Sheryl Garrett on the importance of making impartial financial advice accessible to all

How she created a successful hourly financial planning firm for the average person despite early mistakes

Nov 22, 2015 @ 12:01 am

By Liz Skinner

Sheryl Garrett loves financial planning now, but it took 11 years' working in the industry for the passion to bloom. The founder of the Garrett Planning Network first spent a couple of years as a broker, where she learned she hated selling products. After a few more years learning the planning ropes as an assistant and several more as an adviser, she realized her calling.

Ms. Garrett, 53, wanted to provide holistic planning services to any client who needed the help, and to do so in an affordable way. Of course, in an industry that grew up squarely focused on serving the wealthy, that's no easy task.

Despite making early mistakes — such as not charging for meetings — she created a successful hourly financial planning firm for the average person in 1998. She quickly attracted a squadron of copycat advisers and parlayed them into the Garrett Planning Network 15 years ago. It now has about 300 members.

Ms. Garrett, who is married with a 5-year-old daughter, speaks excitedly and at length about the importance of making impartial financial advice accessible to all. But ask her to recall the day President Barack Obama mentioned her eight times in a 20-minute address about fiduciary advice and she's nearly speechless from the wonder of the moment. It still gives her goose bumps.

(Related: InvestmentNews' inaugural Women to Watch list)

Liz Skinner: When was the first time you were in a leadership role?

Sheryl Garrett: My first big leadership role occurred when I was 22. I had joined a family business, working in a private business school. After I was there for three months, the director of the school, who was buying the business from the family, was hauled off in handcuffs, and I took his job. I was suddenly the director. It was trial by fire.

LS: What did you take away from that?

SG: That sometimes you just have to buck up and step up to the plate when there is no other obvious option. I had to learn how to sell, as well as learn the business and the aspects of what our program involved. I was so nervous. I spent a lot of time with Zig Ziglar tapes, trying to learn sales and recognize that if you have a good product, it sells itself, and you just have to let people know it's a good product. It was very uncomfortable, but it showed me something that I have now said to myself thousands of times, “that which does not break us makes us stronger.”

LS: How did you get into financial planning?

SG: I was a Money magazine junkie at age 19. I really wanted to know all this, but I didn't know that people did this for a living. Then I came across this charismatic lady Sylvia Porter [author of “Sylvia Porter's Money Book: How to Earn It, Spend It, Save It, Invest It, Borrow It and Use It to Better Your Life” (Doubleday, 1975)]. She was very popular at these events and she was vibrant and beaming and people liked to talk to her. When I left the business college, I started interviewing with financial services firms and ended up with four offers. I selected IDS, which is Ameriprise now, because it had the best training program. It also offered a salary for one year, so I thought that at least I would be able to pay my bills while I'm learning. I thought maybe I would grow out of the extreme sickness I felt every day at the notion of making 100 cold calls, but I just couldn't bring myself to do it. I wanted to do the work but I didn't want to have to sell to people. I kept running into people who needed advice about their mortgage, or a savings account, and I couldn't help them. Actually I did, but I couldn't earn any money by helping them. I had taxable income of about $800 my second year at IDS.

LS: How did you make it out of there?

SG: My district manager encouraged me to go to networking events and I got involved with the Business and Professional Women's Association and the American Business Women's Association. I met a host of women in different professions and backgrounds, and they embraced me and made me feel welcome. Without that kind of nurturing, I don't know if I could have held myself together. I ended up being BPW chapter president by age 26. I also got involved with the International Association for Financial Planning, a predecessor to the Financial Planning Association, and served as president of that at age 32. I also started looking for a new job and began the certified-financial-planner program because I felt like I didn't know enough to really do the right thing for people. Then I got a call from Wayne Henry, a fee-only adviser in Kansas City, Mo., who was looking for an assistant planner. It was a godsend. I got to see comprehensive, holistic planning.

LS: Was Wayne Henry a mentor, and did you have any others?

SG: Yes, from him I learned that the art of financial planning was to think comprehensively and focus on what people need from you. He was more of a family office, working for two dozen families. Wayne had great integrity, great care for clients and a great work-life balance. He always puts people first. We could only work with a limited number of clients because they needed such detailed service. Here I realized I wanted to bring that level of quality and comprehensive thinking and objectivity to all clients.

In 1995 I teamed up with Kathleen Stepp, whom I met through the IAFP. She had a fee-only practice and she had just made the first Worth 500 adviser list and her phone was ringing off the hook. I bought into her practice and we became 50-50 partners. Before doing that I had actually tried to leave the industry and I had made an offer to buy a resort. But it fell through and I joined Kathy. From her I learned to have a backbone. She taught me how to present the fee quote without cringing and to stick to my knitting and not try to be all things to all people. Here I realized my knitting was to work with everyday Americans.

LS: When did you head out on your own?

SG: I opened my own firm on April Fools' Day in 1998, and after 11 years in the industry, I fell in love with what I was doing. I finally found the right fit for me, where I could tailor the services that a client needed most urgently and make it fit within their budget. I worked with a lot of new investors and middle-income folks, and those who didn't want to turn over control of their portfolio to someone else. I started dressing casually, because I felt like the client and I needed to get intimate as quickly as possible.

LS: How did the network come to be?

SG: I was working with clients on an hourly, as-needed basis, and I told a few people in the industry what I was doing. I received some industry press and started getting inquiries from advisers and getting prospective-client inquiries. Many advisers contacted me and said they wanted to know how I was doing this, because it was something they would really like to do, but had heard that it couldn't be done. Within the first year we had close to 50 people in the network. I made lots of mistakes when I opened my practice, and I felt that if I could share the mistakes I made, and how I would do things differently, maybe I could save somebody from that same heartache.

LS: What were the biggest mistakes you made early on?

SG: I didn't charge for the actual one to two hours of meeting time when clients came in because I was afraid that people wouldn't sit down and relax and absorb our conversation if they were worried about every minute costing more. I was afraid they would be clock-watchers. I also didn't charge enough per hour. Bob Veres [now publisher of Inside Information] got ahold of me after about a year and asked how my business was going. I told him I had nearly a 100% close rate and he told me immediately that I wasn't charging enough. Those two mistakes cost me tens of thousands of dollars the first year.

LS: How do you describe your leadership style?

SG: Share, engage, inspire and then get out of the way. I want to share with my team, try to engage them on why I think it's important, inspire them to pick up the mantle and run with it, and get out of the way. My father always told me to hire people who are smarter than I am. I didn't really appreciate it until many years later.

LS: What kind of culture are you trying to build?

SG: I want my team to feel like owners. One thing I'm moving into by the end of the year is transferring ownership shares. I will still retain the majority of ownership shares, but my current staff has been invaluable. I have been blessed to attract great people. I like to think it's the mission and what we do that is the all-empowering part. I have learned that the wisdom of the group is always better than my mind alone. Not only do I have my staff, I have the member advisory board.

LS: The advisory board is made up of other hourly planners who are part of the network?

SG: Yes, nine people serve on the board for three-year terms. Today I am the sole owner, but I try not to make any important decisions unilaterally. I reach out and share what I'm thinking about and ask others what they think. We have a virtual staff call twice a week with our team and then our member adviser board has a conference call once a month.

I want to have as many viewpoints as possible because there's a lot of people with a vested interest in what we do.

LS: President Barack Obama called you out as a model for other planners in a speech earlier this year. What did it feel like to have that recognition from the leader of the free world?

SG: It felt surreal. I'm still going, “Wow.” I have watched the YouTube video multiple times and every time I watch it I'm still, “Wow.” To have financial planning recognized and me, I get goose bumps just talking about it. It still hasn't sunk in and I don't know if it ever will.

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