Financial Advisor

[trulfe]

I am thinking about signing up to be one, but the temporary set back of $6.75/hr while studying for series 7,66 and health and life exams are kinda worrysome.

Anybody do this for a living or know someone who does? How would you perceive it as a career, how much do they make? Thanks

 

[Pundit]

Are you talking about working at a financial institution? My friend does that and he makes CDN $20/hour working part time. The full timers are salaried at about $30-40Gs I believe. Would you be selling mutual funds, mortgages and the like?

 

[linuxboy]

Hey,

The 7 isn't bad and the 66 is just memorization. You need classes for life ins.

As a career, this is very competitive. Why should anyone use you as an advisor? Plus, later certs like the CFP mean you have plenty of competition and need to really memorize A LOT of info before you can build a clientele. Once you do go and start making clients, be ready for cold calls, prospecting, meetings, and a payout based on commission unless you work for some company that pays salary. The pay in the financial services industry is great, average of somewhere in the 120's for account execs and more if you actually get all the licenses and build your own business. Many people who start this either fail out of exams, or cannot build a business due to personal inability, lack of tenacity, poor training, or whatever. Also, the big brokerages will keep you in place while they collect the money from your work.

I guess it depends on how hard you work, how persistent you are and how trainable you are+ the mentorship. It can be very lucrative, I know guys who have worked for 10 years and make an income in the 400's due to 12b-1 fees from open-ended investment companies and from automatic investment programs into 401ks, IRAs, VULs and all sorts of other vehicles.

Make sure this is a good match for you, it needs to be a personality fit, this industry is not for most people. If you're motivated by money, that may be enough as the pay is great. The turnover after 5 years is virtually 0 because people who make it that long generally know what they're doing.

shadow or intern to see how you like it.

Cheers !

 

[trulfe]

The Job title is called Financial Advisor and many companies have them. I am looking at American Express LINK

 

[trulfe]

<< Hey,

The 7 isn't bad and the 66 is just memorization. You need classes for life ins.

As a career, this is very competitive. Why should anyone use you as an advisor? Plus, later certs like the CFP mean you have plenty of competition and need to really memorize A LOT of info before you can build a clientele. Once you do go and start making clients, be ready for cold calls, prospecting, meetings, and a payout based on commission unless you work for some company that pays salary. The pay in the financial services industry is great, average of somewhere in the 120's for account execs and more if you actually get all the licenses and build your own business. Many people who start this either fail out of exams, or cannot build a business due to personal inability, lack of tenacity, poor training, or whatever. Also, the big brokerages will keep you in place while they collect the money from your work.

I guess it depends on how hard you work, how persistent you are and how trainable you are+ the mentorship. It can be very lucrative, I know guys who have worked for 10 years and make an income in the 400's due to 12b-1 fees from open-ended investment companies and from automatic investment programs into 401ks, IRAs, VULs and all sorts of other vehicles.

Make sure this is a good match for you, it needs to be a personality fit, this industry is not for most people. If you're motivated by money, that may be enough as the pay is great. The turnover after 5 years is virtually 0 because people who make it that long generally know what they're doing.

shadow or intern to see how you like it.

Cheers ! >>





Great Post, very informative. I have heard that it is tough getting started, but once you have built your clients, you often get repeat business without effort while building more and more in the meantime.

 

[Ameesh]

funny you should ask, i am attending a class put on by one, he doesnt charge anything for the class but im sure he gets a lot of people to get his services.

He targets Microsoft employees and specifically teaches them about our options, 401k, benefits, life insurance etc. He then charges a fee based on the size of our portfolio annually, he seems to do pretty well, im sure you could do something like that

 

[linuxboy]

Great Post, very informative. I have heard that it is tough getting started, but once you have built your clients, you often get repeat business without effort while building more and more in the meantime.

If you know anything about real estate, it's like that but with many more rules and more tax considerations. You really have to give customers a reason to stay with you and that means calling them quarterly, checking to see if their situation changed, and just pampering them. You are the rep, and they can buy all the stuff online cheaper anyway. What will make your career in the industry is the personal service and dedication. Explaining investment concepts to people like dollar cost averaging, taxation, inflation, as well as general planning takes some time to get straight.

Ameesh, yeah, seminars are a great way to build business. That person is likely a registered rep and receives commission as percentage of the money people invest as well as trails from MFs.

Oh and trulfe, you do get repeat business from referalls but I think you missed a point I made. You get recurring commissions from 12b-1 fees in mutual funds. Class A shares get 30 basis point, class Cs get 100 and class Bs get 25, convertable to class As after 8 years. In effect, you get paid based on the money you have under management without even meeting a client but this has t be set up correctly as your broker-dealer can keep it, depending on your contract.

Cheers !

 

[StageLeft]

Linuxboy's post is great.

I considered this briefly last year while I was laid off in IT and was thinking of pursuing it. I went into to have a meeting with some guys that worked at a major company - I can't remember its name but it was pretty big with offices all over north america. I would recommend people on how to setup finances and investments and insurance and what not.

The reason that in the end I turned it down was that:
- it was entirely commission based. Thus starting off NO income at all.
- It was a top down approach for money meaning that if I found a client they would give me money which I'd have to give in part to the guy above me who would give to the guy above him, etc.
- it was clearly very slow going to get a decent income. You need a strong client base and in the area I was from it occured to me that if it was easy to get clients the guy trying to hire me would be getting them himself instead of spending $0 recruiting me and trying to get me to do it
- it felt like that company that is world famous for getting people who sell a bunch of useless junk to other people in a sort of pyramid scheme way

Ultimately I thought that it would have been a nice good paying job if i could make it to the top but starting off I'd be merely clamboring along with everyone else. It seemed like something with an incredibly high turnover rate in the early months because most people would realize that they couldn't cut it.

They wanted us to get our clients primarily from starting with family/friends who would then reccomend us to people they knew and it would span out.

For me it would have been a terrible, terrible mistake for where I was at that point in my life but for others it may very well be a good move.

 

[ElFenix]

i interviewed with amex, decided that being a financial advisor wasn't for me. looks pretty lucrative, but the "for the first 3 years you have no control over your schedule" bit, plus the cold calling, didn't sit well with me.

 

[dirtboy]

My dad is a securities broker and I have considered getting my license, but I believe this is a dieing industry.

How does the average joe by stocks these days? Most though Internet brokers because they are cheap and they can't afford a full service broker. You can buy mutual funds, IRA's or just about anything from the online brokers.

So, that leaves wealthy people and even they are going online. That means if you're going to break into the bus, you need to target wealthy people who see a value in paying somone to trade their stocks.

Commission sucks. There just isn't much money in securities. My dad, for example, is on a 65% contract. Not great. So whatever he sells, he gets 65% of the commission. You can get higher, but you must produce and nobody is going to give a newbie an 80-85% contract. The broker dealer is in full control. He could call my dad tomorrow and say, you haven't been producing, I'm cutting you to 50%. Or, he could call and say, you haven't sold enough so I'm cutting you off completely. That means the broker dealer would keep all of his commissions. Not exciting. Not to mention you must carry E&O (Error & Ommissions) Insurance which will eat away at your profits. But if you're making 65% of 4%, you're not getting rich fast.

So you decide to sell IRA's. You generate the lead (expensive), go visit someone and sell them. They invest $2000 with you. You get 65% of 4.75%. That is... $61.75 to your pocket. Now stop and think of how many leads you will need to generate to sell enough people in a day an IRA to generate a steady income. Alot! And believe me, generating leads is very hard!

But you say, I get a trail commission. Yes you do. My dad gets 15 basis points. Sounds exciting! What it really means, is he gets 15 cents per every $1,000 per year that is under management. So next year, that $2,000 IRA is going to pay you a trail of 30 cents!! Woo hoo!!

I had a friend who left IBM to become a financial advisor. He worked for Merril Lynch for awhile. He worked hard for years, hunting for people with money. From the way he lived, he didn't make a whole lot of money. Eventually he took another job and he said it was worth it, because he couldn't make it doing that.

I have another friend who was my instructor during my Dale Carnegie class. He too is a financial advisor and I can tell you, he wouldn't have been teaching that DC class on the side if he was making out great. He wasn't.

The glory days of financial advisors is long over. I predict it will be the next industry to go by the wayside, in terms of having a local representative. My advice is to steer clear of this industry and I say this from someone who is a licensed insurance agent selling annuities to teachers. Once the state is done legistlating me out of business, I could sell securities or go do something else. My plans right now are to change jobs. Good luck with whatever your decision is, but try to find someone in your area who is doing that and find out how it is.

 

[DaveSimmons]

<< The glory days of financial advisors is long over. I predict it will be the next industry to go by the wayside, in terms of having a local representative. My advice is to steer clear of this industry and I say this from someone who is a licensed insurance agent selling annuities to teachers. >>



Good post -- I'd bet that if you looked at age groups (of those with money) you'd see a massive drop off in use of a financial advisors for the younger investors.

Also, here in Seattle there was a lot of negative press about advisors after the tech bubble burst, because advisors had talked a lot of people into doing stupid things like buying on margin (i.e. borrowing to buy) to pump up the advisors' commissions, and those trusting investors were wiped out instead of "just" losing half their value.