Entry-level financial planner...what to expect?


X

xyzer

I have an accounting degree and have a general knowledge of taxation of
individuals, including partners/S-Corp shareholders, and also of
taxation of C-Corporations. Even though I've passed the regulation
(tax/business law) section of the CPA exam, I'm having some trouble
finding accounting work. I've gotten some leads, but I don't have any
real-world accounting experience, so that is holding me back slightly I
believe. Anyway, recently (and another time before not so recently) I
received an e-mail (which I'm sure every other local person who has an
accounting or finance/business degree received as well) through
monster.com from a financial services firm that's expanding into my
area. It's a national firm, though the name isn't nationally known by
everyday people.

So, if this firm is like most firms who interview just about anybody to
see if they could be a good fit, what's it like for the entry-level
scrub? Is it like other industries where they start you off with about
10 leads or so and you're on your own trying desperately to make
contacts through cold-calls? Am I guessing correctly when I assume
that I really wouldn't be doing much
"planning" at all in the beginning?
 
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X

xyzer

I have an accounting degree and have a general knowledge of taxation of
individuals, including partners/S-Corp shareholders, and also of
taxation of C-Corporations. Even though I've passed the regulation
(tax/business law) section of the CPA exam, I'm having some trouble
finding accounting work. I've gotten some leads, but I don't have any
real-world accounting experience, so that is holding me back slightly I
believe. Anyway, recently (and another time before not so recently) I
received an e-mail (which I'm sure every other local person who has an
accounting or finance/business degree received as well) through
monster.com from a financial services firm that's expanding into my
area. It's a national firm, though the name isn't nationally known by
everyday people.

So, if this firm is like most firms who interview just about anybody to
see if they could be a good fit, what's it like for the entry-level
scrub? Is it like other industries where they start you off with about
10 leads or so and you're on your own trying desperately to make
contacts through cold-calls? Am I guessing correctly when I assume
that I really wouldn't be doing much
"planning" at all in the beginning?

On another note...

How common is it for people who run, say, their own tax practice also
to work as a broker for a financial services firm and when new clients
come to their own tax practice on their own property they, along with
giving good tax advice, attempt to sell (on commission) products from
mutual fund X or whatever?

I can see myself trying to attract clients this way perhaps through
advertising myself as a tax person, which I would be, and then being
able to introduce clients directly to a way to invest in a traditional
IRA or whatever type of IRA would suit him/her best... Of course, I
obviously would need to research the legal aspects of such behavior
before doing such activity...I have a feeling there are plenty of legal
pitfalls when doing something like this, if it's even legal... So what
should one be careful of in this sort of situation?

I guess for someone like me whose network is not yet large or all that
well-to-do, my whole idea here is that it would be much easier to
attract clients by advertising something they pretty much have to do
(pay taxes) and introducing them to the mutual fund/insurance product
that way rather than the otherwise inevitable massive amount of
cold-calling I would have to do.

Of course, one problem is that during the tax off-season, using this
method might not work all that well to find clients, at least
initially.
 
R

R.A. \Red\ Lawhern

On another note...

How common is it for people who run, say, their own tax practice also
to work as a broker for a financial services firm and when new clients
come to their own tax practice on their own property they, along with
giving good tax advice, attempt to sell (on commission) products from
mutual fund X or whatever?

I can see myself trying to attract clients this way perhaps through
advertising myself as a tax person, which I would be, and then being
able to introduce clients directly to a way to invest in a traditional
IRA or whatever type of IRA would suit him/her best... Of course, I
obviously would need to research the legal aspects of such behavior
before doing such activity...I have a feeling there are plenty of legal
pitfalls when doing something like this, if it's even legal... So what
should one be careful of in this sort of situation?

I guess for someone like me whose network is not yet large or all that
well-to-do, my whole idea here is that it would be much easier to
attract clients by advertising something they pretty much have to do
(pay taxes) and introducing them to the mutual fund/insurance product
that way rather than the otherwise inevitable massive amount of
cold-calling I would have to do.

Of course, one problem is that during the tax off-season, using this
method might not work all that well to find clients, at least
initially.
I'm not a professional in your trade, xyzer. But as a consumer of
financial advisor services, I would suggest that there is a profound
conflict of interest for any financial advisor who also derives a
commission from investments that he or she recommends. If you are at
all interested in thinking about alternatives to placing yourself in
such a position, then you might want to read the code of professional
practice of the National Association of Personal Financial Advisors
(http://www.napfa.org). Of course, if you intend to pursue this type of
business in the manner you've outlined, you will need to register as an
investment adviser with SEC. For anybody who bothers to read your form
ADV, you're not going to show up well without a considerable amount of
additional training as a CFP.

I don't know your personal history, of course. But I'd have to wonder
if there is some specific reason you feel constrained or disinterested
with respect to taking employment in a larger CPA firm? Apart from
difficulty in finding a position, that is? Everybody fresh out of
school runs into a certain amount of that. Your resume could easily be
shooting you in the foot, for that matter. If you care to have a senior
professional in a different field (engineering) look at your res, then
feel free to sent it along to (e-mail address removed). There is also a
large archive of job-search related resources on my personal website, at
http://www.lawhern.org. Feel free to visit and use what's there.

Regards and Best.

R.A. "Red' Lawhern, Ph.D


======================================= MODERATOR'S COMMENT:
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T

TB

what's it like for the entry-level

You don't mention the firm but if they emailed you, it's likely to be a
sales-focused position rather than something where you spend a lot of
time on planning. You'd be expected to start with your natural market
and build out from there. The training is probably focused on sales of
insurance or investment products (or both). You should call and ask
about the position to find out for sure.

How common is it for people who run, say, their own tax practice also
to work as a broker for a financial services firm and when new clients
come to their own tax practice on their own property they, along with
giving good tax advice, attempt to sell (on commission) products from
mutual fund X or whatever?

I can see myself trying to attract clients this way perhaps through
advertising myself as a tax person, which I would be, and then being
able to introduce clients directly to a way to invest in a traditional
IRA or whatever type of IRA would suit him/her best...
Assuming you were properly licensed as a registered representative (aka
broker - selling commissioned products) or as a registered investment
advisor or advisor rep (charging fees) it's a perfectly legal
combination, and is an add-on business for a subset of CPAs. I think it
makes sense because in preparing taxes you by necessity gain full view
of a client's investments and their use (or misuse) of the various
tax-advantaged alternatives. A great deal of financial planning is
really tax planning so it dovetails well with a tax practice.

If you work on a fee basis now, it seems a better professional fit to
continue on a fee basis to the extent you advise on these other topics
(meaning go the registered investment advisor route rather than the
commissioned sales rep route). If you work with commissioned products it
changes the nature of the relationship a bit and as you suggest, could
raise more conflicts of interest.

-Tad
 

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