Becoming a Financial Advisor...How???

[samadams_2006]

I'm interested in becoming a Financial Advisor, but I'm not sure of
the best way to become one. I'm told that I will need to take
certification exams, but do I need to get certified, then look for a
job? What are some of the companies I would contact about a job once
I have my certifications. Are there any companies who hire people as
"trainees", in which you get paid and prepare for the certifications
at the same time?

Thanks
Sam

 

[John A. Weeks III]

I'm interested in becoming a Financial Advisor, but I'm not sure of
the best way to become one. I'm told that I will need to take
certification exams, but do I need to get certified, then look for a
job? What are some of the companies I would contact about a job once
I have my certifications. Are there any companies who hire people as
"trainees", in which you get paid and prepare for the certifications
at the same time?

Many folks get involved as Financial Advisors by joining one of
the big firms, going through their excellent training programs,
and then working there for a few years. The company formerly
known as American Express has a notable training program that
teams new advisors with successful older advisors to help them
jumpstart their business.

There are other options. You can go the insurance route, and
then pretend to be an advisor. Or you can join Primerica and
do it the multi-level way.

Most places expect you to take the exams during or at the end
of the training program. It is helpful to have some education
in the field, but some very successful people have come in cold
and done well. For example, my advisor was a CPA before joining
his firm. Suze Orman was a waitress in Oakland before becoming
one of the top stock brokers at Merrill Lynch in San Francisco.

-john-

 

[kastnna]

If I remember correctly some of the certifications require
"experience." For example, the Certified Financial Planner (CFP)
designation requires 3 years of full-time qualifying work experience.
This alone can make it tough for someone to "jump in head first".
There are also minimum education requirements (bachelors, masters,
etc) and pre-approval courses must be completed just to sit for the
exam (with limited exception).

Internships, assistantships, and entry-level training programs are all
a good start. You will see CPA, CFP, CLU, ChFC, CFA and a number of
other designations attached to the names of many financial planners.
CPA leans towards taxes, CLU is insurance oriented, CFP is
comprehensive (little of this, little of that), ChFC is close to CFP,
and the CFA trends towards investments. Any and all are worthy and
compentent titles. I most often see CFP and CPAs doing comprehensive
financial planning.

I wouldn't recommend earning one or more of these titles BEFORE
looking for a job. As I stated, its not even an option in some cases.
Also, the costs of these programs can be very high. Even though I have
Economics and Business admin undergrad degrees I was not even close to
covering the pre-requisites for a CPA cert. Our company estimated the
costs to be > $70k for the accounting pre-reqs, a masters of
accountancy, and the CPA certification process. On the other hand my
CFP was easily less than $10k. Companies will sometimes pay the
expense for you also!

Good luck in your endeavours. I am sure I forgot a designation or two,
and I apologize in advance. If you want to know more, google any of
the common designations and you should hit paydirt.

 

[nosmo king]

Many folks get involved as Financial Advisors by joining one of
the big firms, going through their excellent training programs,
and then working there for a few years. The company formerly
known as American Express has a notable training program that
teams new advisors with successful older advisors to help them
jumpstart their business.

Research the company and the jobs before commiting to their training
program. A few years ago, when I was laid off, I looked into a
program at AXI (which may have been part of AmEx). One of the
"graduates" told me that once you completed training, you were
expected to make 100 cold calls per day, which an expected hit rate of
~3%. The successes were then turned over to the more experienced
planners to handle.

 

[kastnna]

Research the company and the jobs before commiting to their training
program. A few years ago, when I was laid off, I looked into a
program at AXI (which may have been part of AmEx). One of the
"graduates" told me that once you completed training, you were
expected to make 100 cold calls per day, which an expected hit rate of
~3%. The successes were then turned over to the more experienced
planners to handle.

Definitely research the firms, but the you'll experience a similar
situation with many of the large firms (not all, of course).

Before you have the necessary SEC/NASD licenses (series 6, 7, 63, 24
etc etc) you are not legally allowed to talk to a prospect about
certain topics. Add this to the fact that you won't have these
licenses before your employ means that you have no choice but to hand
over the sale. Telemarketing in this fashion is common, but is more
associated with brokerage firms than it is comprehensive financial
planners.

In the FP industry look more for a mentor environment than a sales
environ. You may start out with just a small salary and you'll assist
the CFP/teacher with his cases. Plugging in numbers, doing the math,
learning the right questions to ask, and perfecting the process are
all part of learning.

 

[PeterL]

Research the company and the jobs before commiting to their training
program. A few years ago, when I was laid off, I looked into a
program at AXI (which may have been part of AmEx). One of the
"graduates" told me that once you completed training, you were
expected to make 100 cold calls per day, which an expected hit rate of
~3%. The successes were then turned over to the more experienced
planners to handle.

OK how else are you going to acquire clients? You exhaust all your
friends and relatives? Whether you work for a big firm or small firm
or strike out on your own, you have to have clients in order to make a
living. Don't tell me you think the company has a list of clients
just waiting for you to service them.

 

[scott]

I'm interested in becoming a Financial Advisor, but I'm not sure of
the best way to become one. I'm told that I will need to take
certification exams, but do I need to get certified, then look for a
job? What are some of the companies I would contact about a job once
I have my certifications. Are there any companies who hire people as
"trainees", in which you get paid and prepare for the certifications
at the same time?

Thanks
Sam

Hello,

I went through all of this a few years ago. I was already in a decent
job doing accounting work for a large oil company, but working like a
dog and not particularly liking what I was doing nor finding it
rewarding. I decided that due to some family circumstances, I would
like to take a few CFP prep classes at the local university at night
to see about a new career. I ended up loving it and doing well in the
classes, and took all of them. I was by far the odd-ball, not
currently working in the industry, as most were already in the field.
I then researched different firms, joined the Financial Planning
Association at a student rate and went to the local meetings. You can
learn some by asking questions as people like to share their opinions,
like I am now (LOL). A fellow classmate talked me into going to the
FPA annual conference in San Diego where they had a special program
for "bridging the gap" which talked about getting into the business
and also issues for new planners. They even had a panel of
experienced advisors who you could ask questions of, and then a job
fair where you could talk to firms about recruitment. They also even
had a thing where you could sign up to talk to the panelists one-on-
one afterward. They had an excellent program and it was worth the few
hundred spent in logistics, wife turned it into a mini-vacation.

What I heard over and over was this: Most smaller firms can't provide
the in-depth training larger firms can, so join a group like
Ameriprise, MetLife or the like and get your licenses, suck up
information and get feet wet. I took this advice and all other
research and it started to become clear. Eventually, I interviewed
with AXA, Amex (now Ameriprise), Northwestern Mutual, Thrivent, First
Command, AG Edwards, MetLife here in Houston.

What I found was a similar but diverse set of business models. Most,
like NW Mutal would hire you as a 1099 (contractor type), while others
(MetLife) would hire you as a W2 employee with benefits. You have to
ask what you pay for - exactly, and how this changes over time.
Expect to pay for computer and software somehow - either monthly or
all at once. Office rent. Are supplies included? Do you pay your
own mail cost? How much is E&O coverage? What are the sales
minumums? How do you get clients?What marketing support is offered?
When you are training, are you splitting income with the trainer?What
is the retention rate (success rate) for new hires? How do you get
paid? (expect this to be complicated). At First Command, I never did
100% understand this and it wasn't printed up in any brochure. Of
course not seeing this in black and white is typical, and its quite
suprising how many people make a career decision and not understand
these basic things ahead of time.

What did I do? I ended up with MetLife, and I don't regret it. The
reasons are that they will train you for 19 weeks while you get your
licenses and feet under you, and pay you at a reasonable salary
(usually close to what you were making). Sales during this period are
credited to your "account" and you then try to maintain it as you go
to full commission. Why an insurance company? While it is true that
until you get experienced MetLife will not let you be a full financial
planner, you have to start somewhere in any firm, and as you will
likely find out, nearly every client could use some sort of insurance
product to reduce risk - be it long term care, life, disability,
annuities, variable life etc. Why not make money on this while
building a client base? Insurance pays reasonably well, and annuities
and variable life are great tools for certain clients. We also offer
other insurance companies' products. We can do 401k's, business
benefits like dental and health plans. The business model is pretty
wide open.

As to mentoring, at our office it works like this, you have an mentor
type who you go on appointments with and train with during the 19
weeks. After that, you can continue to use the AD's on staff as you
need to for followup appointments, and you negotiate your splits with
them. For some clients you can handle them yourself. Look down the
road and you can see yourself training others and getting some of
their business as you help them.

Everyone of the firms will tell you that you start with your "natural
market" of family, friends etc but then ask for referalls to others.
I have a dislike for telemarketing and have found mail very low
response rate, but you have to do some of both.

I can go on and on, but just ask questions if you have more
questions. If you do decide to go with MetLife please let me know as
I get a little bit of a perk (full disclosure). I hope you found my
comments to be of value. Compare companies yourself and see what you
like. Also, it helps to have a spouse with income or some cash saved
up as you will have thin months typically starting off.

Goodluck -

Scott