What’s Life Like As A Financial Advisor? Depends On Your Pain Tolerance

Chart showing share of wealth accruing to various wealth groupsThe following guest post comes on the heels of “Should Your Financial Advisor Be Richer Or Smarter Than You?” where I discuss the plight of the less experienced wanting to break into a notoriously difficult industry with a high failure rate. Ben from Wealth Gospel shares his experience going through training as a junior financial advisor. I can’t help but wonder by the end of the article whether the key to any successful career is to just survive through the initial hardship. Hope you enjoy the insights!

According to the Bureau of Labor Statistics, a career in financial planning is on the up and up. Their research shows that the number of financial advisors is expected to increase by 32% from 2010 to 2020, much faster than the 14% average growth across all career fields. But if you take a look at the current group of advisors, less than 5% of them are under 30. That means the insane growth is more likely to come from career changers than young college graduates. Why is that?

Well, having worked in the industry, I’ve seen first-hand why the younger generation doesn’t want to touch it. But at the same time, I also learned how to scale those barriers that are scaring people away from a potentially lucrative and meaningful career in financial planning.

The Inverted Triangle

We all learned in Geometry that the triangle is the most stable shape because of its wide base and narrow top. But what happens when you flip that triangle upside down? That’s what it’s like to start a career as a financial advisor. There is almost zero stability. And we’re not talking here about starting out on salary. We’re talking pure, commission-only financial planning goodness.

One of the veteran advisors I worked with put it this way: “For your first five years, you’re eating crap sandwiches every day. And if you want to be successful, you have to make the choice to eat that crap sandwich, and you have to love it.” Yum, right? But coming from someone who’s been in the business for almost 20 years and makes upwards of a few hundred grand a year, it was as inspiring as it could get. He had gone through the rough stuff and now has all the stability in the world. The only people who can fire him are his clients.

And that’s what young people don’t understand. They opt for the corporate triangle because it feels more secure: solid salary, benefits and hopefully reasonable hours. Their minds have been filled with thoughts of how bad the economy is and how horrible the future is, so they go with what’s safe. But the higher up you get in that triangle, your stability actually decreases.

Politics, nepotism, and shareholder expectations make it difficult to keep everyone satisfied all the time. My father-in-law lost his job a couple of years ago after working 12-16 hour days for a year to keep his boss happy. In the end, his boss fired him to hire one of his buddies. And the average tenure for a Fortune 500 CEO is just a little bit longer than a presidential term. No wonder so many people switch to it after working the corporate scene for ten or twenty years.

So the real question is when do you want to eat the crap sandwich?

The Crap Sandwich

During your first 5 years in the business, it’s all about the numbers. Decades of studies within the industry show that for every ten people you contact, you can get three of them in front of you for an initial meeting, and one of them will become a client at some point in the next 3 years. So if you’re following those numbers, there’s going to be a heck of a lot of phone calls to a heck of a lot of leads.

When you’re starting out, those are going to be to your family and friends, people you went to elementary school with (“Dude! I haven’t seen you since that time I flicked a booger in your eye!”) and your fellow college alumni (That is, if you were smart enough to keep the directory).

Of course, you don’t want people to think it’s a pyramid scheme, but your other options are to whip out the phone book or go from door to door. Mmmm…can you taste that sandwich? You’re going to get a lot of noes and not a whole lot of yeses. You’re going to lose every bit of confidence you ever had, and if you’re married, your spouse is probably going to start wondering why they married you. You’ll be desperate to meet with people, so if someone wants to do a phone appointment at 6:00 a.m. or doesn’t get off work until 9:00 p.m., their schedule becomes your schedule.

Eventually, you get to the point where you have to decide whether or not to keep chewing. Most people do. In fact, the success rate in the financial services industry hovers around 12%. It’s hard. And if you aren’t good at it, or you don’t have a good network of people to start off with, it only gets worse. It’s important, therefore, to make sure you have a good support system. Find a mentor. Have your mentor’s wife be your wife’s mentor, because she’ll need it too. Leverage your optimism and keep a large reserve of it. You’ll have some great days and great paychecks, but you’ll mostly have really crappy days and sometimes minuscule paychecks.

Average Won’t Cut It

During the last semester of my undergraduate degree, I met with the professor of the Financial Planning course I was taking to discuss my career aspirations. I told him that I was doing an internship with a financial services firm doing financial planning and planned on doing that full-time after graduation.

He looked me straight in the eye and said, “The problem with that job is that you only get paid in commissions.” It was a very condescending tone, but he was right. That is a problem for a lot of people. When looking at information for the company I was working as well as similar companies, the average first-year salary for college graduates was somewhere around $16,000. And that’s just not going to cut it.

Suddenly it made complete sense that the business school pushed investment banking and public accounting so much and did so little to partner with companies like ours to recruit for summer internships and after-graduation jobs. Not only does it kill their numbers to have their “average” college grads reporting $16,000 incomes their first year out of school, but what business school wants to convince their students to take a career with an 88% failure rate? If you want that, get into the entrepreneurship program where failure is actually exciting.

But those numbers don’t tell the whole story. The reality is that the average first-year “commission-
only” salary for the top quartile of advisors is a little over $100,000. We even had one such guy in our office who was just a rock star. At 10 years that average is around $325,000 and at 20 years it’s close to $650,000. Those numbers look pretty awesome, but that’s still the top quartile.

It’s Not for Everyone

The younger generation seems to shy away from that line of work because they’re just not disciplined enough for it. Time management is a huge struggle because, although most companies have minimums you have to meet, no one’s going to keep you on task. And the golf and client appreciation events are fun, but the day to day cold calls and sales pitches…not so much.

You have to be able to maintain focus, have a clear vision of what you want and what you’ll do to get it, and be ready to work your butt off. That being said; it’s not for everyone, and that’s okay. Some people just aren’t passionate about it. Some people don’t have the work ethic. Some people just freaking hate sales. But if you are passionate about it and are willing to eat those sandwiches every day, don’t let those cold hard facts scare you. Being a financial advisor can be a very rewarding experience, monetarily as well as with the relationships you build and the good you can do for people who cannot do it for themselves.

As for me, I’m no longer in that industry because of some private circumstances. My wife and I had an experience that made us decide to move closer to her family. Since we didn’t know anyone there, I’d be moving from a “warm” market where I knew a lot of people and where my clientele was, to a “cold” market where I would have to start from scratch all over again. After a lot of thought, it just didn’t feel right to keep going, so now I’m looking to help people in a different way through writing about personal finance. I’m also working on an online business to help people in the financial planning arena, but that’s still a few years away. Oh, the anticipation!

Readers, anybody else ever work as a financial advisor? Some of the wealthiest people I know are private wealth advisors who work at the big investment banks. They have a huge book of business where they earn an annual fee. Their income is like an annuity that passes on for generations!

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Michael Kitces says

    Sam,
    Thanks for the article on the advisory world for those (bloggers?) thinking about entering.

    It’s worth noting, though, that not all entry level advisory positions into the industry are commission only. Historically, that’s absolutely the way that it’s been, but that is changing as advisory firms get larger and build out infrastructure and career tracks. Part of my businesses include one that hires new planners for entry level financial planning (salaried) positions, and the primary challenge is just finding the good people to fill how many openings we have (see http://newplannerrecruiting.com/job-opportunities/ for example).

    On the other hand, for many in the (PF) blogosphere in particular, becoming a financial advisor can actually be another way to monetize their blog (offering services to their readers); many current financial advisors are already trying to grow their businesses through blogging (e.g.,Brittney Castro of Financially Wise Women). Yet even that path doesn’t have to be commission-based products alone; it could be doing hourly planning/coaching with clients/readers for a fee (though similarly, it will be a “$0 of income until you get some clients” path).

    In any event, thanks for sharing!
    - Michael

    • Ben @ The Wealth Gospel says

      Michael, it’s true that a lot of firms are moving toward the salaried positions, but most of the ones I’ve seen put a pretty low ceiling on your earning potential. At the same time, though, you could get the experience you need with a little more stable salary base then move on to owning your own practice once you’re ready.

      Jeff Rose over at Good Financial Cents does a great job at using his skills to monetize his blog, and I’m sure he’s gotten a handful of solid clients who knew him as a blogger first. It’s definitely a great way to leverage your skills!

  2. Broke Millennial says

    Oh, yummy — a crap sandwich!

    The economy certainly isn’t the only factor going into the equation with a stable job (as you mentioned) — insurance is a big one. At least for me. With the insane costs of buying my own insurance, I’m far more likely to stay in a sucky job just for the great health insurance.

    I loved your reference to calling up random people you haven’t spoken with in years. My boyfriend is currently getting multiple calls a week from a kid we both knew from college. He is an insurance sales man now, and even though my boyfriend a) already has life insurance and b) has told this kid no multiple times, the phone still continues to ring. These types of jobs just remind me of watching the Pursuit of Happyness. Certainly a system designed to weed out the weak very early on!

    • Ben @ The Wealth Gospel says

      Yep. I actually heard on a podcast the other day that you should never get a job with benefits because they keep you just content enough to keep you there, and before you know it, you’ve been at the same job for far too long.

      Yeah, I definitely had a couple of awkward experiences with calling people I hadn’t talked to in a while, although they were generally people I actually had a good relationship with back then, and I would always respect “No” as a response. I imagine that old “friend” of your boyfriend won’t last much longer.

  3. Ryan @ Impersonal Finance says

    That’s nuts. It also seems very similar to being an insurance broker. There’s good money, but it’s hard to get to and can dry up quickly. I have a friend who works on commission only, and because he can have good months and bad months (sometimes very bad), he still lives with his parents, close to 30 years old. It’s a rough life. I love helping people, but I don’t think the commission only job is one for me.

    • Ben @ The Wealth Gospel says

      It’s definitely not for the faint of heart! Most people end up quitting rather than the firm letting them go. If I were still living with my parents at that point, I’d definitely be questioning if it’s the right career for me.

  4. The First Million is the Hardest says

    I interviewed with a few financial planning firms straight out of college. I had thought it was a career I really wanted to pursue, even influencing my decision to major in finance. However once I started interviewing I realized that A) the companies didn’t care about anything other than my network and B) I really hated sales.

    It’s definitely a great career if you can hack it, and part of me wishes I gave it a shot. But it’s definitely hard to get established in as I’ve seen several friends wash out after only a few years.

    • Michael Kitces says

      Unfortunately, that’s not how all firms are. Generally that’s just the larger firms that simply run recruiting as a numbers game themselves, pulling in as many recruits as they can, milking their networks, seeing who sticks, and letting the others “wash out.”

      Sadly, that still happens WAY too often in our industry, but worth noting that’s NOT the only path for becoming a financial planner today…
      - Michael

    • Ben @ The Wealth Gospel says

      It is unfortunate that there are so many firms out there like that. I was lucky enough to work for a firm that cared more about me than my contacts. If it had been the other way around, I would’ve walked out the door immediately.

      If you’re single and your expenses are low, it might be a good idea to try it out. Once you are married and have kids, it makes it a little harder to live with the lack of security.

  5. Joe Saul-Sehy says

    That was the difficult part for me….I knew that I was walking away from an awesome income stream in exchange for a big fat check today (when I sold my business at 41). However, I really liked being a financial advisor, but just didn’t love it. I wanted to do other things before I got too old.

    …and that’s what that big check did for me. Being a financial advisor bought me the security to now do things I enjoy much more, and that pay less money.

    • Ben @ The Wealth Gospel says

      That’s great, Joe. The career gave you the freedom to choice from a position of strength rather than desperation. It’s also nice to note that your desires changed as you got older. A lot of people make a career path choice right out of college, and then they mismanage their money to the point that when they want to do something else 20 years down the road, they can’t because they’re stuck in their financial situation.

  6. Fast Weekly says

    Great post Ben and Sam. It’s a great profession if you’re wired for it. I thought about going into money management because I loved managing my families investments since my early teens. In the end I got an engineering degree because I feared financial services would have made it very difficult to be the well-rounded guy I want to be. I still love researching investments and investing accordingly, but it’s still just for my family. I have the great track record, but a lot less money. No worries, life is good.
    -Bryan

    • Ben @ The Wealth Gospel says

      It’s all about what makes you happy. Most people who do it for the money end up with an early exit anyway. That’s pretty impressive that you were managing your family’s investments so early! From my experience there tends to be a little distrust in that department within the family. I’m interested in hearing about your experience with that.

  7. Paige says

    I’ve worked in brokerage since 1997. Veterans don’t bother to get to know the new people. Most of them don’t last. We had one guy last til lunch – he never came back.
    Financial advisors “earn” their money when the market drops.

    • Ben @ The Wealth Gospel says

      Ha very true. There were some younger guys who came in once and I never saw them again. There were also some older advisors who had been around for 30-40 years who wouldn’t give me the time of day, but luckily there were enough advisors in their first 10-15 years who were more than happy to work with my and mentor me.

      I agree that a lot of people will try to get in the game when the market drops, but I think that the really good advisors who earn the most are the ones who are in it for the long haul with their clients and have a relationship with them based on respect and trust.

  8. Jason says

    Great article, but wow, commission-only sales. I can already feel the pain.

    This sounds on par with another commission-only sales gig that I’m more familiar with, the friendly neighborhood Realtor. Last I heard, the success rate on that is in the single-digit percentage

    Thanks for sharing your experience.

    • Financial Samurai says

      Is being a successful Realtor only in the single digits as well? If so, I gotta do some more due diligence because when you earn 2.5-3% after splitting the fees with your company after selling a median $1 million home in SF, you can last for at least 6 months although somewhat spartanly.

      • Jason says

        Yes, a $1M sale is a great boost, but to get there takes a large investment of both time and money up front, including membership dues, websites, marketing, etc.

        With all of that overhead, I think most people don’t have enough reserves to wait for the first big payday.

        • JayCeezy says

          Jason, you make an excellent point about “pain”, and Sam, a $1mm sale is $25,000 to each broker in CA. Of that, $5K goes to marketing expenses. $10K to the company, and $10K to the broker who participated in the sale. That’s all, just $10,000! After making car lease payments, wardrobe/hair, rent/insurance/utilities, etc. it doesn’t last long.

          A family member had ZERO sales for four years (his wife worked a great state job with benefits) and he was just about out of the business and the only thing holding him back was he couldn’t find another job. He sold an $8 million office building in Orange County, out of nowhere. This was years ago, and not a sale since. He is just one of thousands of RE professionals in O.C., waiting for lightning to strike again, and he’s in his 40s now. I admire his guts, and know I could never do it.

      • JayCeezy says

        Sam, your figure assumes the realtor represents both buyer and seller; that happens less than 10% of the time, so you are looking at another split. The $25K fee still needs marketing expenses (web ads, print ads, MLS listing, photographer, all the stuff your tennis pal incurred) subtracted. So call it $20K after marketing, and then split it again, and you get to $10K for selling a $1mm home. Also, if a realtor “double-ends” the transaction, the standard CA fee of 5% (used to be 6% up until the ’90s) is reduced another 1/2%, for a total of 4.5%.

        The team that sold my last home sold 80 homes in one year, with an office of 5 people (3 brokers, 2 staff). By contrast, in the same market a competing realty company has 45 realtors plus 10 staff (55 total) and was involved in 72 transactions for the year. So that second company is mostly housewives and dilettantes, and it isn’t a f/t living for anyone but the two owners and staff.

        Just curious, is your tennis pal still in the business? Prices are up but sales are down, so the chaff is falling away if they have other options.

        • Financial Samurai says

          Ah yes, you are right in that the $25K needs to be split with Realtor’s employer. I don’t think it’s 50/50 though, and there’s no way the Realtor spends $5,000 in marketing expenses on a $1 million dollar home. They are a dime a dozen here (median price) and I bet the expenses are under $1,500. MLS fee, print up some flyers, send some e-mails, get jiggy. So maybe the Realtor pockets $15,000. Not great.

          My Realtor tennis pal seems to be happily playing tennis and traveling every chance he gets. I’m sure he’s still a Realtor but I haven’t inquired. THANK THE LORD I didn’t sell last year. Would be seriously kicking myself. Helps prove my point that you don’t need much to be happy, or there’s massive stealth wealth going on.

        • JayCeezy says

          FS, here is where the ‘Cognitive Egocentrism’ comes into play, with the $1mm homes that are “a dime a dozen” in SF. In the US for Oct 2013, the median price is $246K, and the mean/average price is $327K. In CA, the mean price is an RCH above $400K.

          Happy that you are happy with your decision not to sell. btw, the specifics for your sales fee charged by your Realtor tennis league pal are in the fine print of the contract, so you can be acquainted for next time you make a transaction. When the time is right, I’m sure you will share your real estate adventures! And as an old joke goes, “The secret to good Real Estate is identical to good stand up comedy. Both require a 2-drink minimum.”

  9. Micro says

    Commissions only would be a huge turn off for me. As someone who has spent their life in tech and engineering, my social skills tip on the awkward end of the scale. I don’t doubt that with a lot of work and time, I could succeed eventually in that type of career field. The issue would be the time committment would be too great and I think I would burn out before ever really making real progress. So I’ll stick to my laboratory settings and work on honing my technical expertise.

    • Ben @ The Wealth Gospel says

      You would be surprised at how many introverts are in that field. It definitely takes work to start out and build your clientele, but I met a lot of people who didn’t study finance and had no sales experience before changing to financial planning and they were able to do it. It just takes a lot of work and passion.

  10. MD says

    I had a friend in the commission only business. He was starting to do OK then had a “charge back” (not sure what that means exactly) but he lost a lot of the money he made. His wife basically had a breakdown and told him if he wanted to stay in that line, he would have to find another wife. He got another job.

    I admire people who can get through that and add value to people’s lives. I think it takes an extraordinary skill set.

    • Ben @ The Wealth Gospel says

      Ouch! A charge back is basically when you make a big sale and you get the commission for it, then the customer ends up cancelling the sale and the company reverses the commission. We called them reversals on the insurance side. I saw one guy who had over $1 million in reversals, but he also had over $2 million in commissions, so he was still doing pretty well for himself.

  11. CODRAGONJR says

    I spent nearly 6 years in the Insurance and Financial services industry. It was the hardest, yet most rewarding experience of my life. I learned a lot about myself and how I tick and what motivates me and what does not. I had mo nth I made $40 and months I made $40,000. But the stress wasn’t worth it to me anymore and I was offered a great job by one of my clients I just couldn’t pass up. I’d recommend this career to anyone who wants an unlimited income potential, but has a great support system to help weather the storms and the lows. Because the lows are LOW and the highs are HIGH. I often consider going back and the triangle analogy is probably the best I’ve ever heard.

    • Ben @ The Wealth Gospel says

      I was going to ask the same question. What was so enticing that made you want to leave? (Although not enticing enough to keep you from still thinking about going back) :) My boss showed me a $40,000 check once, and that was just from his investments for the month. It didn’t include insurance, renewals, persistency fees, etc. It’s definitely exciting to think about what you can do once you’ve “made it”.

  12. nbsdmp says

    I like the chart you have at the beginning of the article…there are so many people who are up in arms about only the “Rich get Richer”, well guess what: they are the ones willing to work hard and sacrifice to get there! yes there are outliers, but for the most part it follows the exact analogy that only a few people actually have the perseverance to make in in a tough field like financial planning. It is only 1 out of 20 who are disciplined and grounded enough to get to that wealth building end of the pyramid. Great article!

    • Financial Samurai says

      Glad you commented on the chart. I was thinking of an informative graphic to spur some conversation. I don’t know ANYTHING lucrative that’s easy to achieve at first. Do you?

      So it makes me think about how much EFFORT plays a part in everything? The drive to stick with things and never give up.

      • nssdmp says

        Yep, if it were easy everybody would be doing it! Reality is in a world that gives out 8th place ribbons, it is easier for people to say “eh, good enough” vs. busting ass to be the best. The whole (90% perspiration) is about spot on in my opinion. I love it when I get told “well you were just lucky”…I just smile and say “yes sir I was”.

  13. chris says

    Hi Ben,
    Love this article and you seem to have written it at exactly the right time for me. I recently graduated with a non-finance degree but I have decided that the career field I’m in isn’t for me and I have always been interested in financial planning but I don’t know if it is for me. I was hoping you might be able to answer a few questions for me? I have tried everything from yahoo answers to career forums but haven’t had much luck:

    1. Would I need to go back to school? I could get my MBA or I could simply take a few classes in finance etc.

    2. Is it easy to have life balance i.e. wife and kids vs work?

    3. I understand you need to work as many hours as it takes but I was wondering if you could give me a range? i.e. some weeks you might work __ hours and others you might work ___. Does it stay that way for your entire career or will it eventually get better? If so how long does it take? Is there really any time to take a vacation?

    4. Does your network need to only exist in the area around where you are physically located? For example I have a decent network but unfortunately I just moved to GA for this job and live pretty far away from that network. Is this career feasible if I have to rely on cold calls alone to people I don’t know?

    5. Is there a certain cluster of the country I would have to work in starting out? i.e. NC, NYC etc. Also, once I become an independent CFP would it be feasible to set up shop in my current location or one that is similar to my current location (Suburb about an hour outside of Atlanta)?

    6. Any other advice you have

    • Ben @ The Wealth Gospel says

      Chris, great questions! Making any career change is a difficult decision, so I wish you all the luck in the world. And I’ll answer your questions the best I can based on my experience, although I can’t guarantee that will be the same as what you experience:

      1. You could go back to school to get an MBA to give you a better background, but my mentor graduated with a history/philosophy major and slowly made his way over to financial planning. His strength was in his ability to interact with people genuinely and work ethic. The financial knowledge will come as you study to pass the various licensing exams and as you work with other advisors.

      2. At first, having a work/life balance can be hard. Your wife will have to brace herself because you’ll probably be working a lot for the first five or so years. But if you’re successful, you can get to the point where you have total control over your schedule and can be there for your family when you feel the need (or want).

      3. When I started, I was working around 55-60 hours a week, but I could have chosen to work more or less. That’s the thing about it. Everyone’s different, and you can choose what you will and won’t do. I knew a veteran who only worked one night a week past 6 p.m. and he did well. I worked with a lot of younger people so I found myself working most nights. And when it lets up depends on how successful you are. It may take you a few years, but you could also be a rockstar and get there sooner. And as far as the vacations, I took vacations because I love to travel and I didn’t want my job to restrict me. But it definitely hurt my business when I was away for a week and came back to nothing.

      4. Nah, you can do appointments over the phone. I knew a guy who grew up in California and he did most of his business over the phone with people there. For me personally, I have a strong aversion to cold calls, so I didn’t want to do it. But there have been some people who have built everything from scratch with cold calls. They say it puts hair on your chest :)

      5. Many of the big firms have locations all over, so you could probably start where you live now, and then when you set up your own shop, you’ll probably know by then where would be the best market to do it.

      6. If it’s something you’re passionate about, don’t let your fear of failure kill it. Worst case scenario: you try it out, don’t do well, have to go back to the corporate world, and you learn a lot more about how to manage your own financial plan. Or you could be like me and start a blog ;)

  14. chris says

    One last thing:

    I have read that a lot of evenings and weekends are involved dealing with clients. Could you elaborate on what this means? Is it making cold calls at night? Meeting with them or calling them about their portfolio? Schmoozing? Networking?

    Is it all day everyday?

    What this comes down to is that while I don’t have kids yet and I am only recently married; I don’t want to be one of those dads/husbands who wasn’t there because he was off living his passion.

    I understand I might not make it to every game/practice and I might not always be home for dinner. However, is there opportunity there to still have a life outside work on occasion? Maybe take the family on a vacation etc.

    • Ben @ The Wealth Gospel says

      For me it was mostly meeting with clients and potential clients. I personally never did cold calls, all my calls were referrals, but I made a lot of those at night. And it’s definitely good to throw some networking and schmoozing in there too :) And like I said above, the great thing about it is that you get to choose your schedule. If you can manage your time well enough and work your butt off, you should be able to find the time to spend with your family.

  15. krantcents says

    You described most commission jobs, just change the title. It takes a lot to get through the early years of no income, but the payoff is there if you like what you doing. Similar professions would be stock broker, insurance and real estate. When I was investing i income property, I thought about becoming a real estate broker. I decided against it because I do not enjoy the sales process.

    • Ben @ The Wealth Gospel says

      Agreed! The sales process is definitely something I don’t miss. If I didn’t have the passion for helping people get their finances in order, I probably wouldn’t have lasted a week because of how much I hated selling.

  16. Matt says

    Ben, I have long considered financial planning as a great second career but I wonder if you could address another factor, that may also have a role.

    I am in a technical field, but I do have an MBA. I am working informally with friends and family, helping them weather the last few extraordinary years. I have talked with several people who have made the switch to financial planning as an encore, and they seem to confirm these beliefs:

    1 – informal networks (actually talking about finances, not just contacts) jump-start a practice
    2 – as an encore career, you may be in a financial position that you don’t need to grow income: you can do part-time if you want, or keep going. (tune it to your level of commitment)
    3 – the real question: that age is a plus here. In effect, you trust an older adviser more than a younger one, because you assume that they have a level of experience. This is exactly opposite of technical fields. Although I have not experienced any kind of ageism myself, I do see it regularly applied to others. There is a poetic aspect to turning a problem in the current situation into a strength.

    In your experience, do you see this as true?

    • Ben @ The Wealth Gospel says

      Hi Matt,

      It’s definitely true that age is a plus. Now is a great time to get in the industry because baby boomers are either retiring or about to retire, and they’ll need a lot of help knowing how to keep those investments going and plan distributions, and you better believe they don’t want some 25-year old kid doing that for them.

      And yes you can use it as a part-time thing, but I know that a lot of firms will have minimums that they expect you to meet, so you would either have to find one that would allow you to do that without complying with the minimums or just start out the first few years working full-time and then slow down.

      Informal networks are great because you usually have a relationship with those people that can easily be turned into a professional relationship. With that, though, you’ll need to make sure to work with other advisors who have more experience, because your friends and family trust you, but they know you’re new. So having another advisor acting as a mentor can give them peace of mind.

      Let me know if you have any other questions! And good luck if you end up deciding to do it!

    • Ben @ The Wealth Gospel says

      Matt, sorry for some reason my reply from yesterday didn’t show up. Yes, informal networks are great because you already have a somewhat professional relationship there, although it’s important that you work with a more experienced advisor at first, otherwise it can be hard for someone who knows you’re new to trust you.

      As far as doing it part-time as a sort of encore career, I know that some companies have minimums they expect you to meet sales wise, so it’s usually best to start out full-time and build your clientele. Eventually you get to the point where you can choose to keep doing it full bore or to pull back and spend more time with the family.

      And yes, age is definitely a plus. I had a hard time working with older people because of that, and the biggest market right now is the baby boomer generation since they are retiring or retiring soon.

      I wish you luck in your decision!

  17. Evan says

    I am actually in the field myself (back office support type role). Fair recap Ben. I think one thing that was missed was the freedom the job has. Like mentioned above you could probably replace the title with any commission based job, but most offices don’t care how you spend your day as long as you are producing…fantastic freedom!

  18. Andrew Wang says

    Ryan @ Impersonal Finance :
    That’s nuts. It also seems very similar to being an insurance broker.

    This shouldn’t be too surprising as the origin of financial planning can be traced back to the insurance industry. How ingenious to have devised a process requiring the prospective client to describe his/her financial position in detail! Not only could the insurance salesperson quickly figure out what insurance to offer, but it opened up additional opportunities like selling annuities and mutual funds.

  19. Eric Shun says

    “First prize is a Cadillac Eldorado…Second prize is a set of steak knives…Third prize is you’re fired.”

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