After years of working for a big bank, including work as a financial advisor for Merrill Lynch, Shannon McLay saw an opportunity to create a financial services company that actually cares for its clients — more as humans and less as account numbers — all while providing them the services and financial literacy they needed. From McLay’s point of view, money is personal, it stirs emotions, and people aren’t algorithms. Most financial services companies can come across as stuffy, lack an empathetic touch to an individual customer and only care insofar as they can sell products like investments, bank accounts, credit cards, loans, and insurance policies. So she founded the Financial Gym, a financial services company from the future. Headquartered in Manhattan, staff are dressed less like banking advisors and more like gym trainers — that is, in t-shirts and sneakers. Clients are invited to come in often — like a gym — where they can go over debts, goals, and plans with their advisors over a glass of wine. McLay sat down with NASDAQ Entrepreneurial Center to share her entrepreneur story thus far.
What does “entrepreneurship” mean to you?
Entrepreneurship is the practical application of your dream or passion.
How did the idea for Financial Gym come about?
I came up with the idea for my company while working as a financial advisor at Merrill Lynch. Clients needed to have a minimum of $250,000 in assets to work with a Merrill Lynch financial advisor, and while I developed a number of clients who met this hurdle, I also met significantly more people who didn’t have the assets but wanted to speak to a human being about their finances. I worked with a number of these people on the side and called them my “pro bono” clients because I didn’t have a way to take the money they wanted to pay me, but I wanted to help them. After one pro bono client told me that I was “saving her life” after giving her a financial plan, I realized I needed to create a company that would work with people like her. I wanted to create the place where I could send my pro bono clients and know that they would be treated well no matter how much money they had in their bank accounts. I wanted to create a place where people could get financially fit; and in my mind, the place you would go to do it would be the Financial Gym. I left Merrill Lynch four years ago to build this and recently raise $1.8MM in venture backed financing to open our main Financial Gym in New York City and by next year we plan to have gyms across the country.
What’s the biggest experience or lesson gained on your journey so far?
I think the biggest lesson I’ve gained is the power of patience. When you are building something that you feel incredibly passionate about, you want it to become a reality as soon as possible; however, you can’t always control everything around your business and more often than not, it takes two to three times longer to get where you want to go with your business. When I left Merrill Lynch, I thought I would have gyms across the country years ago, but even though my business timeline was different then my personal timeline; I’m thankful for the journey to date and realize that I’m exactly where I’m supposed to be at this point.
How do you see Financial Gym changing the advising landscape?
My company is literally redefining the financial services industry. I say that it’s a misnomer that it’s even called the financial “services” industry because most companies only make money by selling you products, so it should really be called the financial “products” industry. For financial planning in particular, they want to sell you an investment product, which is why you usually have to have some amount of assets to get a human being to work with you. If you fall below a certain threshold, then most financial services companies want to give you a website or an app to help you with your finances. These tools are great for a DIY’er, but most people don’t understand the basics of personal finance so it’s near impossible to DIY their financial journey. We also know at The Financial Gym that money is personal and most people are walking around feeling fear and shame about their financial picture. If you’re feeling these emotions, they’re not going to be resolved with technology, most people want to deal with a human being and have a place to go to and this is what we provide at The Financial Gym.
Is there anything you wish you knew when you started? Anything you would do differently?
I wish that I knew I needed to reserve more money in advance to account for the time it would take to build my business. I also wish I was more creative as far as business expenses. I think I overpaid in areas like legal and design work in advance that didn’t really net me a good return on my investment.
What advice/credo do you live by as you grow the business? What is your professional and personal mission statement?
I tell my team that we need to grow our business not for our investors or our own bottom line but because the work we do is a huge need for the majority of the population. We are changing lives for the better every single day and we need to make sure that we can serve every person who needs us. Our mission statement at the gym is that we exist to change the lives of this generation and future generations for the better.
What’s it like to work with your team? What advice do you have for fellow entrepreneurs about building and leading teams?
I truly believe your vibe attracts your tribe and when you’re creating a company, you need to understand that your tone and leadership style will drive an entire organization. I am in general a positive person who believes there’s always an answer for every problem and I want to hire people who feel the same way. We are surrounded by people all day long and it’s important to have a positive work environment filled with people who understand teamwork. I’m the leader of the company, but I never feel above any of the work that has to happen in the gym. I take out the garbage, I wash dishes, I always make time for my team and I want the people around me to feel the same sense of teamwork no matter what role they play.
Where do you find inspiration when faced with challenges?
I am typically most inspired while working out on my Peloton bike or sometimes after a good cry in the shower, both are like a reset for my brain; and I find that when I drop the stress and anxiety around decisions, I gain clarity and can find solutions easier.
What does “success” look like for you? What do you think will help you achieve it?
I aready feel successful because we’re currently serving hundreds of Financial Gym clients and saving lives through the financial literacy we provide. To feel even more successful, though, I would like to have Financial Gyms across the country and eventually across the world. All it will take is some money; but I know that it’s out there and as long as we continue to execute on our plans as successfully as we have, we’ll raise it.
What is your proudest and darkest moment so far?
My darkest moment was on March 15, 2017 where I paid payroll for me and the other Financial Gym employee and then had to send my payroll money back to the Gym to cover expenses. I literally had no money between my personal account and the Gym’s account during that transfer. I cried myself to sleep last night not sure where the next dollar was going to come from. On March 17, I received $65,000 in investor money. My proudest moment was completing my first round of venture capital funding where I raised $1.8MM, apparently less than 1% of female entrepreneurs have raised over $1MM.
What lesson did 2017 have for you? What do you look forward to in 2018?
In 2017, I learned the importance of tenacity and self confidence through the venture raise process where you meet with dozens of venture capital investors who literally tell you your idea is a bad one because they don’t want to invest in it. Through that period of time, our growing group of clients continued to motivate and inspire me to keep pushing through with the raise. I look forward to raising my Series A round in 2018 so that we can expand The Financial Gym outside of New York.
Many entrepreneurs continue to perfect their daily routines to support their work and greater vision; would you mind sharing your morning routine or a regular ritual that grounds your work each day?
It sounds awful, but I start every morning looking at my phone. I want to make sure I’m always responsive to my team, my clients and other people related to the Financial Gym. If I am staying on top of my communications to start the day, I feel as though my day is off to a good start. Whenever possible, I also love starting my day with a workout on my Peloton bike. The exercise is not only good for my body, but some of my best business ideas have come during a workout.
Has being a female entrepreneur helped or discouraged you in your context? What do you think would help women entrepreneurs and leaders the most?
I know for a fact that being a female entrepreneur posed a greater challenge for me during the venture capital financing conversations; however, I think it has been beneficial for me as far an identifying a huge need for people and creating a unique solution. Male VCs may not have seen the ultimate value of what I provide, but 95% of our inbound call volume is female, so I know I’ve figured out a great solution for them. I think that women entrepreneurs and leaders need to help each other whenever possible. It was fellow women entrepreneurs who helped me define and create my pitch deck and connect me with investors. I loved the constructive feedback and I personally take every call or meeting I can with other women entrepreneurs to help them with their journeys as much as possible.