Wins, Losses, and Lessons Learned

Journal of Financial Planning: September 2014


Vern C. Hayden, CFP®, is president of Hayden Financial Group LLC in Westport, Connecticut, contributing editor to, and author of Getting an Investing Game Plan.

It almost seems arrogant to think I have learned some lessons that you might benefit from. Yet after 48 years, there might be a few things that will interest you.

As a point of reference, it may be helpful for you to know I spent 1968 to 1972 as a life insurance agent primarily with Manufacturer’s Life. They paid all my overhead and provided a full-time secretary. They did me a favor and fired me in 1972 because I refused to transfer my newly acquired securities principals license to their captive broker-dealer. I felt it was important to be with a small, independent broker-dealer. I consider the firing a “favor” because it caused me to go to a meeting of a very small group of a new entity called the International Association for Financial Planning (IAFP, a predecessor organization of FPA). I loved the main idea of this group—that it is far better to approach a sale of any financial product from the standpoint of what people really need after you listen to them. That is far superior to just selling a product. It was more like owning a pharmacy than just selling drugs from one company. So, from 1972 on I called myself a financial planner.

As background for lessons learned, it is helpful to remember the following two things that Einstein has been quoted as saying: “We can’t solve problems by using the same kind of thinking we used when we created them,” and “Not everything that counts can be counted, and not everything that can be counted, counts.”

How to Handle Failure

I don’t remember the source, but I read somewhere that the average entrepreneur fails about four times before finally making it. Jamie, a 37-year-old client of ours, failed three times before implementing an idea where he made about $3 million in the last 18 months. He said his success was imbedded in the reasons for his previous failures.

In 1983, I moved from Mill Valley, California to White Plains, New York. I was one of three founders of Independent Financial Services (IFS). Sage Holdings, from Johannesburg, South Africa, was our funding partner, and Marine Midland Bank was a minority partner. Our mission was to build a nationwide network of financial planning offices. We leased about 10,000 square feet of prime office space, spent over a million dollars on high-quality furnishings, and hired prime staff, including an in-house attorney and CPA. The overhead was about $80,000 a month. We had the finest office space, equipment, and staff of anyone in America. All this before having even one client! My partners were all top-down corporate executives. I was the only bottom-up guy. Even though I did 68 seminars in 10 months that brought the office thousands of prospects, it was soon clear that the venture had serious and obvious problems. After three years and a loss of about $11 million, we terminated the mission.

To me, it was like losing the Super Bowl of financial planning ventures. At that point, I had no money and no source of income. Then I remembered an old Texas saying, “It doesn’t matter how much milk you spill as long as you don’t lose the cow.” I also remembered a saying, by arguably the greatest basketball coach of all time, John Wooden: “Success is never final, failure is never fatal. It’s courage that counts."

I was able to rebound by getting another planner and friend, Barry Cliff, from Silver Springs, Maryland, to invest in me. Over the next few years, I became very successful, and Barry made a great return on his investment.

From this experience I learned it is critical to know why I failed. Here are some of the reasons for failure:

  • Lack of skills
  • Lack of knowledge
  • Lack of enthusiasm
  • Over-estimated role of partners
  • Insufficient funding
  • No simple plan with options
  • Wrong people
  • Market problem
  • Inadequate product/service

Once I gained insight into each one, I looked in the mirror and said, “Okay, what are you going to do about it?” Then I created an eight-day rebound process (each one of these could be a column, but here I can only list the action):

  Day 1: Identify, define, and confront the failure.
  Day 2: Wring it out—this means to deal with it in your gut. Cry, yell, scream, do whatever it takes to get it out.
  Day 3: Get sympathy. Call friends, relatives, or anyone you want and get them to feel sorry for you, to commiserate with you. Tell them it is temporary and you will rebound. These are people who comprise your invaluable support system. Maybe it’s your wife or girlfriend if they haven’t left you.
  Days 4 and 5: Now settle down and start imagining the future. Get a picture in your mind of what you can do. I imagined I would have a very successful financial planning practice. It would consist of a small office, a secretary, and an assistant who would free me up to do marketing, etc.
  Day 6: Evaluate your passions, your skills, and the demand for your skills. This was around the year 1987, and I knew I was one of the best marketing guys in the country. My brand of educational seminars was very successful. I knew what I could do. You need to feel the same way.
  Day 7: Create a rebounding plan. My plan was to contact Barry. I showed him what my office would look like. He saw how my marketing plan would bring in the first financial planning clients in two and a half months and revenue would start to flow by the fifth month. We would break even by the end of the first year.
  Day 8: Implement! The saying goes, “Ideas are a dime a dozen, but those that are implemented are worth millions.” Twenty years later that business was sold for a few million bucks.

If you have not experienced failure, hopefully you won’t. The stakes are high because it is your life. I have only touched the surface of this subject. These two books are very helpful if you want more on the subject: Resilience: The Science of Mastering Life’s Greatest Challenges, by Stephen Southwick and Dennis Charney; and Failing Forward by John C. Maxwell.

More Life Lessons

I recently conducted a workshop on the 10 most important lessons I have learned over 48 years. Failure is the first important lesson. Here are a few others:

Manage change. Change requires a process, a plan, and a team. Change efforts fail for many reasons. Someone said, “If you don’t like change, you will like irrelevance even less.” Critical and chaotic changes taking place in our profession are happening now and will continue in the future.

Know the future leadership and management. Check out HCL Technologies ( It is a major IT company in India with 30,000 employees in 18 countries. Vice chairman Vineet Nayar created significant innovation for powerful growth of HCL. He turned unimaginative conventional management upside down. It is definitely not “customers first” that grew the company. 

Have a purpose. Know why you are building a business. My logo says, “Money is never our client … real people are.” If you know “why” the “how” is much easier.

Have a pressure release valve. This is not a small item! Mine is handball.

Pick partners, spouses, and staff wisely. Define what you are looking for, then have criteria for selecting them.

Understand how to use marketing and sales. By mastering this you can build a business. It is partly based on the skills you have, the demand for those skills, and the difficulty in replacing you.

Participate in your profession. Belong to FPA. Why? Belonging to the IAFP/FPA led to 317 interviews on CNBC and Bloomberg Television and built my business.

General Financial Planning Principles