Financial Advisor Anyone?

N.VanCandidate Wrote:
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> They get paid very well as they get a
> base + commission on their territory sales.
N. Vancandidate do you have a ballpark figure on their total comp? I’ve felt it too taboo to ask any of our reps. I’ve thought about taking this path a bit myself..
 
So I’m a recent graduate that had his heart set on corporate finance or portfolio management, but I have a possible job lead with a BB PWM team dealing mostly with high net worth and ultra high net worth clients in a large(ish) city (not LA, or NYC), located in a rather affluent neighborhood (akin to MY state’s Hamptons, or Greenwich).
Now, I vowed to stay as far away from the “financial advisor” position as possible, but right now with the economy, this may not be a half bad option.
Let’s say I was able to land a position at this place; what sort of work as an entry level hire would I be doing? Would it be more analytical or pure sales? What kind of salary, exit opps? Would this be a worthwhile job considering the team’s reputation and location? or would I just be another advisor trying to hawk insurance to my relatives? (my greatest fear in life)
Any kind of insight in what it’s like to work for a ultra high net worth PWM office would be appreciated.
 
dub Wrote:
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> N.VanCandidate Wrote:
> ————————————————–
> —–
> > They get paid very well as they get a
> > base + commission on their territory sales.
>
> N. Vancandidate do you have a ballpark figure on
> their total comp? I’ve felt it too taboo to ask
> any of our reps. I’ve thought about taking this
> path a bit myself..
Dub
It really varies on location, size of the company and the territory and your credentials. Total comp can be anywhere from $80k to $350k…very wide range…I would say most would fall around high 100’s to mid 200’s.
typically base is between 60-90k.
 
Hmm, as the days go by from my original post/question I am seeing some really different opinions on the FA career path. Good stuff to think about. n.vancandidate thanks for the offer. I will shoot you an e-mail with some questions.
@dub
>>if you aren’t that great with people and are not great at teaching, becoming and adviser is probably not the thing to do. Another indicator may be how much you enjoyed the behavioral finance section, because you’ll be training your clients on a lot of that stuff to make things easier for you down the road.
Those are all things I really like and what makes FA an interesting career path for me. I really enjoy talking to people and advising friends and neighbors, informally, on how to manage their investments.
>>You definitely want to find a good firm, one where you don’t have to cold call that also has high average client net worth would probably be ideal.
Do they expect you to already know high net worth prospects? If you don’t cold call and you don’t know any HNW prospects, how will you build a book?
One of my main concerns about the FA role is the risk early on. I have a family and all the expenses that come with it. I have an MBA from a respected school, work at a major bank and get paid well (nothing extravagant, base+bonus < 150K). It would be a big risk to give up my current gig and go join a WM firm full-time in hopes that my book would grow large enough and fast enough so that I won’t end up taking a 50% pay cut the first year or two. Even if you bust your butt, there are no guarantees you make it the first few years. Any advice on that side?
The wholesaler role also sounds interesting. The travel may be a problem for me though with the family and all. How does one even get their foot in the door for these types of positions?
Also, what is a reasonable number of clients a firm should expect an FA to manage? I’m assuming it depends of if you’re working for a Goldman or a Edward Jones (I know, polar opposites), with Goldman not wanting you to manage more than, I’m guessing here, 40 clients and EJ wanting your north of 200. If you can’t get into a Goldman, what’s the right number? And who are the better firms?
 
crablegs Wrote:
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> I have been an FA for now 10yrs with ML (now BAC).
> As much as I hate to admit it, all of the above is
> true…. FA’s are not perceived as anything else
> than sales people. You can sell shoes, stocks,
> fancy yachts…. at the end you are in sales and
> most people I meet put a hand on their wallets
> when I tell them I am an FA.
>
> I do have both the CFP and thank God more recently
> got my CFA. The CFP is somewhat useful and
> somewhat recognized by the retail world. CFA is
> not but it was for me a fantastic journey of
> learning & personal development.
>
> Now that I got the nasty part out of the way….
> let me rub in the good ones!!! I am a very average
> FA doing about 600K in production and retaining
> about 40% of it. I bring home about $280K/yr
> counting the other incentive the firm is throwing
> at you. I am in the office usually at 7.00 am and
> home by noon at the latest. I usually never work
> more than 4 days out of the week and my life is
> very low stress. Most clients are in solid managed
> products (that you smart asses are managing!) and
> have an assistant at the office that contact me if
> there is anything important (which is never). This
> has been my lfie for the past 5 yrs (worked
> slightly more the first 5).
crablegs,
How many clients do you manage? How much did you make your first two years in the business? How did you land your clients early on? Cold calling?
Also, how long did you have to study for the CFP exam?
 
I think its worth noting that typical FA firms have a retention rate around 10%. So yes the one’s that make it do well, but the odds are highly against you. If you have a network of high net-worth investors then most of the leg work is already done. Otherwise you will be hitting the phones and hopping you get lucky.
 
I’m also an FA in a PWM firm. I’ve looked into getting CFP done after CFA…..I believe, and you might want to verify, that the class requirements are waived for CFP if you have your CFA charter already, which is HUGE. I have heard the classroom requirements are pretty lengthy/time consuming and being able to bypass that would be huge. Plus, as noted above, the actual investment stuff in CFP is a walk in the park if you’ve been through the CFA program. Having CFA, CFP in a PWM setting I think is tremendous.
 
cfafa Wrote:
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> I’m also an FA in a PWM firm. I’ve looked into
> getting CFP done after CFA…..I believe, and you
> might want to verify, that the class requirements
> are waived for CFP if you have your CFA charter
> already, which is HUGE.
This is true.
I have heard the
> classroom requirements are pretty lengthy/time
> consuming and being able to bypass that would be
> huge. Plus, as noted above, the actual investment
> stuff in CFP is a walk in the park if you’ve been
> through the CFA program. Having CFA, CFP in a PWM
> setting I think is tremendous.
The investment section will be extremely easy compared to the CFA.
I have both the CFA and CFP, though I got the CFP first.
 
dub Wrote:
——————————————————-
> N.VanCandidate Wrote:
> ————————————————–
> —–
> > They get paid very well as they get a
> > base + commission on their territory sales.
>
> N. Vancandidate do you have a ballpark figure on
> their total comp? I’ve felt it too taboo to ask
> any of our reps. I’ve thought about taking this
> path a bit myself..
I work with two that wholesale money funds and I get the impression that they make about 100k base and about 1 bps on total growth in their market. He didnt say exactly but my math put him at about 400k in a good year but around 100k in a bad year.
 
Regarding how to build a book these days is 100% differrent from even 15yrs ago. Today they realize that you can’t put a young guy on the phone doing some cold calling, it simply doesn’t work (especially given calling restrictions!). the typical path is usually the same one I had. They team you up with a senior guy or big producing team. You do their dirty laundry for about 3-4 yrs (and I literrally mean dirty laundry….). Over those years they will shed the smaller accounts they don’t want to deal with or the ones with problems over to you. This will give you a ‘base book’ which you will start building on, networking with exisiting relationship. Some of those clients who were a horrible match for them turn out to be great clients for you and consolidate more assets….. etc
So the first 3-4 yrs were definitely ‘hard work’. Nothing compared to IBK hours or anything like that, but definitely more than what I am doing now. How much did I make the first 2 yrs…. I am not sure you want to know….. $36K… no joke! But again, looking back, it was all worth it.
Regarding the CFP, yes having a CFA will waive all the prerequisite and you can directly sit for the board exam which will involve about 2-3 mths of studying. It is not even comparable in terms of difficulty with the CFA. What makes it a little tough is how borring & dry the material is (taxes, estate planning…. etc). At least the CFA curriculum was somewhat interresting to me.
There is one thing I do want to add. I am unfortunately afraid that my bubble world will burst in let’s say about 5yrs. The Wall Street model of over-compensated under-educated brokers is about to disapear now that we are all owned by banks. I am convinced that in 5yrs from now I will be sitting in the back of a retail branch, wearing a red polo and offering cheap stuff for opening a new account. There is no way they can pay us what they do but pay those guys some $50K/yr. Can’t last forever, but I will be able to tell my kids I did have the best 5yrs of my life!
 
I think you guys are confusing a pavement pounding FA with a senior advisor in PWM. The success rate of an entry level FA is very low. They are typically BA/BS grads with little work history or credentials that are given an opportunity to pound the pavement and smile and dial to build a book. They prospect small business, mass market, typically 10MM and below.
There are also senior advisors/account managers in PWM that are hired to provide more complicated services to existing clients. The FAs that are covering the mass market don’t have the expertise/knowledge to handle UHNW/HNW. In this case your responsibility is to manage existing relationships of the firm and generate more revenue. For instance, cross selling the firm as corporate trustee, estate planning, etc.
These positions are MBA/CFP experience driven and would have a nice base salary and less expectation to prospect.
 
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