Flagstone Financial Management recently concluded its first year in business. As I reflect on what has transpired over the last year I am thankful for this past year and very excited for the future. In some ways it feels like 2017 lasted five years and in some ways, only a month or two. We successfully received SEC approval for our Registered Investment Advisor, secured new office space and left the starting blocks sprinting. We were fortunate to transition all of the clients that fit our new firm (thanks to our clients!) which made the notion of our “start-up” feel a little more like an established business. Nonetheless, starting a new firm requires many small business decisions and “first times” that added a lot of hours to our days and I can easily say it is the hardest I have worked in a while, and I think our entire team can say the same.
In November, we dropped our broker/dealer and insurance licenses to become “fee only,” which means the only compensation we receive is the fee our clients pay us. We no longer accept commissions on investment or insurance products. We gave up the extra revenue from commissions to accomplish the following:
- Remove the conflict that commissions create
- Align our incentives more directly with our clients
- Create a transparent fee system
- Operate under a “fiduciary” standard in all that we do
- Streamline our business to focus exclusively on investment and financial planning for individuals and foundations or endowments
There are only a handful of fee-only advisory firms in Nebraska (and a small percentage of all advisors across the US) so we feel we are at a competitive advantage going forward. Additionally, our structure now fully aligns with what we would want in a financial planner if we were the client.
We have continued to grow our business thanks to the savings of our current clients, the addition of many new clients and the growth of the stock and bond markets. Thank you to all of our existing clients and centers of influence that have referred clients to us over the past year. We really appreciate it and we hope you feel you are doing an even bigger favor to the person you are referring to us! The healthy growth of our business will allow us to provide additional benefits and growth opportunities to our current employees and hire more employees in the future. This will provide additional specialized services to our clients as we all expand upon our knowledge base and increase specific subject matter expertise. We will also be working to find a bigger location for our business to provide ample space for growth in the future.
Year one of a new business is not all roses and sunshine. As mentioned above, we have all worked many extra hours to get this business off and running. We have made many mistakes and made more decisions than I anticipated we would have to make. In short, I underestimated the amount of time to get it all up and running and for all those considering your own venture . . . it is a lot of work! Despite these challenges, I wouldn’t trade struggles and accomplishments we have experienced in this first year of operation for anything else. It is so refreshing to get to run your business how you think it is best to be run and to serve the clients we serve the way we would want to be served if we were in their shoes.
Last, but certainly not the least of this year’s challenges, was the passing of my mentor, long-time business partner and friend, John Walters. I think about him often and it is a constant reminder that our time together is precious. We must look at our life and determine if we are living our life by design or by default. To the extent it is by default, consider letting us help you with your design.