Breaking the “old school” image

But the self-described “Type A” personality worked to forge her own path by creating a unique business that is both popular and financially sustainable.

Simmons completed an honours degree in economics in April 2007 and began her career at Phillips Hager & North Investment Management Ltd. (PH&N) one month later. Now a certified financial planner and chartered investment manager, she cut her teeth serving the firm’s high net-worth clients.

Simmons joined PH&N in part because she enjoyed the firm’s independence. However, that situation would soon change in 2008, when PH&N was acquired by Royal Bank of Canada.

Around the same time, the global financial crisis rocked the markets and many of Simmons’ millennial peers, especially women, were feeling nervous about their finances.

“I began thinking, ‘Wow, there is a huge gap in knowledge with my peer group’,” says Simmons, who is 32 years old. “There [was] not really a place for people to go where it’s affordable if you don’t have the assets to get an advisor.”

Seeking a change from the big-bank environment and hoping to help this underrepresented demographic group in some way, Simmons saved enough money to quit PH&N in 2010 and start up the Barter Babes Project.

The goal of that one-year project was to make financial advice “accessible, fun and affordable,” Simmons says. Compensation was based on traded goods and services.

“I gave financial advice to 310 women, and I didn’t accept cash for any of it,” Simmons says.

Her clients ranged from 20 to 60 years of age – with the majority at the younger end. In exchange for payment, Simmons received bartered items such as an iPhone, a flight to Chicago, two bicycles, multiple haircuts and personal training sessions. The demand was so high that she reached capacity months before the year was up.

Despite the experiment’s lack of profitability, its popularity further emboldened Simmons to look for another way to advise these kinds of underserved clients. That’s when she decided to launch the New School of Finance, a Toronto-based company that provides online education courses and fee-based financial planning ranging from budgeting to retirement planning.

Between 75% and 80% of the company’s revenue comes from fee-based advice, while the rest is derived from online courses.

“Our main bread and butter is young families trying to buy a house, get married, pay down the rest of their student debt, have kids, navigate what that looks like and begin planning for retirement,” Simmons says.

She describes these families as being in their “daycare years” – meaning they’re facing expensive child-care and housing costs, so they often don’t have extra money to invest. As such, these clients are unable to seek guidance from advisors who have minimum asset requirements.

Often, sessions with Simmons include “stress testing” to determine whether the clients truly can afford a new home or expand their family. Simmons throws scenarios at them: What if the furnace breaks? Or the new baby is actually a set of twins?

“[Accounting for extra costs] can be a huge watershed moment for people, whereas an online calculator said they were fine,” Simmons says.

Often, she adds, these kinds of conversations can turn emotional decisions into financial decisions.

And for younger millennial clients looking to dip their toes into budgeting and tax planning, but not yet financially ready for a one-on-one session, the New School offers online courses priced below $100.

These online courses also target many millennials caught in the “gig” economy, teaching sole proprietors and freelancers how to reach business targets, track their finances, and understand GST and HST for businesses.

While the New School office now consists of a five-person team (two financial planners, one paraplanner and two support staffers), Simmons spent the first two-and-a-half years building the business out of her living room.

“It’s a really hard business model to work up front because you have to build a bigger book that doesn’t have a guaranteed annuity,” Simmons says. “If someone comes once, they’re not guaranteed to come again.”

To get her business off the ground, Simmons spent the first three years – and up to three times per week – attending networking events and lugging a projector around on Toronto’s public transit system in order to provide free educational talks. As an alternative to cold calling, Simmons says, these information sessions gave her the opportunity to build her brand and create trust with attendees.

Many of these sessions were “brunch and learns,” Simmons says, at which someone would host friends for Sunday brunch in their home while Simmons explained concepts such as TFSAs.

Another way Simmons built an audience was by contacting groups on Facebook – such as artists and self-employed professionals – and pitching free seminars.

Simmons says this audience consisted primarily of groups with members who wanted and needed financial information, but rarely had the opportunity to meet with someone who could provide advice specific to them.

“People who came and had a great experience would tell their friends,” Simmons says. “I have found that word of mouth – and we’ve never advertised – is the most impactful way we have built our book.”

Now, 80% of clients who come to the New School do so as a result of a personal referral, Simmons says. She attributes this to the “Monday effect”: friends and family discuss what they did over the weekend and, when financial matters come up, a previous client will recommend Simmons and her team. “All of a sudden, on Monday, we get a booking,” she says.

Simmons doesn’t shy away from asking for referrals, either. “At the end of every session, I look [school attendees] in the eye and say, ‘If you like the service you had here, tell someone’.”

A monthly column in the Globe and Mail and regular appearances on CBC Radio and CBC News Network’s On The Money also have helped attract clients.

However, Simmons didn’t become a go-to media resource overnight. “It took five or six years of me blogging and pitching and blogging and pitching,” Simmons says.

Although a newspaper column won’t generate immediate business, it has done wonders for her visibility. “It’s that repetitive ‘Hey, I’m a financial planner, and this is what I do’ in the background,” Simmons says. “When somebody does need something, you’re the person they think of.”

Simmons and her husband, Matt, welcomed their first child, William, in May. In her spare time, she plays piano and water-skis at her family’s cottage, north of Huntsville, Ont.

DON’T TALK DOWN TO MILLENNIALS

As the transfer of wealth from baby boomers to their children gains momentum, more and more financial advisors will be working with millennial clients.

“Advisors need to work to build trust with the next generation of clients,” says Shannon Lee Simmons, founder of the New School of Finance in Toronto.

Working with millennial clients often involves “coaching around – and adjusting – expectations,” Simmons says. For example, as millennials face rising housing costs and many experience stagnant wages, some people in this demographic can’t expect to own property as their parents did.

When advising millennials, Simmons adds, be careful not to patronize them regarding any gaps in their knowledge. Some millennials possess a cursory understanding of RRSPs, for example, and say they feel unintelligent and unimportant when advisors gloss over the topic, she says.

This feeling can halt a new client relationship in its tracks. “If you make someone feel stupid in a financial meeting,” Simmons says, “you’re done.”

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