Has anybody here worked in the Financial Advisory Business?

[Fearchar]

Curious to know if anybody on this board has been (or is currently) working in the Financial Advisory Business?

The reason is that I occasionally come across material from the larger firms where they ask if you are a professional.
The implication being that they are not interested in individual investors.

At the same time, it's occurred to me that I could probably fulfill the role of an investment advisor.
In fact, I'm sure a good number of individuals on this board could do the job if they wanted to.

However, I'm not sure that I really want to do, so curious to learn from somebody that is or has been in the business.
I can almost envision myself doing so on a part time basis.
It might make sense (especially if I wasn't already working).
I have no license in the area and not too sure what would be the minimum.

 So, please feel free to share the pros and cons.

[steelpony10]

Fearchar ,

          If you advise I would think your parent company would ask you to push certain products, the ones they’re being paid to push. I know one financial advisor that lives in a gated community just by collecting very small maintenance fees from many accounts. That would be the 1 cent over your perfect pump each time you fill up with gas business model.

          Seriously there is a definite need for a place where sheep can be sheared. Fischer Investments only wants you if you hold over 500k. Most retirees don’t have squat so they use banks and consult with experienced 30 year olds in the corner office where the plants are. They like Megan. Tough to pry them away. They’re bonded to an authority figure.

           Pros, many clients means easy money in incremental amounts when times are good, 7/10. Cons their portfolio value declined tremendously this year and it’s your fault so they are going to dump you first chance they get because you don’t know what you’re doing, 3/10. How strong are your people skills? You’re now using the sales model.

            

           

[Fearchar]

Thanks steelpony10 ,

A key decision if I should pursue becoming an Independent Advisor.
So, a parent company may not be a factor.

On the other hand, who would ever be interested in somebody like that and how many mistakes would I probably end of making?

I noticed that Schwab has an affiliate program of some sort.
Started filling out the application form to learn more and it asked what I was:

RIA
IBD Advisor
Bank Advisor
Wirehouse Advisor

None of the above wasn't a choice, but that's me.

Somebody on the internet has a business setting people up as RIAs.
It's $6K initially and $4K/year after that.
However, my impression is that the forms aren't really that difficult to fill out, especially for somebody without clients.

[steelpony10]

Fearchar ,

         Maybe I have this mixed up then if you’re speaking of a CFA. I thought there was a certification, a series of rigorous testing, you had to go through to be certified as a financial advisor. I believe there should be a national organization that oversees that testing much like a certified accountant, a CPA. It takes a big time commitment and it’s not an easy process. I’d start with that organization if that’s what your looking for.

          www.napfa.org

[Fearchar]

steelpony10,

Indeed, it would be a challenge to gain CFA certification. 

However, as I understand it, to register as an RIA, only the series 65 exam is required.
Typically, that takes about 50-60 hours of study for most people to pass.
Exam fee is ~$187.

After that, there is additional paperwork with the state.
It's only if you have a serious AUM, that federal registration is required.

[steadyeddy]

Fearchar, might I ask what the motivation is for you to consider this path? You would not offend me if you choose not to respond.

[steelpony10]

Fearchar ,

       I’m not any help to you, you’re teaching me. Ha. Ha. Hopefully you’ll get better responses from others.

[richardsok]

Heck, I can barely manage my own affairs. The thought of advising others terrifies. But good luck with it, fearless. A new year is an auspicious time to reach for new goals. That said, my impression of investment advisors who peddle mutual funds for some big bank is not that favorable. With my one, and brief, contact with this sort, it didn't seem they had much training or abilities at all. Pony seems correct; that they were being tasked merely to push certain products. My understanding of Merrill Lynch brokers is that they are quite sophisticated but they MUST promptly bring in $X worth of accounts, or adios.

If you do wind up on some Alpha Team with better information access, I hope you won't forget your old friends on BB.

[Fearchar]

steadyeddy ,  Primarily curiosity right now as I have not made a decision.   

Would like to learn a bit more; pros vs cons.

Entirely possible that I won't do this after all or have a meager AUM outside of the family.
However, my impression is that it's not an especially difficult job.
Especially since it would be just a retirement gig.

Hoping somebody on this board has applicable experience.... 

[richardsok]

You might want to start out here ------


www.youtube.com/watch?v=d8m4LUC5h5Y

www.youtube.com/watch?v=LBq9qQZbc4w

[retiredat48]

I'm in the financial advisory business...pro bono...for free. Past 15 years.

And at times I have been invited to give presentations to financial firms, such as (my post) introducing Pyramid Up Investing to this firm:

-------------------------------

Would like to share an interesting recent occurrence.

In May I received a PM from a small Asset Management/Advisory Firm located near Valley Forge, PA. Their specialty is the large cap USA stock market space. They invited me to a Q & A session regarding some of my postings. They would request all staff members read the postingsလFirst Time Posters IRA @ $1,000,000: Shares Lessons Learned; postings on The Pyramid Up Buying Technique, and selected posts regarding momentum enhanced investing.

During my transition from Florida to Saratoga, NY I visited, and received cordial treatment in a conference room by the owner and all staff members. I made a presentation; including sharing contrary Boglehead philosophy regarding active management and the potential drag the fees/costs can have on performance. They understood these positions. A good question and answer period followed.

--------------------------------------



Fearchar ,...why work for money? Give some thought to advising/teaching various group in the community where you live. Minorities? Poor people?  YMCA type courses?...inviting all...at no cost.

And if you want to teach the very bottom of the financial prowess folks, keep posting to us on this forum.

BTW I have guided a person who went from Navy Nuclear Submarine Officer...to getting  formal CFP credentials, and now is a chief financial wealth manager at a firm.  He would be glad to have a phone conversation with you if you like.  Send me a PM.

Best...

R48

[Deleted]

One needs a financial firm sponsor and relevant commercial type of courses to sit for the series of exams required to be licensed. I passed the mutual fund, annuity, and health care series decades ago, as my spouse was active in the business part-time. I am not a gregarious person which it likely takes to be successful in sales.

[liftlock]

Dec 24, 2022 14:05:25 GMT Fearchar said:

steadyeddy ,  Primarily curiosity right now as I have not made a decision.   

Would like to learn a bit more; pros vs cons.

Entirely possible that I won't do this after all or have a meager AUM outside of the family.
However, my impression is that it's not an especially difficult job.
Especially since it would be just a retirement gig.

Hoping somebody on this board has applicable experience.... 

I have never been a financial advisor.  When I first retired, my spouse encouraged me to hire one which I dd.  After several years, I expressed my dis-satisfaction to my well credentialed advisor about his poor performance and downside protection for some of the stock positions my account was invested in.  My advisor's response was that the dirty secret of the financial advisor business is that they do not outperform the market.  They simply help people stay invested when the market declines and clients want to exit their positions.   I was told that studies show that financial advisors help their clients beat other investors by 4% points who sell their investments after the horse has left the barn.   So if you want to be a financial advisor it appears that one of the most important qualities is to be a good shrink and help prevent clients from doing things that are not in their best interests.

[FD1000]

Dec 24, 2022 15:48:07 GMT @haven said:

One needs a financial firm sponsor and relevant commercial type of courses to sit for the series of exams required to be licensed. I passed the mutual fund, annuity, and health care series decades ago, as my spouse was active in the business part-time. I am not a gregarious person which it likely takes to be successful in sales.

After 25 years in IT, I wanted to change my career.  I have done the above tests in just 3 months, many years ago.  My friend sponsored me and my agreement was to be behind the seen managing portfolios for others using my expertise and never push any product I don't believe in.
First day on the job, my friend tells me I must bring in (be a sales guy) friends, push insurance products, never work with any client by the hour, only clients that agree to LT and annual fees.  I left within an hour and found the next IT job.  I always had allergy to FA(financial advisors).  After that day I despised them.   Over the years I met many of them, to pick up their brain but didn't find much.
These courses taught me absolutely nothing.  They repeat the followings: put your clients interest first + rules to follow so you don't mess up.  In reality, a FA can't put his clients first. A good FA can analyze a client needs in 2-3 hours and can recommend what to do for years to come. Changes should be make only when client circumstances change. Offer mostly indexes and low ER funds (think Vanguard). If the FA would do that, he will starve.
A FA is "Jack of all trades, master of none". If you need real help with taxes, you should see a CPA.  If you need legal advice (think trusts), you need an attorney.  Both usually charge by the hour one time.  Both spent years getting their degrees and master their skills. Why a FA who studied several months should advice anybody? is beyond me. Sure, there are good FA, but the majority are sales man that don't add a lot of value.  Catch 22: if a client knowledge is below average, he doesn't know if his FA is good, when he is above average, he doesn't need a FA.  Rich people need a dedicated team of experts and that's what they do.

So, I turned my energy to the world and joined several sites.  I used to manage several portfolio online (cons, moderate, aggressive) for years for posters to see.  I got hundreds of PM asking me for help and I did it all for free, from small questions to a whole portfolio. It was too much work.  Then, the trolls showed up...and that's why I stopped.
I still answer PM if the question is not about what to trade now.