just the note-taking and the follow-up emails, but he's preparing all of the financial plans when we're doing financial plan reviews. He goes back, looks through all the notes from all the previous meetings, makes sure that the meeting agenda touches on everything that's relevant. He updates their financial planning dashboard so that I can go from one meeting to the next and everything is just prepared and ready to go for a meeting.
Michael: And so that's how you're managing 150 clients and not just drowning under the activity?
Gaetano: Right. Right. And eventually, I foresee a lot of my clients maybe even gravitating towards Ryan because at the end of a meeting, Ryan is now capable of having full-blown back-and-forth conversations with the client if they have questions and if they need additional clarification on follow-up. And I have not removed myself from any of that yet. I'm still part of the discussions entirely. But I'm starting to see how his development, which is significantly faster than it was for me because kind of back to the value of me having a mentor early on as I learned but I wasn't able to watch my early mentors in a meeting unless I brought the prospect to the senior advisor. So it probably took me 5 or 6 years to watch a senior-level advisor run and navigate through as many meetings as Ryan has in the first 6 months of working with me.
Michael: He's getting in the proverbial reps repetitions in much faster when he's 'just' full time in all your meetings and not only learning at meetings because he has to then go prospect and set them, in which case he spends almost all of his time prospecting and not actually sitting in on meetings.
Gaetano: That's right. That's exactly right.
Michael: And all of this, of what Carly's doing, what Ryan's doing from a business perspective, that's all covered by the Fountainhead 30%.
Gaetano: That's right. That's right.
Winning Referrals And Clients By Being Proactive During Market Turmoil [1:11:45]
Michael: So then just where did $70 million in AUM come from for the past 5 years when you were only $8 million over the first 8 or 9 years, granted insurance company focus to advisory focus will shift some of that? But that just feels like a very significant hockey stick growth curve change.
Gaetano: So I'll take a step back and say that my wife gave me this idea when I moved to write a white paper, a little article about my decision to move and publish it on LinkedIn. You, and I'm sure most of your listeners know that when you leave an insurance company, you can't take your clients with you. So I really did start brand new. But by publishing this article, and I think it's still on LinkedIn somewhere, the title of the article was "Life's Been Good to Me So Far, So Why Change?" It was a play on the Joe Walsh song.
And I talked about my decision to move and my inclination to do financial plans and to be a fiduciary, and why I thought Fountainhead Advisors was going to help me in reaching those goals. So I think the first 6 to 9 months of my transition to Fountainhead were really strong because I had a lot of people calling me after seeing that LinkedIn article saying, "Hey, that's a really cool story. I'd love to meet with you." And I think this might sound crazy, but then COVID happened, and it was awesome for my business because...
Michael: Why is that?
Gaetano: Once the market started crashing in March, the first thing was that I didn't have to do all this other stuff. I got to just work on my clients. So I was actually in San Francisco on vacation when the world shut down. And then I went from like, "All right. We're going to go to Napa Valley and have a good time," to, "Okay. We're stuck in this room and what are we going to do?" So I called every single client. Every one of my clients, they were nervous but they heard from me before they had to reach out to me.
And as everyone knows, the market crashed at 38%, the S&P 500 was down 38% in 3 weeks, but it didn't stay down very long. It came back pretty quick. So between the Fountainhead Asset Management team going on full offense putting out not just market commentaries but we hosted a number of webinars right in the midst of everything going on to make sure not only did all of our clients know what was going on, but then we got really proficient on the PPP [Paycheck Protection Program] and was providing education to business owners and even people that weren't running their own business just to give them an understanding of what the stimulus checks would look like. I think that month of turmoil turned into this massive referral source because I had never gotten more referrals than I did in April and May of 2020.
Michael: Because you were just being super proactive in investment...market commentary, let us help you with the PPP loans, and that drove activity because people were looking when times were crazy.
Gaetano: Right. Right. And so I would say that's one aspect of how by...I want to say, so it was July of 2019 I was at $8 million of AUM then I was down to $0 when I made the move. And by July of 2020, I was at $30 million. And then I want to say that by then, I probably had the majority of the clients I have now. I probably had about 100 clients after that first year. And so I've grown in clients since then for sure, but what's happened is again a lot of my clients are my age now. So they're growing with me. So over the last...
Michael: You have a lot of net contributions coming in.
Gaetano: For sure. For sure. And that's the funny thing about when you're not focusing all your time on transactional business with your clients and you have the capacity that Fountainhead has provided me to just try to help people grow their wealth, all of a sudden your conversations convert from, in the most extreme example, how much insurance can you buy, to okay how much are you saving? Are you saving enough?
Well if you don't feel you're saving enough, then let's put...let's set reminders for every time you expect a bonus and every time you expect a salary increase. And then it's me and my team's role to...if they have their annual review with their employer on February 15th, February 16th, they're hearing from me to ask like, "How did it go? Did you wind up getting the promotion that you hoped for?" "Oh, okay." "So you did get a promotion?" "Well, when's the new compensation start?" "Oh, in a month?" "All right. Well as we discussed, when you get that first new paycheck, email me a copy of your pay statement, and let's analyze how much of that wage increase you want to use to contribute to improving your lifestyle today versus how much you want to put towards all those future goals that you outlined to me during the financial planning process."
Michael: So for folks who are listening or are interested, this is Episode 405. So if you want to read a copy of Gaetano's "Life's Been Good to Me So Far Why Change," departure transition post, we'll put it in the show notes. If you go to kitces.com/405 for Episode 405, we'll have it for anybody who wants to read further.
What Surprised Gaetano The Most On His Journey [1:18:06]
Michael: So Gaetano, as you now look back over this journey of almost 10 years, the insurance company, 5-plus now with Fountainhead, what surprised you the most about building an advisory business?
Gaetano: So I think I had no clue how much I would end up enjoying it. Those first few years are so tough and I think it's very easy to see how many advisors can come to resent the business. But yeah, I do so much work with my family and friends or even people that started as clients but are now friends. I wake up every day and I rarely dread going into a meeting. I'm normally really happy that I get to talk to people all the time. If I'm on a long car ride, I naturally want to just call my friends and talk to them.
When I got into the business, it wasn't like I made a goal where I wanted to be in a business that would keep me in touch with people, but it has. And it's a really special thing when one of your friends from high school that you haven't talked to in years winds up completing a financial plan with you and then gives you a heartfelt thank you for all the work that you're doing and how much you're helping them. And a phone call like that can get me...can keep me in a good mood for 3 weeks. So yeah, that's definitely the most surprising thing so far.
The Low Point On Gaetano's Journey [1:19:39]
Michael: So what was the low point on the journey?
Gaetano: Realizing I had to make a move. I think the business can oftentimes feel very lonely. And in my experience, one generally has to rely on themselves for motivation and to get all your daily tasks done. And the early part of my career was such a vulnerable time and I got really comfortable after 9 years of being in the business. And a big part of that was because the people that I was working with were so good to me and they were...they became friends and they even became family.
I think back, my early mentor, Mark Reddington, he hosted a, it was called the Meet The Parents Weekend when after me and Talia, my at-the-time girlfriend, now wife, when we were bringing our parents together to meet for the first time, Mark and his wife Martha, they actually hosted a party at their house for our parents to meet because they had met both sets of our parents. So talk about making business personal, we were such good friends, he wound up, Mark Reddington wound up being a groomsman at my wedding. So imagine that.
All my groomsmen were in their 20s and 30s and then there was this one guy that was almost 60 years old that I wanted to be at my wedding as something...as someone that was more important than just an attendee. So you take that energy, that love and appreciation of your colleagues, and then you're making a decision to move. Oh, my God. That was so emotional. And I didn't know that I was going to...that it was going to work out. I could have made the wrong decision and go with a firm that wasn't like Fountainhead, that didn't offer me partnership and support for my business and instead, I could have been at a place where I failed. That reality didn't escape me and...
Michael: So what was it that either pulled you forward or pushed you out to be willing to make that leap?
Gaetano: I think going back to just realizing that I was going to...that this wasn't just a job, this was going to be a career that I'm in for the rest of my life. And I knew that where I was wasn't necessarily the best place for the style of business that I was looking to build, and that's financial planning. I felt like I was reading the tea leaves that I need to be at a firm that is about financial planning, about being a fiduciary, about fostering relationships that are going to last a lifetime. And yeah, Fountainhead seemed like the best place for me to do that.
What Gaetano Would Tell His Younger Self [1:22:51]
Michael: So anything else that you know now that you wish you could go back and tell you from a decade ago as you're still in the earlier stages of building and trying to figure all this out?
Gaetano: Yeah. I think especially because I had aspirations of being a musician, which is a total passion project, I wish I knew that this business would be something I could become so passionate about. Entering the business, again that first 18 months, I was just trying to survive and I really didn't like what I was doing. Quite frankly, I think it's rare for someone brand new in the business to really enjoy what they're doing because it's tough. It's a really tough business to be in.
I heard Josh Brown say once that the reason why advisors, when they've been doing it well, are compensated well is because everybody wants to be in a business where they can make a good living, but very few people are signing up to pick up the phone when the market's down 30% and talk to somebody that's panicking. And I feel like I've been blessed with a perspective that when someone is in a panic over their finances or they just feel unsettled by where their financial wealth-building path has brought them, that I can help them feel better about it. And that's awesome. I really think there are a few occupations out there other than, I'll say the medical profession where you can walk away from work and feel like you really helped people every day. And yeah, I wish I knew that this was going to be something that made me feel so good on a day-to-day basis back then.
Gaetano's Advice For Newer Advisors [1:24:59]
Michael: So any other advice you would give younger, newer advisors coming into the profession and getting started today?
Gaetano: Yeah. I would say join a study group. I kind of got lucky and fell into the study group through that coaching relationship, but I'm sure there are resources out there to find study groups either in your area or nationally. But the impact that the Cornerstone Study Group has had on my career has been so tremendous I really wish that I was in there earlier. Then again, if I hadn't been through what I had been in those first couple of years, I probably...I maybe wouldn't have found myself wanting to join a study group. I truly do believe that things happen for a reason and all of the failures that I experienced at the beginning led me to ultimately start doing financial plans and to join a study group and then ultimately to join an RIA at the caliber of Fountainhead Advisors.
What Success Means To Gaetano [1:26:12]
Michael: So as we wrap up, this is a podcast about success. And just one of the themes that always comes up is the word success means very different things to different people. And so you're on this wonderful track of success with the business, this has just, to me, exploded upwards. $75 million in 5 years is an incredible number. And so the business seems to be on a really good success path now. So how do you define success for yourself at this point?
Gaetano: So you mentioned one time in a "Kitces & Carl" episode that advisors are happiest when they have autonomy. I think it was an episode...I can't remember which one, but it was like you did an annual advisor survey or something.
Michael: Yeah. It was part of our well-being research found autonomy is a huge driver of well-being along with experience, which unfortunately, it comes with time. Autonomy, sometimes you can control more.
Gaetano: Yeah, yeah, exactly. And I would say the thing that I treasure the most about my career right now is that I can manage a strong work-life balance well enough where I'm with my son, my wife, my family, and my friends a lot. And if I were to make twice as much money but lose the autonomy that I have in that work-life balance, I would feel like I was less successful. And autonomy isn't just...to me, autonomy isn't just being able to make all the decisions and make my schedule. It's the ability to do that with peace of mind that if I step away, I have a team that is actually a member of my family and that I can be confident knowing that my clients and my business are going to be okay.
So when I was away from my study group meeting last week, earlier in the summer, I had a week where my family and I went to the Jersey Shore. When I speak of autonomy, I don't mean that I can go on vacation. It's more that I know Ryan and Carly are there for me. I know that if there's something...if a problem comes up with a client and it requires more than Ryan and Carly to intervene, I know that I have partners, Marc Rock, who I mentioned before, he'll step in and he'll treat those clients like they're his clients. And same with all of the partners in the firm. They're there for me. And I think what makes me feel like my career has been a success thus far is that that relationship between me and my team is so strong, and I think my clients really appreciate that too.
Michael: Very cool. Very cool. I love it. Well, thank you, Gaetano, for joining us on the "Financial Advisor Success" podcast.
Gaetano: This has been great, man. Thanks a lot.
Michael: Thank you. Thank you.
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