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Be A Financial Advisor

This article was written by in Career and Work, Financial Advice and Advisers. 91 comments.


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 June 17, 2014 and originally published April 12, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 91 comments… read them below or add one }

avatar Easy E

You sound a lot like me. I haven’ttaken the LSAT but I have considered law. I am planing on taking the GMAT though and am in the process of finding a new employer that will pay my way through business school.

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avatar Steve Mertz

Hey Flexo, here are some of the negatives of being a financial advisor, especially if you are with a firm like Merrill vs an independent. They want you to gather money and put in with money managers. They don’t really want you picking stocks etc…to much liability.Tremendous pressure to produce-make big numbers or else. I retired because they wanted every speech I gave to be approved by the compliance dept.You can make a very good living but there are trade offs! Good Luck

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avatar MoneyDummy

Well, I was excited to read this article until I saw that they ranked “college professor” as the second best job.

That shot their credibility all to heck.

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avatar Nick

Hahaha… they ranked Software Engineer as #1. It feels more like #1 million to me today. Ah well.

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avatar Luke Landes ♦127,500 (Platinum)

The college professors I know are all extremely satisfied with their jobs. Sometimes it takes a certain kind of person, though.

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avatar Dus10

Wow! Another new design, Flexo? I liked the last one. This one is fine… but that one had a certain character to it that was nice.

Anyhow, I feel about the same way about everything I have been doing for my career. Throughout my entire childhood (well, since I was eight and cared) I wanted to be an architect. I took drafting classed, loved to learn about carpentry, took shop classes, and I designed houses in my free time. When I was 14 I taught myself HTML, and somehow landed a job straight out of high school doing light support and web development. That somehow migrated to network administration, and I have been doing that since. I am an MCSE, and I am about to graduate from business school majoring in Information Systems. I thought about minoring in Music and maybe getting a MA in Music. However, for a couple years, my plan has been to do an MBA or MBA/JD. I am thinking I will do them seperately, though. Indiana University has an online MBA program that you meet one week per year (all two years…) onsite. It is very expensive… ~$800/credit hour… but I can probably get my employer to cover most of it. They are a top 25 MBA school, which matters to some of the big boys… but not so much to others. However, I do not really even want to work for anyone, so I don’t know why I care. I will probably do the JD at IU as well, as they rank highly, and it is in town at the Indianapolis campus. I always wanted to go to Notre Dame, for architecture, but it is almost in Michigan, and it is very expensive. My best shot would be the MBA, as they have an Executive MBA program that meets three days a month, but you need a few years of managerial experience already… and the extent of my managerial experience includes a year at Burger King, and a year at MSN in the tech support department. I highly doubt that would work for me. So, it looks like it is IU for me.

As far as MoneyDummy said, those other results have me questioning the credibility of the article as well. If you have a PhD or something, they make good money and get plenty of time to research things they enjoy… but beyond that, you would have to be a very liberal person to enjoy the internal politics of a university… and I am pretty much the anti-thesis of that.

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avatar Cathy

Hey Flexo,

I was looking at taking a course or two just for fun and discovered that UCLA offers CFP certification classes online – finish the program and you’re eligible for the exam. Just thought you might be interested. Good luck with the new job!

Cathy

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avatar Financial Fruition

There are some major differences between a Financial Advisor who pushes product, a Financial Advisor who practices financial planning, and a Financial Planner (I could keep going with these descriptions). The Money Magazine highlight comes up short on describing what exactly they are defining as a Financial Advisor and how that supports the #s they are giving.

What exactly are you looking at doing as a financial advisor/financial planner, Mr. Flexo?

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avatar George

I’ve also been interested in going into financial advising/planning. The one worry I’ve had about going into the field of financial advising is all the conflict of interest problems in that industry. I think if I ever do decide to go into financial planning, I’ll have to do it under my own terms by starting my own business. Maybe it will be my second career.

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avatar J.D. @ Get Rich Slowly

I read this article, too, and my first reaction was also “Hey! Maybe I could be a financial advisor.” I went so far as to discuss the possibility with my wife (who made supportive noises). I love dealing with people. I’m interested in the topic. I’m smart. But: I have no background in this (other than personal education), and I have a hunch that my idea of what a financial advisor is and does is completely different than reality.

If I were a financial advisor, I’d want to teach people to pay off their debts, help them learn to save, instill good money habits. Learning to invest is certainly a piece of this, but it’s not the only piece, and I suspect that’s the primary focus of financial advisors. What’s more, I’m willing to bet that financial advisors are required to shill for the comanies that employ them, and that would kill me. I don’t want to be a salesman. I want to teach people good financial skills. Goading them into buying my investments is just shifting bad habits to my favor (or the favor of my company).

Still, I’m going to take a deeper look into this…

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avatar Luke Landes ♦127,500 (Platinum)

To answer Financial Fruition’s question, and to address some of the issues here, I’d be more interested in working the way a psychologist works, guiding people along a path to financial freedom, explaining the options and teaching how to make decisions, and not pushing any particular product. That means no commissions, but that would be fine.

It would mean working for myself (though possibly not at first) to make sure I’m not tied to any specific company’s products.

My thoughts are along the lines of J.D.’s above.

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avatar mapgirl

Flexo, if you are interested in how people think about money and addressing the underlying mental issues that cause a financial decison making dysfucntion, think about becoming an LCSW too. I have thought about getting an LCSW and CFP combination since being a CFP is a lot about counseling people to make better financial decisions.

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avatar Financial Fruition

Flexo, I would seriously look at Fee Only Financial Planning firms, where you could get your feet wet. This seems to be the type of Financial Advising you are talking about. Your compensation is based on an hourly rate, net assets, etc. It is not tied to any financial product you recommend.

A good source for reading up on financial planning is at the boards of financial-planning.com (http://www.financial-planning.com/phorum/index.php)

Good luck!

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avatar lamoneyguy

Flexo, a couple of points. First the average “salary” that they mention is not a base salary, it is the average earnings of financial advisers. I have worked in this industry for nearly ten years for a few firms, and no one who works in client advisory makes this as a base. If you are a financial analyst for a mutual fund or hedge fund, perhaps. But even then your pay is tied to assets and performance.

I agree that working for a fee only planning firm is the way to go. If you are sales averse, however, this is not the profession for you. Before you can advise a client, they must trust you enough to agree to pay you in some form. That is sales. There are so many people in this industry telling people that they are financial advisers, when in fact they may be insurance salespeople, stock brokers or mutual fund or annuity salespeople that the masses do not know what to think or whom to trust. You can tell them, “but I’m a fee only planner, I’m the one you can trust.” But the other guys are saying other things and convincing the people to trust them.

The income potential is high, the flexibility is nice, but yes, it is stressful. Clients expect performance and top service. If you don’t deliver, there are a thousand waiting in the wings. Clients can be fickle. One client expects you to outperform the market, the other expects you to outperform his brother who got lucky dumping a bunch of money in a gold fund a year ago.

If you are serious about it, go for the CFP. See my post on how to become a CFP. You can start the process by taking the classes. Even if you complete the classes and pass the comprehensive exam, you cannot call yourself CFP until you have two years of advising clients.

Good luck, let me know if you want any further advice. If you have any specific questions, you can email me at lamoneyguy (at) gmail.com

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avatar Gary

You might periodically review the types of questions that financial advisors answer over at mechanicsofmoney.com, to see if you might be interested in doing this kind of work on a day to day basis. Personally, I love the job and I think Money may have messed up (being a financial planner should have ranked number one…).

Gary

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avatar Jim B

Having been an advisor and having attained the credential of portfolio manager over the last 8 yrs at two of the top wirehouses, I can say with conviction that you are only as good as your conviction and ethics. I swore that I would quit the day that I was told I had to push anything. I only use independent research firms and my own due diligence to make investment decisions for myself and my clients. For all the bad press that is out there regarding “full service” brokers, there are about 25% of us that make a good living while improving the lives of our clients and their families. Like so many things in this crazy world, if you are honest, hard working and ALWAYS put your client’s interest first; you can make a great living and really help those that are not able to manage their own money. Just my 2 cents.
Good luck
Jim

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avatar thc

I am a CFP(R) and started my career (and worked for 11 years) with two of the largest brokerage firms. If you have high ethical standards (most of the people I worked with did) there should be no conflicts–just do what’s right.

My career has evolved and now I run the financial planning offering for a fee-based wealth management firm. We are currently only offering planning for our investment management clients and charge between $2500 and $5000 for a plan, depending on its complexity. I love what I do, it’s challenging and rewarding.

Anyone considering becoming certified as a financial planner should keep in mind that one of the requirements is 3 years experience in the business. The curriculum and exam preparation can also be quite expensive. Find an employer who will help pay some of the costs.

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avatar The Unknown Professor

I’ve been a financial advisor, and am now a college professor (never did software design, though).

The biggest downside to being a successful advisor is then first few years – your services are seldom “bought” initially – they’re usually sold. SO, the first few years involves essentially selling yourself. If you don’t have a salesman’s (or wonman’s) personality and a REALLY thick skin, it’s not an easy thing. However, once the business is built, it’s pretty good.

As for being a “perfessor”, I’d disagree that it’s that high on the list – it should be HIGHER. It’s different for different fields, but I think being a finance professor is at the top of the heap (other may differ, but they can make their own comment). There are lots of jobs and you spend your days asksing (and answering) interesting questions (at least if you;re at a research school). You get to teahch people about something you find really interesting. And best of all, they pay you extremely well (at better schools the starting pay is around $105-120K+ a year.

The downside is that you need a Ph.D., which almost always involves minimum of three years (and more likely 4-5) of post-MBA work, a lot of extremely difficult coursework (math out the yazoo), and writing a dissertation. But if you make it through those hoops, I think it’s about the most fun you can have with your clothes on.

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avatar Tim MMF

It took me a while to zoom in on Political Science as my major. I have a variety of interests as well. I’m going to grad school, gotta max the GRE, but I’ve considered double majoring in Business Administration or picking up an MBA. They’re so useful.

Eh, who knows. A career as a financial advisor could be rewarding. And you’d have great insight to write personal finance articles!!!!

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avatar Brian Schoppe

Flexo, I am in the same boat as you. I have been a software quality assurance analyst for just short of nine years now. I have had a few different employeers. However, I have never found much enjoyment in this profession. Especially now that good jobs are harder to find and salaries are going down.

It became so depressing to me, that I found a psychologist that deals with people who have career issuse. After speaking with me and having me take some interest inventory, she seemed to think I should look into becoming a Financial advisor. Even before the Money magazine article. Now I am facing the issue of finding more info about how to get into this field.

Also, I am thinking about going back for my MBA. It was useful when I was a consultant, but not much as a ‘desk junkie QA’.

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avatar derek

Downside to being a financial advisor?

The emotional and financial rollercoaster that comes with any sales job.

You’ve got to sell stuff (mainly yourself) but you’ve got to sell a product and/or a service…otherwise, you can kiss that six figure income goodbye.

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avatar Russell Bailyn

Hey Flexo,

Lamoneyguy makes some good points in his comment. When you decide to be a financial advisor, you have to consider how you want to specialize. You mentioned that the “psychologist” aspect of advising appeals to you. You’d be surprised how few advisors are good at reading through the lines and understanding their clients. Many advisors have a financial way of thinking and aren’t all that good with people skills. The problem generally comes up onnce you manage enough money to make a living- and you find yourself less interested in meeting with clients and more focused on gathering assets. Working for an independent firm is, in my opinion, a good idea, and becoming a CFP never hurts. I wouldn’t say to work on a “fee-only” basis b/c sometimes, believe it or not, clients prefer to pay on a commission scale. You might as well give yourself the choice to do both. Regards.

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avatar Mich

Some of the big firms such as Merrill, UBS, and Morgan Stanley seem to be constantly looking for financial advisor trainees. They usually offer a base salary and comprehensive training. Does anyone know anything about these positions (positives and negatives)?
Thanks,
Mich

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avatar ASoftwareEngineer

Well, if I am looking at the same article, I guess I am in the #1 career listed. I earn in excess of the ‘average’ listed and I suppose that should be ‘good’ but money isn’t everything. After 12 years of software development, I am sick of it. Like Flexo, I have considered financial consulting and stumbled across this site. The real problem is how to walk away from a job making decent living to start over in a career when you have a family. The course work in a certificate level program takes 18 to 24 months. You then still have to pass the CFP exam and gain 3 years experience. I guess it all depends on how bad you want to do something but that is a lot to go through.

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avatar McClane

Words from an old man – When I was younger [18], an older man told me to always pay myself first. I followed his advice and today I live very well. It makes me very sad today when I talk to my older friend who did not follow his own advice. He still lives from check to check. So pay yourself first, invest, and if you lose a little, it’s OK. Just keep going. After 10 or 20 years, it will add up.

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avatar Tara

I go to the Financial Advisor Symposium every year in Las Vegas and I find it to be a big help!!

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avatar unlikely MBA

Hi — lIke many of you, I am considering becoming a financial advisor. I have a super extroverted personality, love talking and being with people and am high energy. Also, I just completed a MBA.

I too am suspect since it seems all the big companies are offering these training programs — I have to wonder,” What’s the catch?”

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avatar Chad

There are some very interesting points made in the previous comments. Although I’ve been told on many occasions I should be a car salesman, I too am not interested in pushing stocks and funds (outside interests) on anyone. My interest lies in teaching/guiding people how to manage their income, assets, etc so that they can establish very little debt and achieve independent economic success (large net worth).

Can anyone tell me if having a degree is required in addition to the CFP?

I do not have a college degree. However, I served seven years active duty Army from 94-01 and have a very likable personality and strong work ethic. Since leaving the Army in 01, I have achieved the six figure income I dreamed of while not enjoying the job (computer work) and living in Northern Virginia.

I’ve recently given up the six figure income and relocated to Oklahoma City for a better quality of life. People here just seem to be more real.

I enjoy crunching numbers and analyzing different strategies on how to best make my money work for me. I drive my wife nuts!

At any rate, any additional information on how to move forward with pursuing this profession will be greatly appreciated.

Cheers,
Chad

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avatar JimmyMich

Chad,

I may be mistaken but ANYONE can call themselves a “financial advisor” and if you can find anyone to pay you for your advice/services, you are in the business. I am considering this line of work down the road when I retire in a maximum of 10 years. I want to be at the point where I don’t need the money and will do it because I enjoy it.

I am not a salesman but would enjoy helping people (by word of mouth) build a plan for low cost. A lot of this stuff is not rocket science and there’s a niche of people that don’t need a professional (CFP) to work with them. I’m not willing to put the work/expense into what it would take for that (CFP) but I possess a lot of personal experience that I feel I can share with certain folks. Unfortunately, if you have to make a living off of financial advising, it will take more than the casual effort I’m prepared to give.

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avatar Terry Leeders

#3 job? they must not be doing a good job, otherwise they wouldn’t have had to do the bankruptcy reform that happened in 2005 in BAPCPA law. General personal finance should be taught in high school. Drop the home economics and teach these kids how to balance a checkbook, how not to spend what they don’t have, and how to live within their means!

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avatar zen

I just wrote something similar to this – we’re similar in our conclusion and desires (but you’re much more closer to the point I want to be).

I’m still working towards my degree in Finance, if I ever get to the point of a CFP I’ll let you know :)

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avatar catbat77

Hello. I am 31 years old and will be graduating with my MBA in December. I have four children (young ones) and am looking to return to the workforce after being off for a year and a half. I have fourteen years of accounting experience and am wondering if I should become a financial advisor. I do not have ANY sales experience but I am a likealbe person and a very hard worker. I interviewed with Merrill Lynch and have been given the opportunity to go through their training program. I am not sure if this is what I want to do. I need advice. I want to know if anyone has worked for them and also if this is the best company to go through? I also am curious to what the actual job entails? How many hours do I really have to work over 40 and would working my forty plus maybe a Monday night and Saturday morning would do? Also, would it be more feasible to just go get a job or do this? Any advice would be greatly appreciated?

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avatar catbat77

Can someone tell me what the difference is between these three credentials and also which one makes the most money and which one is the hardest job?
a CFP, a ChFC or a PFS (Personal Financial Specialist).-thanks :)

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avatar zen

From my (very limited) research:
CFP is Certified Financial Planner.
Est. income: ~$60k

ChFC – Chartered Financial Consultant has a higher income (according to one site) of 51%.

PFS – Personal Financial Specialist is for CPAs who want to get into financial planning.

PFS sounds like your best option (IMHO) but the other two require more experience in the financial sector (if I read it right). You should always double-check, as I am not any of these designations, just a Finance Student!

Here’s an article that goes more in-depth: link

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avatar Noel

Terry leeders.
the sad part about BK is that kids are not really the ones filling, the grown ups are doin it in large numbers at least til the new rules became effective aprox 30% of the grown up US population. just by constantly reading the horror stories of how ignorant most people are when it comes to ther finances. leads me to believe that there’s a great deal of opportunity in the profession. i’ve been involved in a similar profession the last 14 years of my life achieving the 6 figure income but of course it’s getting old for me so I think a change will do me good, I know I’m good with people so for me it’s just a matter of compleating all my courses and hooking up with the right company. Any recommendation of a good company will be greatly appreciated.

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avatar matthewbart67

Catbat77: I’m getting ready to enter the field after practicing law for many years. My suggestion is to network as much as possible with others in the field before making a decision. Find someone you know in the field or get a referral from someone in the field then go from there asking if there is anyone else you should meet. I talked to at least 10 people in the field and spent 2 days on the job with a friend. I also met with the branch manager and other advisers in the branch at least 5 times before getting an offer. Talk to wirehouse professionals and fee based independent planners. Find out as much as you can before making the decision. Most people will want to talk about what they do and will help give you information. Take your time. The industry is always looking for good people so the job will be there when and if you are ready. Good Luck.

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avatar broknowrchlatr

I have just decided to work on getting a CFP. There are several online programs that I am looking at, particularly one from Boston University. I’m not quitting my day job, though. My current plan is to offer services at very low cost in my home town. I just want to be able to get out of it what I pay into it in tuition. After that, I think I would do it for almost nothing.

I want to be able to help people and I think this is a good way to do it.

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avatar jasonw32

I agree with matthewbart67 on his advice of networking to find the right match. I graduated with a degree in finance only one year ago and have since been working in insurance underwriting. If you don’t network, it is very difficult to understand what your career as a “financial advisor” will entail. There are many places to work for in this career and from the research and interviewing I have done, they can be very different. I have been offered a position in which I would sell insurance and financial products. I’m not sure if this is the way to go. Would selling financial products exclusively be a better option? They claim that being able to sell insurance products helps to get their foot in the clients door. Then they go after the clients investments. Sounds to me like they are glorified insurance sales agents. Any thoughts or input?

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avatar Underpaid Ph.D.

If you want to be a college professor, get your advanced degrees in business, law, medicine, or the hard sciences. Do not even THINK about the humanities, the arts, education, or anything you imagine might interest you more than the subjects above.

The only university faculty who get paid well are teaching in colleges of business, law, or medicine, or are researchers in engineering & pure science. With a Ph.D. in English; 15 years of real-world experience as a journalist; two scholarly books, three trade books; and uncountable magazine and newspaper articles in print; 10 years of teaching experience–with top performance ratings–on the upper-division and graduate level, I was earning $43,500 before I moved to a better-paying supervisory job. The local newspaper published an article listing wages for city workers; staff in the city’s maintenance department were earning more than I was.

At my university, the people who earn in the triple digits are in business, law, medicine, & the sciences. The rest of us who have the privilege of teaching gigantic classes of required courses never come anywhere near that kind of earning power.

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avatar Joeg

I am a software / networking professional. I have been doing it a long time and I agree it feels like a million. Especially now with foreign competion and recent grads the wages are down.

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avatar Clemente M.B.A

I am considering a career as a Financial Advisor with SmithBarney for the three year paid training program. I finished my MBA in marketing in May of this year. I am wondering what is the salary they will be offering or what salary I should be asking for? I have many years in sales if anyone could give me some insight on the salary I should be expecting, pros & cons about being a Financial Advisor I will greatly appreciate it.

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avatar trying to get there

hey clemente mba, what did you find out about smith barney? I am looking to change careers (from the car business to Financial advisor). I am trying to find some needed info and salary expectations.

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avatar andre

i am new to this Financial Life and am trying to learn about it. i am almost done getting my bills payed off and will soon be able to start a portfolio. i was hoping someone could point me in the right direction to a good book to help me learn how to manage a portfolio

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avatar multiguy

I am an advisor, and make north of the total you mentioned. I am only in my early thirtees, and have made a nice income in my eight years. But the negatives are aplenty:

1 You are always on call. You depend on your clients for your income and referrals, so your cell is always near, and always on.

2. You will get yelled at all of the time. It is a numbers game. With 700 clients, 10% will be mad at you. That is a lot of yelling.

3. People are sue happy. If you happen to start during a bear market, look out. Most advisors are always under the stress of being sued.

Other than that, there are a lot of positives. Best of luck!

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avatar shfintz

I am a third year law student, who is considering becoming a financial advisor. I have been through a few interviews. and it sounds pretty interesting. Can anyone compare financial advisor to being an attorney at a small to mid size firm? The pros and cons? Thanks

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avatar Jaye

I am interested in the financial analyst/manager type career move. I have taught government as a full professor for 15 years, I have a law degree, I would change careers for the money. Not as much free time, but more money. Student loans, husband had major surgery that our insurance would not cover. So money is on my mind. I make about 70K now and I have not passed the Bar.

Well, what do you think? I am 45, no children, great husband who also teaches, but we never have enough money!

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avatar Ginger @ Girls Just Wanna HAve Funds

I am also interested in this career path as well… but like you Ive avoided making any really solid decisions about what I really want to with my life. This is after 2 Masters degrees and toying with the idea of a third along with the CFA designation. Web development is something that I really wish I’d pursued when I first moved to DC.

DEcisions decisions…

The only thing that really kills me about the CFA position is the selling. I am sooo not a sales person and I like working from home in my pajamas.

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avatar wittylinehere

After reading this blog here are a few of my comments.

I have been investigating this job thoroughly because I am interviewing for positions and am planning on accepting my offer from Smith Barney.

If you love finance but you do not like sales, then this is not the career for you. You would likely be happier as an analyst at an investment company. Similarly if you are an excellent salesman but have not started studying finances this is going to be very difficult and probably not a good choice long term. A financial advisor must posses two very different personality traits they must be highly social and highly analytical.

The first few years you need to build a book of business. After you get your insurance and broker licenses you are basically expected given a business card and told that you have X amount of time to get Y millions of dollars under management. Now what? Here is where you will need to sell. In order to sell to people the idea that you should advise them on their finances and investments they will expect you to know about finances. Hopefully you are like me and investing is has been a passion of yours for years.

As time progresses the job transitions from sales to consulting. Eventually you have built a large enough book of business, and have enough clients that trust you with their investments, such that you do not spend much of anytime selling. Now the job is to make sure that all of your clients are meeting their financial goals, and that their assets are allocated properly. If you do this well you should get a few more referrals and your business continues to grow to your ideal level.

All of the companies out there have different offers. Northwestern basically wants you to peddle insurance. You make money no matter what you sell, but you make a heck of a lot more when it is their insurance. I could never work in an environment like that. I want to be able to do what is truly best for my clients. Then their are companies like Ameriprise financial. They seem to want everyone with a bachelors degree that can pass a relatively easy test. They had about twenty of us in a conference room where they tried to sell us on the job. Evidently the base salary and commission is in the middle tier and they charge clients in the middle range. Ameriprise also expects the financial advisor to front the $1,000 for the insurance and brokerage licenses. Then after about ten weeks of study and waiting for the results, if you pass they will hire you and they will reimburse you for the licenses.
Edward Jones pays slightly higher than Ameriprise.

At the high end of training and salary are Smith Barney, Merrill Lynch, Morgan Stanley, and UBS. These are full brokerage wirehouses that also have the resources of the largest investment banks in the world. For example Smith Barney is owned by Citigroup. In the list of the top 100 advisors in terms of assets under management it is dominated by Smith Barney and Merrill Lynch, with a slight edge to Smith Barney.

I don’t know about all of these companies internal pay scales, but I went through interviews with Smith Barney and have received an offer. They allow advisors to build the business as that advisor seems appropriate within approved guidelines. This means you can build a business where you make purely a commission on everything that your clients buy and sell, or you can make a fee for assets held under management. Like most Smith Barney Advisors I would choose to build my business in a Fee Only or Fee Based style. I do not like the idea of my income being purely tied to when a client buys or sells stock. It creates a bad incentive for me to buy and sell stock rather than create wealth. I will want my clients to know that I only make more money by making them more money.

Someone asked how much they would make with Smith Barney. There is probably a range depending on your background and what you made in your last position. That said, the three year base salary I was offered is in the mid $50s for the first 2 years and then begins to decline. With this base, the research I have seen shows that after all the bonuses and fees the first year total compensation range is $60,000 for such bad performance that you should start looking for a new job to $120,000 for the top ten percent. This is assuming you are brand new and are not bringing existing clients with you from another advisory. As you can imagine they are highly selective about who they will choose. Even after being carefully selected only about 60% of the new advisors build a successful book of business, and survive past one and a half years. The vast majority of those that hit the rigorous 1.5 year keep your job quota will survive to make a successful business. Five years out the average earnings for a Smith Barney advisor is approximately $250,000. Top 10% performers earn in the millions at that point. For a reference Edward Jones had similar failure rates but the average starting earnings was half to two thirds of this and the five year out pay was closer to what is quoted in the above magazine article. It is much like starting your own business except with lower failure rates and not quite as large of a financial pay off. Maybe half make it and they have a solid shot at being a millionaire. Try to start the next Microsoft and you are looking at maybe 2% make it but if you make it you have a shot at getting on the Forbes list. Just like any investment there is a trade off between risk and reward.

There are also independent advisor companies. Raymond James is one of the best in that area. They allow you to buy the franchise and have less oversight. The veterans are moving this way because they do not like the compliance that comes with being with one of the major wirehouses. They also get more freedom, but they have to do all their own back office work and they give up all of the research and company professionals that work for the worlds largest banking companies. In addition, I find the independent route particularly challenging for someone like me who is brand new in the business. I could really use the training, mentoring, and brand name recognition that is available at a company like Citigroup’s Smith Barney Advisors, Merrill Lynch, Morgan Stanley, or UBS.

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avatar Dave

Many of you looking at his career opportunity are not seeing the whole picture. There’s more to being an advisor than asset management. There are 77,000,000 ‘Boomers’ that have run out of time to build a portfolio and simply need solutions to their retirement problems such as:
1. How to get out of debt before retirement.
2. How to get the maximum sustainable lifetime income from the nest egg.
3. How to get control of monthly expenses.
4. How to minimize tax liabilities.
There are 3 quadrants of the personal balance sheet that are being completely ignored by the wirehouse advisors.
….and, you don’t need to be a “registered rep” to work with people in these areas. You can be completely independent, make a good income, and it’s not about selling, either. It’s about educating. It’s about positioning.
People have big problems out there. There are practical and effective solutions. By positioning yourself between the two, your have value. Client will seek that value and you don’t have to “sell” anything.

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avatar lookingatFA

Witty,

Thanks for your post. That really gave some great information. I am currently interviewing with Smith Barney and Wachovia Securities. I really like the fact that Smith Barney doesn’t decline the salary for two years. Most first start declining the salary very quickly.

Did you start with Smith Barney?

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avatar Rob

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.

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avatar Smith Barney Advisor

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.

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avatar paperpusher

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

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avatar Smith Barney Advisor

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.

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avatar Smith Barney Advisor

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.

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avatar 2FAornot2FA

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.

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avatar shonna simons

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!!!

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avatar 2FAornot2FA

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.

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avatar Charles

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

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avatar futureinvestmentadvisor

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

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avatar AGsucker

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.

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avatar Anonymous

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.

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avatar failed pmd

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.

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avatar michael0909

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/

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avatar Already an Adviser

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!

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avatar FA losing hope

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!

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avatar Attitude

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!

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avatar Hopeful

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?

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avatar FortunateandCurious

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.

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avatar ShowMeThe$$$

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???

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avatar yungmoney

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 .

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avatar Wirehouseguy

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.

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avatar FA Truth

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.

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avatar Old Veteran

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!

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avatar shonna simons

Old Veteran,

What firm do you have your umbrella under? If you dont mind me asking……

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avatar Mike9999

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!

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avatar shonna simons

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!

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avatar Mike9999

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.

avatar Merv

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.

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avatar Michael O'Connell

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………….

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avatar failed pmd

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.

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avatar d617

“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.

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avatar Smarter Than Many

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.

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avatar Smarter Than Many

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.

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avatar Call me Financial Consultant

Okay, I worked as a stockbroker, Financial Advisor and now Financial Consultant for an online discount brokerage company. The three are all completely different and huge gaps in the pay scale. As a hungry stockbroker starting and getting my licenses on my belt, it was the most difficult thing I tried to with a no name grey area firm. It sucked and made no money, BUT it landed me a wire house firm which gave me more experience, marketability, a salary so I can eat and pay the bills and an interview for the online brokerage company, which gave me what I was really looking for. A book of clients to work with, help people that actually wanted your help, get a good salary and bonuses, love what you do and gain even more experience. We shall what the next step is.. Good Luck everyone, it was difficult, but i think worth it so far.

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avatar HadHisEyesOpened

I want to thank everyone who posted here. I will retire from the Air Force in 18 months, and have been considering the FA career option with Edward Jones. They are aggressively recruiting military members transitioning out through separation or retirement and have an attractive training program/salary etc. I like their business model, and even spoke with a retired veteran who went to work for Jones 11 years ago and has loved every minute of it (he is in AZ, I am in GA, so I can’t see any reason he would have to deceive me about this). Reading these comments have definitely given me pause. Honestly, I am not much of a salesman, and I have a serious problem using people for my own benefit (like the people discussed who sell their clients investments/insurances they don’t need etc). I’ve been watching markets more and more closely over the last 6 years and am pretty convinced this is all going to go to hell in a handbasket anyway. Perhaps this is not the right career move for me.

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avatar Old School

I’ve been in this business for a long time and there are a lot of smart guys in this business. The ones who are not smart really don’t last. I don’t know too many $1million+ producers that aren’t pretty savvy because you aren’t going to keep sophisticated clients if you’re not capable. You can’t fool people for very long.
No one should become an FA without doing their homework. If you got into this career not knowing that it’s a high risk, high reward occupation, then you didn’t do your homework. As someone said earlier, you have to be multi-talented as an FA. You have to have analytical skills, interpersonal skills, and equally as important BUSINESS SKILLS. I saw so many trainees (many very smart and nice people) fail because they got into the business thinking they are good at the investment side of the business, or wanted to help people, but they didn’t approach the business as if they were starting their own business. They approached it like a job, not like an entrepreneur. They weren’t connected with people with money and they didn’t “hit the ground running.” After struggling, they’d start feeling the heat and pressure from the firm to produce, then they’d hope they could team-up with successful FA’s and someone would save them and throw them a lifeline. Basically hoping for a handout. It’s very rare that other FA’s will just give anything of value away for free. Why would they? Their businesses are worth something. Large firms seem to take a beating in these forums but I found them very straight forward. The firms are clear. You are the CEO of your business (you may not “own” it but they want you to treat it as if you do!) You can build it however you choose. Anyone entering this business should be entering it with the same approach they’d take if they were starting any business and trying to get a loan from a bank. They need a viable business plan. How are you going to build a client base. Who will you target? How will you target them? Why are they going to entrust you with their money? It’s going to be a tough road if you get into this business and don’t already have a good idea of who your client base will be. If you can’t answer these questions, then you’re not ready for this career. I know a guy who knew he eventually wanted to become an FA, but waited 10 years after graduating undergrad before starting as a Financial Advisor. He got his MBA from a top 10 school, networked and planted seeds with wealthy people along the way, got involved in the community, and told his wealthy contacts that he thought he may someday become an FA. He got a good sense of who might work with him long before he started. He prepared himself to have credibility and be trustworthy and now produces more than $1million/year. That didn’t come for free! He had a plan and he executed that plan. He worked smart. He’s making at least $400k+/yr now. Jobs that pay that kind of money don’t grow on trees and if you expect to make it then you have to expect that it’s going to take a lot of hard work, preparation and skill to get to that level.
As for large firms being controlling, I was never told to “sell” any specific products in my 20 years as an FA with a large firm. I was told I needed to generate a certain amount of revenue but the firm didn’t care what I sold to generate that revenue. It’s a bottom line business. If you run a clean business and generate a reasonable level of revenue ($500k+) then you have a lot of job security and they pretty much leave you alone. They do like to see growth but so should any business owner.

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avatar Wanna be Financial Advisor

@Smarter Than Many
Thanks for the honesty. Honesty is kind of becoming luxury in this world. If your buddy doesn’t spend more than 90 seconds with prospect would you share his script/approach/questions? I guess there is not too many questions/scenarios you can cram in 90 seconds…

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avatar Anon

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.

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avatar Smarter Than Many

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.

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avatar Smarter Than Many

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.

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