When Your Day Job Is Not Enough

More reps are moonlighting these days to fill the income gap and to fulfill their dreams.

Most days, Kevin Taylor is chatting up clients and hustling to drum up new business as a Piper Jaffray broker based in Kansas City. But two or three times a month, Taylor can be found devising a different beat — as a DJ specializing in bar and bat mitzvah parties.

It's an avocation Taylor first took up in his teens, then abandoned. When the bear market arrived, Taylor realized he couldn't afford to turn down the $1,000-per-night offers he still got to spin tunes for teens.

Two years later, he's running a thriving side business, orchestrating glitzy parties complete with entertainers, prizes and, of course, dance music. “In the past, I could say no. But the money's started to sound pretty good again,” he says.

Times are tough for retail brokers, and the swelling ranks of moonlighting reps is a clear indicator of this fact. From buying a franchise to working as an NBA scout, reps are taking on a wide variety of outside ventures to make up for falling commissions while others are visiting past passions — and getting paid for it.

Passion Plays

Certain advisors are creating new revenue streams out of long-time interests. Michael Mashak, for instance, worked as a professional basketball coach in the Continental Basketball Association for 12 years before joining AXA Advisors in La Crosse, Wisc., four years ago. Today, he keeps his hoops skills sharp scouting for the NBA.

Two years ago, Doyle Brown, a cigar aficionado who runs Reno-based Comprehensive Planners of Nevada, bought a cigar-related Web site with a group of seven other investors, all of whom were members of what he calls a “Wednesday afternoon cigar and strategy group.”

For the past year, Greg Smith, a financial planner and president of Rise Inc., in Louisville, Ky., has been playing various events about twice a month with his band. Smith plays keyboard, mandolin, guitar and harmonica.

Then there's Michael Williams. Along with his wife and another partner, the Denver financial planner is putting his deeply felt beliefs regarding education into practice by starting his own school. Williams's school, which he hopes to open in 2004, is to feature an “integrated curriculum” that will link a variety of subjects to a particular time period — ancient Rome and Greece or the Middle Ages, for example. He plans to start off with a first-grade class and methodically add others right through high school. “This is both a passion and a business,” he says.

Rep-Related Ventures

Other advisors are becoming involved in businesses that connect with their day jobs. Five years ago, Kim Mecklenburg, a broker with Mecklenburg & Assoc. in Los Angeles, started doing research on common attributes of successful reps. A former soldier who specialized in nuclear, biological and chemical weapons in the U.S. Marine Corps, Mecklenburg felt she knew something about the “can do” spirit herself, so a year ago she started a company through which she conducts workshops and seminars for brokers.

“I like brokers better than most other human beings,” she says. And she saw that the time was right to help her fellow brokers — and help herself in the process. “In a bull market, who needs me?”

More Money, More Money

Sometimes, a side business is simply a way to fill the income gap. Jeff Troiano, a financial advisor in Kennebunkport, Maine, decided a year and a half ago that he had to do something to make up for his loss of advisory income.

“When 30 percent of your portfolio goes away, so does 30 percent of your business,” Troiano says. His solution was to start a new business that could benefit him in his day job. “I wanted to diversify my income stream just the way I advise my clients to do.” So he decided to buy a franchise and hire a manager to run day-to-day operations. After a long search with a franchise consultant, he hit on a surprising choice — a pet-grooming company called Aussie Pet Mobile, which sends dog groomers in trailers to the homes of pet owners. “I didn't get into this with the intention of being a dog groomer,” says Troiana, who expects a 20 percent return on his investment over the next three years. “I wanted to own another business.”

Making Time

No matter what the motive, running a business on the side takes energy, discipline and time — sometimes too much time. A few years ago, Craig Cantera, who runs Pinnacle Investments in Biddeford, Maine, started a whitewater rafting business only to abandon it in favor of Pinnacle Log Homes, a less time-consuming endeavor that revolves around building log cabins for retirees and skiers near the Sugarloaf ski resort.

The key to success, of course, is delegating and dividing the labor. Mecklenburg, for example, runs her side business with another broker in her firm. By day, they are an advisory team — Mecklenburg is the rainmaker, and her partner executes the follow-up. Similarly, in her side business, Mecklenburg does the speaking while her partner handles the books and daily management duties.

Fred Siegel, a New Orleans advisor, has a separate staff of three run Siegel Group International, which is both a speakers' bureau and a provider of financial news. “It's worth it to spend the money [on staff],” he says. “My time is too valuable.”

Inevitably, time constraints result in hard decisions. Smith, for example, is supposed to practice once a week. But often he can't make it because of work. “You have to have your priorities,” he says. Of course, there are times when the other members have conflicts, and they simply have to turn down gigs.

Sometimes, new enterprises have turned into surprising avenues for securing new clients. Taylor, for one, has picked up about two dozen new clients over the years, thanks to his outside work. Mashak, meanwhile, has added two new clients: a coach and a basketball player.

For most reps, the benefits of moonlighting are more than financial. “I used to try to hide what I'm doing. Now I just enjoy myself,” says Smith. What's more, the work can have an almost therapeutic effect. Advisor Craig Cantera, for example, often spends part of his weekends “hammer in hand” helping with the construction of a log cabin. “It helps take my mind off the last three years,” he says.

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