Money Magazine has ranked hundreds of careers and have decided that the job of Financial Advisor ranks third. That’s not too shabby. Here are the stats provided by the magazine.
The average salary is $122,500, which is a little less than three times what my base salary would have been this year had I not been taken the new job. Financial Advisors get strong marks in flxibility, creativity, two things important to me. Ease of entry ranks well, but the level of stress is not perfect.
My career choices are never complete. I started as a music teacher, ended up in arts-related non-profit, got a temp-to-perm job at a large financial corporation, taught some more, returned to accounting in that same corporation. At one point, I was considering law school, so much that I took the LSAT. I didn’t score as well as Reese Witherspoon in Legally Blonde, but I did score well. In the mean time, I’m finishing up a Master of Business Administration degree, mostly paid for by the corporation.
In effect, I’ve avoided making any real choices about my career path, mostly because I have so many interests. (Did I mention I do web development in my “spare” time? This fall I’ll likely be teaching music on weekends and some evenings, as well.) At times, I have considered becoming a Financial Advisor. I’m great with people and I am thirsty for knowledge. I’ve informally coached friends on their money management. I could probably enjoy doing that full time after training and certification.
I’m not going to make any decisions based on a survey from a magazine, but this career is something I’ve thought about occasionally over the past few years. There are 6,100 job openings each year according to Money Magazine, and that probably doesn’t include new private practice businesses.
Now, for all your Financial Advisors out there: What do you hate about your job? I need to hear all the negatives.
Updated April 17, 2006 and originally published April 12, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
Rank: Platinum
{ 87 comments… read them below or add one }
← Previous Comments
I’ve been selling long term care insurance for years and am licensed in CT, NY and MA I’m doing well but would like to work more with CFPs. Specifically, I’d like to be the backoffice for all their client’s LTC needs. This would include doing all the work from marketing, conducting semianrs under the CFP’s name, client meetings, administration and appeals. All done pursuant to a split commission arrangement. I’d appreciate any advice on approaches or strategies to becoming a CFP’s backoffice on long term care insurance.
Get the Facts. Can you bring in 30 to 50 million in Assets in 2 or 3 years? The firms care about production. If you are not 250 to 400,00 in production within 5 years you have wasted your career and the industry is pushing you out. I left a 6 figure job to become an Financial Advisor. Ever since this industry has gotten worse. Are you ready to cold call every day, go door to door knocking? They expect it yet the success rate of doing so is very poor. Oh by the way you could open accounts all day long and you will fail if it isnt enough money. I am talking big accounts. All the big firms are pushing to eliminate pay on accounts under 50k – proposed by Smith Banrey, already 75k or close at Morgan Stanley, Merril, who knows who else given the landscape over the last year. I left a 100k job have been in this business over 3 years worked 3 of 4 weekends per month for the first year or so. I busted my ass. My last pay check for 30 days was under $2000. I dress sharp, have succeeded in every job I have ever had and built a nest egg of over 400k before entering this business. I am 40. I was about making money, investments, providing education and taking care of clients. My work ethic was never in question. There is not one FA in my office under 8 years that is confident about there future, their business. If you are retired already and want to do it or if you are 2o something and aren’t making any money aNYWAY. Go for it. My honest opinion is this business is a piece of shit. That being said everything about investing, taking care of clients is great. Compliance is terrible. It is business hinderance. The firms, they want someone to bring in million dollar accounts and relationships. If you can’t do that regularly you will be basing a career on hope and hype. Trust me I am living it, I am a professional, hard working and educated. This career move has me in a position I can barely feed my family. If I didn’t already have the assets to live from I would be in foreclosure. MOst firms pay sALARY for one year, most banks 20k to low 30′s base. I wish someone would have been more blatenly open with me. In the time frame of my training there was over 125 people that went through training. Of that amount 25 are left. I know 12 of them. Three will likely survive. Two joined teams and the other was given assets/business (so were many others and they will still not survive). I could write a book on this. I am 4 years into a piece of shit career built on the hope and hype that was relayed to me. Average guy makes 160k year. It wasn’t until years later I found that was based on the average person being in the business for 15 years. If you can make it past 5 years you have a chance if your production numbers are over 400k. Do you know what it akes to get there? How much in assets? I know guys with well over 30 million in assets and they are not there. Get your facts, get the answers and ask questions before taking the leap. Lets say you charge 1 percent on fee based you get paid to grid 30 to 40 percent. So if everything goes perfect your client invests 100k and everything is under fee you raise $1000 for the firm. You get paid to grid 30, 35, maybe if your lucky 40%. That’s 300 – 400 per year for that. How many $100,000 accounts do you need to make 50 or 60k a year. Exactly. Think about it. How many millionaires can you make be part of your business? Even if you know some the process is the larger the money the longer it takes to get there business. Good luck. Do not be as Naive as I was. I felt it was what I wanted to do I was going to work hard and never look back. I jumped in hard with the premise this is what I was going to do no matter what. What the ___ was I thinking. Call around and ask a lot of guys that have been in the business 5 to 8 years what they are making – really. Have them show you there paycheck after the salary runs out. You will be surprised. Ask those under 5 years if they would recommend the job to their best friend. Are they comfindent about there career or future? I guess it is all relative if you wish to make 30, 40, 50 or 60k. At least for awhile until the firm doesn’ want you because your production is to low. Lowest quintile and at 5 years oh, your pay – that’s right your grid falls to like 20. What happens when they stop paying you a salary! Sorry, to be negative. People act like this is the best job ever. The only people I see making it are the ones that were handed business (money/assets) and a lot or plain got lucky or new many millionaires willing to give them money. Hard work doesn’t mean anything don’ let them full you. The industry is much different then it was even 5 years ago. I wish I could share more. Let’s see Wachovia, Merril, Smith Barney keep naming names. How many times did employees wonder who they were going to be working for? what there pay would be or if they were going to get cut. Don’t jeopardize your family on this career move without facts.
Smith Barney Advisor:
I can remember getting my B.S. in finance and later my MBA and interviewed with MSDW, SSB, the Pru and Axa. Everytime I was offered a job I didnt like the 1) instability of the economy (my B.S. was earned and 9/11 happened immediately after, consequently driving the stock market down..and upon getting my MBA we have hit a major recession) and 2) the attrition rates. I opted for the accounting side of business and have worked in it for close to 10 years. I found the stability of a paycheck a better bet than making the big bucks. I make around 50k now but I work in the educational finance field. I occasionally get offers from advisors..”well, hey you have degree in finance and an MBA, you would do great” To me that sounds more like they are recruiting someone with a heartbeat. I dont get paid a whole lot but great health benefits and stability give me more piece of mind. Now in my 40′s and single w/ no children I still will opt for the slow and steady (and smart) route to retirement rather than jump on a fast train to nowhere. Your writing has helped me understand what I need to understand at mid-life…I’m just not cut out for the sales oriented business..my gut has always told me this..so I stick with govt work, rely on years of service and highest pay grade to solidify my happy retirement. Thanks for the words
I read the statement after 5y ears Smith Barney advisors make $250,000. If you think that is true you are clueless. They may make $250,000 in production. That would be about 75k likely a little more. That is right. If you survive the first 5 years and your production is 250k or more your grid depending on the firm is 30-40%. You can call every branch in your state. 250k in income at 5 years what a hoot.. If you find that to be true ask to see he is pay check. Then, still you better understand how he got there and how that relates to you. That statement my friend is very naive and is without merrit. A lot of hype and hope. Another thing someone else said if you like investing and want to play the market it likely isn’t for you. That is not what the business is about. Stockbrokers are the minority. You can still do it but good luck trying to be succesful with your business. Not too mention every trade you do for yourself even after the 50% discount is still going to cost you $30 – $150 per trade. That is right you the broker your fee. My advice: Get the facts and don’t jeopardize your family.
The bigger firms have more to offer clients more fund choices, more private money mangers, separately managed accounts, more resources period, CDs from many banks, bond trading desks, insuraqnce, lending, you name it. It really is who is the client and what makes sense for them given what is out there period. An insurance guy who offers nothing but insurance solutions isn’t a financial advisor. At least not in my opinion. There are major differences in the top fims (UBS, Merril, Morgan Stanley, Smith Barney,) vs. mid tier and regionals Raymond James, Edward Jones, AG Edwards (now Wachovia I mean Wells Fargo. Merril, I mean Bank of America and Smith Banrey Soon to mean Morgan Stanley), the insurance carriers Lincoln, John Hancock, Prudential, Pacific Life, .., and the low end Ameriprise, lowest end primerica. The banks are equal to the regionals in offerings usually unless connected to the wirehouses. Last but not least you can work with Allstate, statefarm, etc. Primerica is about as low as you get. They convince the masses in that one. It is more important to sign someone else up then it is to selll anything or give advice. Educate yourself, be smart ask serious questions, don’t rush into it and know what it is you are selling besides yourself. Don’t jeopardize your family. I have said enough. Too many people in here talking circles about the idea. I wish I would have had more facts and committed to the idea of an exit strategy sooner. Good luck. If you know a lot of business owners and can bring in millions in assets this could be the easiest job you ever had. Ex. If you had 1 client worth 100 million and you charged 1%. At most firms you likely would get 50% grid – that’s money. The fact is the less clients you have that are really wealthy the easier it will be. If you can’t have $5 million in assets the first year and at least that every year after you should assess who you are going to work for and what you will be paid. 15 million you only make about 50k a year. The insurance guys make a lot more – closer to 90% grid. Then you get insurance and you offer insurance. Hi mr. client of our 5 insurance products you fit into plan B. I really should stop now. Sorry about the grammer, spelling, run ons etc. This was more a factual vent. Given this career I have jeopardized my family and now need to get paid. This game is over for me. Also, I think it is important to note I interviewed with American Express now Ameriprise, Wachovia, Edward Jones. I took a job at Legg Mason first based on the corporate culture which was very important to me. I went to Smith Barney through citigroup acquision. I have had conversations with many advisors from many firms and have discussed and work with many advisors at insurance companies. I actually got Life & Health certified back in the day looking into Primerica. Once they told me it was more important to sign people up then it was to work with clients I did some short research and realized that was nothing but multi level marketing. I hope my ramble helps someone. I am not checking back to follow up here and only hope that I am not hunted down by the eye in the sky for my honesty. Understand how you get paid and said time limts for your expectations and goals. Have an exit strategy. I can’t tell you how many great FA’s I listened to preach their pitch set up by the company because they were doing great – only to find them no longer in the business a year or two later. I will shut up now.
Smith Barney Advisor,
Thanks for your candid rant…I feel enlightened and appreciate your posts!
I recently retired from the Military (23 years) and was pursuing a second career as a FA. I have a B.S. in Computer Science & Mathematics and a MS in Computer Science. Neither degree is current nor do I have a passion to become a ‘code monkey’. For me programming and technology has always been a recreational interest. I always told myself my second career needed to be a passion regardless of income; hence, the idea of becoming an FA.
I don’t have formal training in finance but I’ve always been passionate about investing. With that said, I’m currently in the last phase of the being hired as a FA with Edward Jones. One of the steps prior to the final interview with Edward Jones was to knock on doors and conduct surveys. The exercise was very applicable and generally defined what would be expected. I spent 4 hours knocking on 110 doors that resulted in 15 ‘decline to interviews’ and 25 ‘full interviews’. Many people were not home or chose not to answer the door. I believe in the value of being a FA and I can sell the hell out of things I believe in. I can easily see my self doing this for 2 years or so to develop my client book eventually shifting more to an advisory roll vs a client building roll; however, the possibility of having the rug pulled out from under me after putting the insane effort into building a client book has me second guessing the FA path. My final interview is scheduled for Friday and I find myself browsing the web for nuggets of clarity. What to do what to do?
Options as I see it:
1. Become an FA. Obtain the series 7 license and CFP designation. Fulfill the 3 year contract obligation and then decide to remain a FA or take my new found experience and move on to another area within the finance industry…maybe become a Financial Analyst instead. 3 years wasted??? Depends on how you look at it. Fortunately, I’m collecting a retirement and my family won’t starve if I’m limited to making chump change.
2. Considering the crappy economy and the current unemployment rate, go back to school and earn my MBA. I’m considering an Executive MBA but don’t know the pros and cons of an EMBA. Bottom line: Those baby boomers WILL eventually retire and corporate America will need management types to move up the food chain. I used to manage Defense contracts for the government and I believe a fast track may be there for me, who knows.
Anyway, I just wanted to post a Thank You for the insight you provided.
2FAornot2FA,
I’m in the same boat as you. I recently retired from the Air Force after 25 years and have a passion to learn about the FA world and help families reach their goals. Let’s keep it real, I want to make money doing it. I have my MBA and have been researching all the wirehouses and even EJ and Waddell and Reed. Both have given me job offers by the way (EJ and WR) but I’m so skeptical about what road to take. I also applied to MSSB and Ameriprise because I want to get all the facts on each one before and if I decide to proceed. I really want to do this but again, decisions decisions. WR doesnt pay while your in training or pay for your licenses but they do reimburse you once you obtain them all and you get activated. I like WR because they’re smaller and seem to be more focused on their clients rather than selling products, but its hard to say without actually being part of the firm. I really am not sure what ship to jump on and what I think would be best for me. I want to really learn the business and be part of a “team” that cares about me and my success. What did you decide to do after all? Interested to know……And if you have any advice for me please let me know!!!
Shonna Simons,
I decided to go the MBA path and just finished it last week. The sad thing is I’m in the same exact position that I was in 2 years ago when I wrote the above post – deciding whether to become an FA. Fortunately for us, we have military pensions to fall back on. I couldn’t imagine taking this path without an income safety net – especially if you have family to support.
The funny thing is I found this thread again while searching for FA information and didn’t realize I was reading my post from 2+ years ago. This discussion board has become very lively since I was last here:) I like straight shooters and appreciate the insight provided in the comments. Thanks all.
Hello,
I am a recent business commerce graduate and interested in becoming an Financial Advisor and starting my own business. I read a blog here recently referring to advisors transitioning a Financial Advisor Business to a successor. Discussing also the growing population of investors becoming underserved by advisors due to financial advisors retiring at the same time baby boomers are requiring retirement planning services. I’ve not yet found a Mentorship program or advisor in my area looking for a junior advisor to step in as a successor, but all of the research I’ve done seems to come back to The Advisor Business Exchange site looks like a great way to get your foot in the door! I’m hoping this year with depreciated portfolio values and also baby boomers retiring, the timing will be right for me to start a career as a financial planner.
Any advice would be greatly appreciated if there are other approaches I should consider.
thx, Charles
Hello,
I have found these posts useful, especially those from experienced advisors. I have been managing
my porfolios for 15 years, with detailed tracking of 8 personal portfolios vs. various indexes, and
enter the value of each converted to a NAV on a friday closing basis, so I can track all this over time
on an excel sheet, during various market cycles and market events.
I exited the marke largely in 2007/2008, and have largely re-invested (70%) mostly in March/April,
anticipating a bottom to the bear market. I follow market cycles and look at a lot of historical data
and trends. I have perhaps 10-15 friends and aquaintences that have asked me to manage their
accounts, and I’ve looked at starting an RIA business. But I would prefer to work with an established
RIA for the mentoring, and so I would not have to re-invent the wheel. I basically would charge a %
of assets under management (1%+), but primarily educate and guide clients on all their financlal
and related matters, as I have a natural nack for this, and meet people all the time who need help.
I almost took a position with AG Edwards (which I thought was one of the better Brokerage firms), but
they were very inclined to push high fee accounts, and didn’t seem to care about market cycles or
protecting the clients portfolio. I also talked with 2 private money managers, and would like to work
with a money manager as a support person, and also to grow an expanding client base on a
platform of asset allocation which makes sense and takes advantage of market cycles and trends.
If there is any advisor in the NJ area who might need some help or is willing to help with information;
I really would like to help the growth of a business, while I grow my own business and assets.
Thanks, FIV
you exited the market in 2007 and re-entered in march (presumably ’09) “anticipating a bottom to the bear market” Bull_____!! You probably also bought a home in 1997 and sold in in 2006, bought dot com stocks in 1995 and sold in march of 2000.
I am interviewing with ML for their Practice Management Development Financial Advisor in NY and I wondered if anyone has experience with the interviews and more importantly what the basic salary is – I have $100k in loans to pay to for my MBA so not really looking to be destitute for the first year.
I just left ML after two years in the PMD program. There numbers are insane. The first year is doable but the second year is stupid. The program is designed for you to bring in your low hanging fruit fail and leave. Leaving your assets behind. Unless your a legacy or are teamed up it’s designed for you to fail. Good place to get licensed, experienced etc. But don’t expect to be there for more than two years.
Good luck.
I am interviewing with ML for their Practice Management Development Financial Advisor in NY and I wondered if anyone has experience with the interviews and more importantly what the basic salary is – I have $100k in loans to pay to for my MBA so not really looking to be destitute for the first year.
http://www.gentlerainaffluentmarketing.com/
Being a financial advisor, I can tell you that there are great opportunities for those who have the personality for it. Choose your own hours, unlimited salary potential, and helping people are a few of the priviledges this career holds.
The price, as some of you are wondering about, is starting your book of business (clients). You usually start from $0 and are expected to build a book of business from nothing – which means 80 hours/week your first 2-5 years spent mostly prospecting (getting people to invest with you). This is where 95% of people fail.
As for wanting to “help” people, and educate them, that is another luxury you are given AFTER you build a sustainable book of business. Until then, it’s your survival and food on your table. I came into the business with the attitude of helping people with their finances the way a doctor helps people with their health. You ARE a salesman, you will be taught SALES techniques, and you will be required to SELL stocks, bonds, mutual funds, insurance, whatever – even if they sometimes do not need it. Many firms terminate you if you do not meet ongoing expectations (accounts open, assets under management, gross revenue generated).
As for the person who commented that ANYONE can call themselves a financial advisor and charge for financial advice, you are mistaken in an illegal way. Unless you are Series 7 and Series 66 licensed through FINRA, charging for financial advise (or even calling yourself a financial adviser) can be punishable with fines and jail time – especially if you’re advertising financial services to the public. Not even a CPA can charge for investment advice unless it is somehow related to taxes or they have their FINRA licenses.
All the hype about the benefits of this profession are true…if you’re among the 5% to succeed in making this your full time career. Good luck to you all!
Smith Barney guy you are hilarious!
I am a independent financial advisor, have been now for just under 5 years. I drank the kool aid twice in my short stent of a career. Started with Edward Jones cause they won all these awards for customer service AND i REALLY WANTED TO HELP PEOPLE. In my first months of selling I cold called across the country selling financial bank stocks cause according to my trainer, “they would not ever hurt my client” What a crock. After wearing out countless pairs of shoes door knocking and going to meeting after meeting listening to these other advisors chant like queers about how great it is to be an advisor, only because they are trying to receive LP cause its the only way to make any money at Jones, I had it. I started there and got “a book” and office to work with. The advisor switched offices and the company promised me 10 mil to start with but I had to relloacte. Being I was only 23, I thought WOW $10 mil OK!! I opened my doors for the first time and was left with under $2 mil after leaving my home and rellocating, NICE! I turned that office into 15 mil in under 3 years. Should have been rolling in cash right? After Jones’ cut, and taxes as bonuses (thats right, jones guys look at their compensation structure and how its taxed) I made under 40k every year. So here I am independent. My second bill of goods. An advisor I ran into liked me very much said son why dont you come work for me, and take over my practice. Holy shit just the break I’ve been waiting for. I might as well be mopping the stalls at a holiday inn! Get ready to cold call people your advisor hasnt spkoen too in over 20 years. Also, my particular case, all my boss sells is FIA’s (for those of you who dont know what equity indexed annuities are, they are the used cars of the industry). So in a nutshell, after self employment expenses here I am making under 40 k while beating the advisor average for bringing in new assets. I had to expand on what the smithbarney guy had to say because he is the only one on here saying it how it is. I am sitting in on the CFP in Jan, and soon after pursuing the CFA. I’m done selling shit to people who dont want to buy. Im sick of compromising my own morals to make sure I can pay my rent this month. I’m going into the analysts side of things. For all you salesmen out there I give you kudos, if you can sell cars you can do this job. For those of you who want to help people, become a SOCIAL WORKER!
I am an FA and will agree it’s not all smiles and $$ signs but if it were everyone would do it! Disgruntled Smith Barney guy…you can rant and rave till you’re blue in the face and make copious amounts of excuses but at the end of the day, you couldn’t cut it. I will agree it’s not like it was 15-20 years ago but the statistics are plain as day and although someone may have blown smoke up your A$$, you can see the attrition rate. Everyone out there thinking about doing this…do it smart. Do your homework and try to get on with a firm or bank where someone can mentor you and you can bring them in as veterans on the big time appointments. Better yet, try to work your way in where you know someone trustworthy. Unlike SB, stay positive and keep your activities up and if you have to wait tables a few nights a week to make ends meet do it. If you make it you can live like few do. Good Luck!
to the whistleblowers
Is it really that bad? What hopes does a newbee have with little experience and peers who are financially challenged. Sounds like its better to work for $30k, being frugile and try selling at flee markets occassionally rather then to give up years of wasted weekends and watch a suffering family.
Every websites are advertising stocks, trading platforms, etc. Who cares!?. I have a little money, but not enough to risk it on a some guy who is trying to increase his portfolio and not enough to play with trading.
What am I to do? Getting older, 34 now, but still wasting time. I don’t have enough money to live from the interest, and not enough to risk it either. College is expensive, how much more time to invest in school, lose quality with family and yet wonder if I’ll ever make at bare min 6figures.
Would like to get a law degree, CFP/similar. Truth be is it even worth it to look towards being a FA? What other industries pay without headaches and risking a heart attack?
Even though this blog has a lot of negative comments, I still have hope. Where are the comments from those who are truely successful?
35 years old. Happily Married, 2 Children. Make 150k a year (our budget is based on 100k per year) in a career that is not “fulfilling.” I have zero debt, and ultimate freedom to be at all of my children’s events. I rode a 4year high in the subprime market and made a bundle, but lost job 2.5 yrs ago, and went into more stable career field (Medical Sales). I’m not a science guy, but was fortunate in socking most of $$$ away during the subprime “run”, thus feel no financial stress. Only mistake was buying too much house, but paid cash for it. Have lost 100k in equity, but still in a good spot with total assets of 400k (sans free/clear home). I dont want to wait 5years to have autonomy, so give me best case of how long will it take for me to get to 100-120k as an FA with freedom to come/go as I please. Thank you.
I have seriously thought about becoming a FA, done a lot of research, including reading all of the comments from this blog. A lot of great comments here. The biggest problem I have with being a FA is the fact that while dressed professionally with a lot of letters behind your name, even if you have been on CNBC or playing tennis with Dave Ramsey, etc… there are no “experts” in the financial industry. Everyone gets it wrong from time to time and their customers lose real money. In order to make it as a FA, we need to know millionaires who are willing to put their nest egg in our river – again, a river that nobody controls. I fully agree that many people want to help others but the first few years is about your own survival – and nothing else. It comes down to convincing millionaires to put their money in your hands or you fail. Good luck. By the way, becoming a professional singer or actor might have similar success rates. Are you going to Hollywood??? Or just dreaming???
Wow, this shed a light on a career i was interested in. As a finance major, I’m going to probably try to go the road of the financial analyst.
Far more stable .
For the Morgan Stanley guy, maybe you should leave the industry or find another firm which has not been portrayed so badly in the media. Second I work for a small regional firm that does not have national NAME REG, and within 3 years I have built a book of business of over 300 clients and 50 Mill in assets. I made 106,000 this year. Not bad for a 30 year old who built his entire book of business from cold calling and hard work. Tell me how many business you can start with no start up capital and within 3 years have a positive cash flow of over 100M a yr? Even if your making 50M or 75M it still a good income in todays economic environment. My business has grown every year. This business is not for the weak minded or pessimistic person, you have to have a business plan, set goals and have to LIVE AND KNOW YOUR BUSINESS, if not a career change is your next option.
Wirehouse, you REALLY built 50 million in investible assets from cold calling? How did you do it? Who did you call and what did you say? How many appts before client moved assets? What was your lead in?
Anyway, you are definately honest on the numbers. For those looking at this career, understand that you are basically working for 30 basis pts. The revenue generated from assets under management is 50-75 basis pts. Of that the firm takes 60%. So like wirehouse states, 50 million generates 100-150 and 100 million generates 250-300k. To me that is insane! To manage 100 million in assets and only make 250-300k is a joke and a scam. You know how much stress it takes to not only build but manage 100 million in assets?? Are you really worth only 30 basis pts. If you are looking to make 150-300 a year, do mortgage loans where you make 75-125 basis pts net off each transaction.
The positive to the FA side is that you are annuitizing your revenue stream whereas loans are purely transaction. Although you can annuitize with consistent referral partners so to speak.
I’ve been an FA for around 30 years, and have seen many changes over that time. I got my MBA & CFP as well as the first part of the CFA. I take a consultative approach and do try to be a resource for my clients. Treat them right and they will treat you right. I’ve gone through many iterations, including starting the financial planning department for a regional broker/dealer. I can attest to the fact that there are very few FAs who are under the age of 40. It is nearly impossible to start in the business. A regional broker is probably easier to start at. The wire houses really just want you to open accounts that they will eventually distribute to the seasoned pros once you’re let go. I’ve found professional nirvana by eventually opening an independent office under the umbrella of a major. I run my own show and take home around $200k before taxes. In my best years I was grossing around $750,000 before a 40% payout. I started by being placed in front of a phone with a phone book in front of me and was told to have fun and make a living. Very scary! You need a good support group of other brokers in the same boat to urge you on past the failures. These relationships are very important and will endure long after your initial missteps. As to whether I would recommend this business to a newbie, probably not. I enjoy what I do and love the freedom. However, it is a very difficult business to break into. If you can get past the initial obstacles, then it is a great business. But, getting that first $50mm in the door is a bear. Good luck!
Old Veteran,
What firm do you have your umbrella under? If you dont mind me asking……
Hi Shonna, My umbrella is with Wells Fargo Advisors Financial Network. A really great firm, but it has a fairly high trailing 12 requirement with a clean compliance history. Good Luck!
Can you give me some advice….I’m just starting out and have been offered jobs with Waddell and Reed, Ameriprise, EJ and MSSB….Any words of wisdom on where to go for a Newbie? Especially for a long term. I want to be part of a well known, honest money making team……Thanks in advance!
You really have to take a look at the individual training programs. It is important to meet with your future training manager to get a feel for how they relate to the trainees. The manager should also be someone who has actually sold in the past. I’ve seen programs that were managed by individuals who got most of their experience from books. You need someone who can bring real life examples to your training. In addition they should be willing to really work with you on a one to one basis. I did training for about two years as part of my management duties. I saw first hand how sitting with a trainee, while they were talking to prospects, could enhance their sales ability. Make no mistake about it, the job of an FA is consultative sales. It’s great to know all there is about the markets, but success comes down to your ability to relate to clients and lead them to the right decisions for them.
I just got offered to joing Northshore Financial Group to be a financial representative. I’ve been a Personal Banker at Chase for a year and a general sales career spanning 12 years. What do you guys know about Northshore Financial Group (member of Metlife). Any opinions or facts would be greatly appreciate it.
I have the BEST story to tell. I have been series 7 licensed since 1982. I have a law degree. I spent almost 17 years at Smith Barney,now Morgan Stanley.SB.
In the halcyon days,96-2000;I made as much as 350k. In my most arrogant of decisions,I decided in 2007,to “take the money” and leave SB for UBS. I left with a personal friend and partner of 11 years and another “partner”.
Within one year,I had been falsely accused of lying on my U-4;I say falsely,because I JUST found out that UBS was wrong about the accusation,yes 4 years later. I owe 250k,which I can’t pay back and will file for chapter 7 soon. Arbitration is scheduled for late 1/12 BUT my attorney has raped me for 20k and I won’t pay him a dime more. 95% of these promissory note cases are lost,even though I personally think my arguments are winning ones. I also am on SS disability and am 58 years old.
The experience was overall a good one and though the business has changed,do not call lists,the market and economy……..it’s still a great opportunity for anyone who is willing to work. YES,it is a sales job BUT if one puts the time in…..whether it’s Primerica or MSSB…I believe one can succeed!
Best of luck and god bless………….
I just left Merrill for MSSB. My career began at a bucket shop in New York. Then I moved over to ML. I got better trained etc. gathered some clients. Not nearly enough. I think I will stay at MSSB until they spit me out. If it doesn’t work here i’m moving independent. Working at it part time while I build. I had 4 mil at Merrill. Currently working on moving the assets and I seriously think I will bring over 2 mil. The client you think will come don’t and the clients you think won’t do. Crazy gig. There are a few things that are consistent in success in this business. You need time which most firm that pay you a salary won’t give you. You need tenacity and you need luck which with tenacity you get the luck. Just some ideas. Will never quit this job. May put it on the back burner while I build to a sustainable level.
“Why not just steal the leads and start your own book in a different biz structure.”
Because that is a crime and if caught you have to disclose on your U4. Do you think anybody will hire you after that? Including clients all they have to do is a brokercheck free just go to FINRA.COM and your done. That’s why. And you want to handle money LOL. Get a backbone and morals.
To make it in this business you need to realize, you’re not an advisor, and certainly not a portfolio manager. You’re not even a product pusher anymore unless you’re an insurance guy. First off, any average (even much less than average) portfolio manager would chew up an spit out 99% of advisors (but advisors “manage the manager” haha, they pic which manager will do well, puhleeze). trust/estate/budgeting/planning work excluded, you will find value there (the latter two of which are free online and the former two is to a large extent legal). But as far as performance goes, advisors offer so little outside of behavior modification/saving it’s mind numbing. It really is.
Anyway, The more you know in the beginning, the worse off you’ll fair. Here’s where it’s at. You’re nothing more than a glorified shoe/car salesman. After this business I have more respect for car saleman becuase all they sell is a car, advisors sell and cost people a whole lot more. try doing time value of money of the cost differential of a car vs the life of an investor savings. That’s what most brokers/advisors will cost you. you’re talking hundreds of thousands of dollars!!!
As a financial advisor/salesman you don’t manage assets, you gather them, the more you actually “manage” the worse off you’ll fair, the more you gather, the better off you and your family will fair. You’re job is to gather assets and if you’re lucky deliver market returns less cost. If you’re unlucky (most advisors), sub market returns at cost, and if you’re exceptional, modestly above average returns, which fall below market return after costs for your client. After 5-10 plus years, if you’re successful, you’ve sold enough of your clients down river (don’t worry most are too dumb to know it, and if you’re a good salesman, definately too dumb) that you may be able to add value, market insight, hedgefunds (if at a wirehouse), etc. If you’re in the wirehouse, you need big accounts, 250k+ or they don’t pay you on them.
Personally, I know portfolio management, risk, statistics, quant, econ, and trading. I know many times more than most advisors, but it doesnt matter. They get enough chumps, and put you in below average return/average high cost mutual funds, so what. they still get paid. They are salesman. That’s it! I’m not saying dont’ use an advisor by the way. Just use them like they use you. And they do. Go take their portfolio and buy etfs and rebalance it annually. done, you just made youself almost 2% return every year over what you’d have with them every year. take what they tell you to save and double it if possible. be more aggressive than less. just get the allocation right. stocks, bonds, international, real estate, etc. Find it online. financial salesman guess like everyone else but get paid for guessing. ok they offer some tax and planning stuff. nothing a good accountant won’t give you, and a free planner doens’t already offer online.
If you’re smart and unethical, and a great salesman, you’ll do wonderfully. If you’re dumb and honest, and a great salesperson you’ll do wonderfully, and sadly, if you’re dumb and unethical, and a great salesman you’ll do more than wonderfully. If you’re smart and ethical and a poor saleman, “fuck you, coffee is for closers” – go rent glengarry glenross to hear know what this line means.
good luck all. they say you pay advisors to lose sleep over your investments. guess what, you pay them, and they don’t lose sleep because most don’t give a shit. they sleep soundly knowing you pay them handsomely and they firms ensure that. go find a good, independent, planning based, core etf advisor. the rest can suck it.
you can’t start a hedge fund, c’mon. here’s the deal. you go into financials sales, etf based models, wrap them, it’s low cost and tax efficient (client friendly), more return is more risk, transparent, then run correlation analysis, sordex ratios, give them sound budgeting (dave ramsey style), it’s scalable for the FA, he can make money, and ethical for the client, transparent, it’s doable, reproduceable. you can sell that all day long and sleep all night with a clear conscience. go independent, if you can make the wirehouse goals you can kill it in the independent space. best of luck people.
Thanks for your advice. It seems to me, one is better off starting on your own or structuring a small hedge fund so that you not only make a percentage of holdings but also a percentage of profit.
I almost went to a ML recruitment event. Pffft on that. Why not just steal the leads and start your own book in a different biz structure.
read my comment above. you should have gone to the ML event. they’ll pay to train you. actually they’ll pay you to bring in all your friends and family money if you want to continue to recieve your paycheck, then they’ll fire you becuase you didn’t hit crazy production numbers, and try to keep your friends and family’s money.
It is what it is. recognize that and move on. don’t get jaded. make it work for you. that said, upon joining, you start planning your exit strategy. You’ll need a job in 18 months, another wirehouse (same shit), regional, or indepdendent. I’d recommend the latter particuarly if your folks can finance you for a year or so.
Btw, If you didn’t have the wherewithall to go to the ML event this business is not for you. that’s all it is. it’s all hopes, 99% of which fall through, but the 1% can make you tons of money.
Here’s the deal. Got a buddy, an advisor, started in 1996. He doesn’t know beta from crappa. sells like a used shoe saleman. within 90 seconds of your meeting either you’re giving him your money, or your meeting is concluded. he’s at merrill lynch. makes 400k a year. he couldn’t build a risk adjusted portfolio if his life depended on it, probably couldn’t spell it either, and doesn’t give a shit. you’re a number. you’re a utility payment for him and his family. you’re a vacation for them. he does have a nice house though. these are truths. if this is your nature, get in in the business, if not, and are social, get in it too and fix it. lots of opportunity there too. Just being honest.
← Previous Comments