CPA to EJ?
As the title states, I am a CPA with about 3 years in at a large public accounting firm and looking into moving into a financial advisor career. My main question is why do so many people fail?? I have spent the better part of today reading through these forums and have seen terrible statistics, but at the same time see many posters that say if you do the work and make the 25 contacts per day then you will make it. So are the people that fail not going out and making the contacts?? I’m just a bit confused, and now starting to doubt whether I should take this risk. I by no means love my job as a tax accountant, but it does provide a nearly no risk path to making six figures in the next few years.
Any insight would be greatly appreciated! Right now I am down to the final face to face interview, and am hoping that this is the opportunity to start "my own" business that I have been looking for! Also, if anyone else has made the move from acccounting I would be interested to hear from you. I am not afraid of hard work, as I am regularly working crazy hours right now. I am just looking for something with a bit more people interaction, and a whole lot less staring at a computer screen! Thanks in advance! jYou have to have the ability to ignore rejection. Working hard isn’t the issue. It’s working hard at PROSPECTING.
[quote=82391]As the title states, I am a CPA with about 3 years in at a large public accounting firm and looking into moving into a financial advisor career. My main question is why do so many people fail?? I have spent the better part of today reading through these forums and have seen terrible statistics, but at the same time see many posters that say if you do the work and make the 25 contacts per day then you will make it. So are the people that fail not going out and making the contacts?? I’m just a bit confused, and now starting to doubt whether I should take this risk. I by no means love my job as a tax accountant, but it does provide a nearly no risk path to making six figures in the next few years.
Any insight would be greatly appreciated! Right now I am down to the final face to face interview, and am hoping that this is the opportunity to start "my own" business that I have been looking for! Also, if anyone else has made the move from acccounting I would be interested to hear from you. I am not afraid of hard work, as I am regularly working crazy hours right now. I am just looking for something with a bit more people interaction, and a whole lot less staring at a computer screen! Thanks in advance! j[/quote] Working long hours and prospecting are two different things.. 25-40 contacts a day should be sufficient as long as they are qualified. But you can only do it a couple of ways. 1. Call/Door kncok 2. Network 3. Seminars 4. Mailing 5. Buy a book But the last 3 will cost you $$$ to get it going...Thanks for the quick replies! Yes, I understand the methods required in order to build the business, but the way I am looking at it is that I will work as long as it takes in order to get as many clients as possible (at the minimum getting the 25 contacts a day). So does the problem arise from people not being able to realistically get that many contacts, or just not putting in the long days in order to do so. And Moraen, are you saying that people quit because they can’t handle the rejection on a daily basis? Just wondering if both of you could dig a little deeper into your answers to help me out.
Thanks again! jThe problem is hard to explain(or else the training programs would be better).
First problem is the prospecting. Everyone know you have to talk to 25-40 people each day to be successful. So since there are only 3 ways to do that, call, walk, network(not sure if you could everyday). Then the business should be easy. But the following happens: 1. Can't handle rejection(so they cut down on prospecting) 2. The Daily grind(doing it everyday for 3-5 years...Read 500 day war post) 3. Income... If you could produce $100K gross production for the year at EDJ, so lets assume 3% comm on products(cross between funds,bonds,stocks,vas).. That is $3.3MM in new assets for that type of production or around $300k/month. So you gross $100K, but your take home is $40K(assuming 40% payout at Jones). Some people find that it isn't worth the effort to make a lousy $40K. The second problem is part of the first... It's hard to get 25-40 QUALIFIED contacts in a day..I had this all in my head because I was explainng it to the new guy I hired, because he is sucking…
Think its easier to do indy because payout higher, some more comm on certain products(EIA, Private REIT, VAs)[quote=Squash1]
...3. Seminars 4. Mailing 5. Buy a book But the last 3 will cost you $$$ to get it going... [/quote] Fixed. At Jones, he will receive up to 75% of the cost of his seminars (to a total value of $300) to run seminars until he gets to Seg 3, I believe. Presumably, he could meet weekly with fourgreat prospects, take them out to a nice dinner or lunch, and pay only for his own meal. Obviously, they'd have to be different prospects weekly.I am pretty sure you can only use the seminar rebate once a year(used to be at EDJ)... Plus I meant big seminars, 5000 mailings, 30 dinners, $1000 just for dinner type..
[quote=Squash1]
The problem is hard to explain(or else the training programs would be better).
First problem is the prospecting. Everyone know you have to talk to 25-40 people each day to be successful. So since there are only 3 ways to do that, call, walk, network(not sure if you could everyday). Then the business should be easy. But the following happens: 1. Can't handle rejection(so they cut down on prospecting) 2. The Daily grind(doing it everyday for 3-5 years...Read 500 day war post) 3. Income... If you could produce $100K gross production for the year at EDJ, so lets assume 3% comm on products(cross between funds,bonds,stocks,vas).. That is $3.3MM in new assets for that type of production or around $300k/month. So you gross $100K, but your take home is $40K(assuming 40% payout at Jones). Some people find that it isn't worth the effort to make a lousy $40K. The second problem is part of the first... It's hard to get 25-40 QUALIFIED contacts in a day..[/quote] Thanks for elaborating, this is very helpful. I suppose if you look at it that way, and are only making 40k, then no it certainly would not be worth it to me. But the reason I am considering the switch is the longer term lifestyle. I by no means would have to make 6 figures in the first year, but would definitely make that an intermediate goal of say 4-6 years out, while hopefully obtaining a very flexible lifestyle by that point. Do you consider these reasonable expectations? Of course everyone that I have talked to through the hiring process says yes, but how about an unbiased opinion? I'm sure that I can't even imagine how hard the first few years will be until I am in the situation, but I am not the type that will quit if I know I am working towards the ultimate goal. I'm assuming those are estimated first year numbers, correct? If so, you would think you would only build upon that base in the future and have an even greater earnings potential each year. Am I still not looking at this correctly? I am just having a hard time understanding the over 50% first year failure rates that I am seeing.Ok, let me start by prefacing my post in stating that EDJ is a fine firm. Many make a very nice living there and enjoy the culture. However, let me be clear in stating it is NOT YOUR BUSINESS. Forget about what they are telling you, forget about the propaganda they send, you have a short string of rough months and they will yank you out of your office faster than you can say “If you have the money available…”.
I speak from experiece, I was there for just over a year and a half and didnt cut the mustard. As I said for some it can be great, fine company, BUT NOT YOUR BUSINESS. I have now moved on and to be honest I am thankful for their getting me started in the industry. If I were you I would look into possible indy opportunities (boutique/RIA, or larger financial planning prictice; if you fell confident in tax considerations related to estate planning services) where you could utilize both skillsets and receive a higher payout. Good luck, DC[quote=82391] [quote=Squash1]
The problem is hard to explain(or else the training programs would be better).
First problem is the prospecting. Everyone know you have to talk to 25-40 people each day to be successful.
So since there are only 3 ways to do that, call, walk, network(not sure if you could everyday). Then the business should be easy. But the following happens:
1. Can’t handle rejection(so they cut down on prospecting)
2. The Daily grind(doing it everyday for 3-5 years…Read 500 day war post)
3. Income… If you could produce $100K gross production for the year at EDJ, so lets assume 3% comm on products(cross between funds,bonds,stocks,vas)… That is $3.3MM in new assets for that type of production or around $300k/month. So you gross $100K, but your take home is $40K(assuming 40% payout at Jones). Some people find that it isn’t worth the effort to make a lousy $40K.
The second problem is part of the first… It’s hard to get 25-40 QUALIFIED contacts in a day…[/quote]
Thanks for elaborating, this is very helpful. I suppose if you look at it that way, and are only making 40k, then no it certainly would not be worth it to me. But the reason I am considering the switch is the longer term lifestyle. I by no means would have to make 6 figures in the first year, but would definitely make that an intermediate goal of say 4-6 years out, while hopefully obtaining a very flexible lifestyle by that point. Do you consider these reasonable expectations? Of course everyone that I have talked to through the hiring process says yes, but how about an unbiased opinion?
I’m sure that I can’t even imagine how hard the first few years will be until I am in the situation, but I am not the type that will quit if I know I am working towards the ultimate goal. I’m assuming those are estimated first year numbers, correct? If so, you would think you would only build upon that base in the future and have an even greater earnings potential each year. Am I still not looking at this correctly? I am just having a hard time understanding the over 50% first year failure rates that I am seeing.[/quote]
100k 4-6 years in is a very reasonable expectation if you happen to fall in that 10-20% that “make it” in this business.
[quote=82391]As the title states, I am a CPA with about 3 years in at a large public accounting firm and looking into moving into a financial advisor career. My main question is why do so many people fail?? I have spent the better part of today reading through these forums and have seen terrible statistics, but at the same time see many posters that say if you do the work and make the 25 contacts per day then you will make it. So are the people that fail not going out and making the contacts?? I’m just a bit confused, and now starting to doubt whether I should take this risk. I by no means love my job as a tax accountant, but it does provide a nearly no risk path to making six figures in the next few years.
Any insight would be greatly appreciated! Right now I am down to the final face to face interview, and am hoping that this is the opportunity to start "my own" business that I have been looking for! Also, if anyone else has made the move from acccounting I would be interested to hear from you. I am not afraid of hard work, as I am regularly working crazy hours right now. I am just looking for something with a bit more people interaction, and a whole lot less staring at a computer screen! Thanks in advance! j[/quote] This business is very simply, but it's not easy. If you are willing to do what needs to be done on a daily basis, you can't fail. Very few people are willing to do what needs to be done.[quote=82391][quote=Squash1]
The problem is hard to explain(or else the training programs would be better).
First problem is the prospecting. Everyone know you have to talk to 25-40 people each day to be successful. So since there are only 3 ways to do that, call, walk, network(not sure if you could everyday). Then the business should be easy. But the following happens: 1. Can't handle rejection(so they cut down on prospecting) 2. The Daily grind(doing it everyday for 3-5 years...Read 500 day war post) 3. Income... If you could produce $100K gross production for the year at EDJ, so lets assume 3% comm on products(cross between funds,bonds,stocks,vas).. That is $3.3MM in new assets for that type of production or around $300k/month. So you gross $100K, but your take home is $40K(assuming 40% payout at Jones). Some people find that it isn't worth the effort to make a lousy $40K. The second problem is part of the first... It's hard to get 25-40 QUALIFIED contacts in a day..[/quote] Thanks for elaborating, this is very helpful. I suppose if you look at it that way, and are only making 40k, then no it certainly would not be worth it to me. But the reason I am considering the switch is the longer term lifestyle. I by no means would have to make 6 figures in the first year, but would definitely make that an intermediate goal of say 4-6 years out, while hopefully obtaining a very flexible lifestyle by that point. Do you consider these reasonable expectations? Of course everyone that I have talked to through the hiring process says yes, but how about an unbiased opinion? I'm sure that I can't even imagine how hard the first few years will be until I am in the situation, but I am not the type that will quit if I know I am working towards the ultimate goal. I'm assuming those are estimated first year numbers, correct? If so, you would think you would only build upon that base in the future and have an even greater earnings potential each year. Am I still not looking at this correctly? I am just having a hard time understanding the over 50% first year failure rates that I am seeing.[/quote] Here is how we explain 50-60% failure rates.... How do you plan to prospect?(I will await your response)I'm 6 months in and the hardest part for me so far has been the rejection. You're a fully licensed PROFESSIONAL who repeatedly gets doors slammed, phones hung up, or downright rude things done to you on a daily basis from people who know FAR LESS about investing/finances than you.
No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, yes Mon-Thurs you don't make a dime, and you're working your ass off the entire time, and finally on Friday you hit. A few months in and you start to consider keeping your license and desk job, but moving professions. Like a broker to an analyst. And you'll get paid more from the start. However 3-4 years in you'll pass the analyst and make more money doing less work.[quote=gethardgetraw]
I'm 6 months in and the hardest part for me so far has been the rejection. You're a fully licensed PROFESSIONAL who repeatedly gets doors slammed, phones hung up, or downright rude things done to you on a daily basis from people who know FAR LESS about investing/finances than you.
No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, yes Mon-Thurs you don't make a dime, and you're working your ass off the entire time, and finally on Friday you hit. A few months in and you start to consider keeping your license and desk job, but moving professions. Like a broker to an analyst. And you'll get paid more from the start. However 3-4 years in you'll pass the analyst and make more money doing less work.[/quote] So I take it that you are going to stick it out? What I am most concerned with is the long term opportunity. I know I can sit at my desk job and make well above average earnings for the rest of my life. This however comes at the cost of working very long hours and with little to no flexibility. j[quote=82391]
"Here is how we explain 50-60% failure rates… How do you plan to prospect?(I will await your response)" Well being from a non sales background, I was banking on EJ providing me the tools and recipe for success. It seems as if door to door has to be the largest portion, and most of my time up front will be pounding the pavement it sounds like. I do have a decent network of accountants and lawyers that I both work with and went to school with, but am not banking on that being a significant portion of assets. So I guess the answer is knocking on hundreds of doors hoping for maybe 5% of them being real quality contacts and building from there. Is that what you were looking for?[/quote]Money in the bank!!!
You can probably find a small accounting firm that does financial planning that will pay you a decent salary. During peak times, you will be doing taxes…during off peak times, you can churn their book. Win/Win!
Yeah, definitely going to stick it out. What I’ve been seeing from the brokers who have been in the business for 20+ years are annuitized books which means you have an annually revolving stream of income from work you’ve done in the past. This affords you the opportunity to work hard or hardly work, whichever you feel like that day. Once you hit about $18k gross commission/month, your standards flatten. $216,000/yr. Assuming 1% annual gross commission per dollar of assets, that’s roughly $22mm AUM. That’s why everyone says “after about $20 million assets, your business starts to run itself.” This is where you want to be
It goes without saying that you still have to work... and 22mm really isn't that much. There's a ton of of money to be made in this business, especially once you have a book of $100mm AUM or more.[quote=82391]As the title states, I am a CPA with about 3 years in at a large public accounting firm and looking into moving into a financial advisor career. My main question is why do so many people fail?? I have spent the better part of today reading through these forums and have seen terrible statistics, but at the same time see many posters that say if you do the work and make the 25 contacts per day then you will make it. So are the people that fail not going out and making the contacts?? I’m just a bit confused, and now starting to doubt whether I should take this risk. I by no means love my job as a tax accountant, but it does provide a nearly no risk path to making six figures in the next few years.
Any insight would be greatly appreciated! Right now I am down to the final face to face interview, and am hoping that this is the opportunity to start "my own" business that I have been looking for! Also, if anyone else has made the move from acccounting I would be interested to hear from you. I am not afraid of hard work, as I am regularly working crazy hours right now. I am just looking for something with a bit more people interaction, and a whole lot less staring at a computer screen! Thanks in advance! j[/quote] If I were in your situation I would try to combine doing taxes while building a investment book of business. Go work for a small CPA firm that will let you build your own client base. Get the clients in because of your tax return work then hit them up for investment business. You can use an independent broker dealer to build the book. I think it will increase the chances of exceeding a lot while giving you a more stable income the first few years. Good luck.I would do a little more research. I am at Jones currently. I wish I new then what I know now. I don’t know what I would have done differently, but I definately would have dug a little deeper into the financial planning world. Don’t expect to make much at jones your first number of years.
The challenge, as with any newbie in this business, is that it’s tought to start ou on your own without a major firm or quality indy firm to train you. It’s sort of like the CPA world. You really need about three years of good “äpprenticeship” before you really get it.
Tryin to build a tax practice from scratch (which he has probably not done before - he probably is an auditor) while also building an advisory practice from scratch will be an uphill battle, so you just need a lot of capital (or low cost of living) for a few years to get going. But the good news is, you can usually pick up a quick 100-150 tax returns (the cheaper ones) in your first few years if you work it hard. Nice thing about the tax business is that you can spend much of the "öff season" prospecting. However, you almost MUST have at least one assistant to be able to complete any volume of returns. But if you do it right, you can keep the number of returns you do small and manageable to generate some recurring cash flow, and over time build up your assets under management to the point where you can stop taking new returns and actually cut back through attrition and price increases. Doing tax returns is not a real fun business (for most).I agree with AG and ICE… You need to leverage your CPA status, not knock on doors like college kids do(me). Don’t diminish you stature because of firm policies.
I agree Wirehouse or Indy firm(while maintaining tax practice)[quote=Still@jones] [quote=82391]
"Here is how we explain 50-60% failure rates.... How do you plan to prospect?(I will await your response)" Well being from a non sales background, I was banking on EJ providing me the tools and recipe for success. It seems as if door to door has to be the largest portion, and most of my time up front will be pounding the pavement it sounds like. I do have a decent network of accountants and lawyers that I both work with and went to school with, but am not banking on that being a significant portion of assets. So I guess the answer is knocking on hundreds of doors hoping for maybe 5% of them being real quality contacts and building from there. Is that what you were looking for?[/quote]I went from CPA to an FA and let me tell you. Do not "bank" on anything with these firms, any of them. They are just a platform for you to sell you. Period. This is a sales job, make no mistakes about it. Leveraging your "network" is fine but if you are just starting out in this business, those CPA/Atty will pass you some business but need to do more prospecting on your own. This "sales" idea was a big shift for me vs. well mr. smith I have a public accounting/tax/SEC audit background...it means squat, honestly. I would look into what others have said in possibly joining a small cpa firm, and either joining their own investment wing in conjunction with still doing accounting work or start your own RIA (search the board on how to do it, i also suggest contacting Fred from Trade-PMR on this board) along with doing some work for a cpa firm. Speaking from someone who has made mistakes, you better makes sure you realize what you are getting into. There is a lot of BS on this board but there are a lot of great resources who speak the truth. Good luck
Thank you so much for the great replies!!! I am so greatful that I found this website as I was pretty much convinced I was making the jump to EJ. I do think that I need to leverage my CPA in a smarter way, so I am going to tell Edward Jones that I am no longer interested. Also, if anyone has any additional input I would love to hear it!
Regarding some of the posts, can someone maybe help me out with some of the acronyms/terms that you all use? Some that I am not familiar with are wirehouse and RIA. Sorry if I sound somewhat ignorant on the subject, but I just kind of fell upon this opportunity and it sounded great at first so I don't have much knowledge on the rest of the industry. I will continue doing research and am hoping to mesh the two careers into one to hopefully make some great money! Thanks again! j[quote=Squash1]
I am pretty sure you can only use the seminar rebate once a year(used to be at EDJ)... Plus I meant big seminars, 5000 mailings, 30 dinners, $1000 just for dinner type..
[/quote] Just to clarify, you can use the seminar reimbursement as often as you want. It has to be a qualified seminar that you're giving, but if you wanted to give the same seminar every Thursday, Jones would reimburse you 75% as a new FA for all of them.[quote=82391]Thank you so much for the great replies!!! I am so greatful that I found this website as I was pretty much convinced I was making the jump to EJ. I do think that I need to leverage my CPA in a smarter way, so I am going to tell Edward Jones that I am no longer interested. Also, if anyone has any additional input I would love to hear it!
Regarding some of the posts, can someone maybe help me out with some of the acronyms/terms that you all use? Some that I am not familiar with are wirehouse and RIA. Sorry if I sound somewhat ignorant on the subject, but I just kind of fell upon this opportunity and it sounded great at first so I don't have much knowledge on the rest of the industry. I will continue doing research and am hoping to mesh the two careers into one to hopefully make some great money! Thanks again! j[/quote] Let me get this straight ... you have an opportunity with a company ranked in the top ten places to work 9 out of the last 10 years; that, in a survey by this very site, has been ranked #1 for the last 17 years (beating the other firms that have been recommended to you - the wirehouses); and that was ranked best by JDP three out of the last four years ... because of things you read on a blog site? Exactly which firm do you think is better than the one that's ranked number one? And you're going to turn them down before you can even define RIA??? While people like Icecold can make it, I think even he would tell you that going independent RIA from the outset is truly stacking the deck against you. But hey, best of luck to you.[quote=LockEDJ][quote=82391]Thank you so much for the great replies!!! I am so greatful that I found this website as I was pretty much convinced I was making the jump to EJ. I do think that I need to leverage my CPA in a smarter way, so I am going to tell Edward Jones that I am no longer interested. Also, if anyone has any additional input I would love to hear it!
Regarding some of the posts, can someone maybe help me out with some of the acronyms/terms that you all use? Some that I am not familiar with are wirehouse and RIA. Sorry if I sound somewhat ignorant on the subject, but I just kind of fell upon this opportunity and it sounded great at first so I don't have much knowledge on the rest of the industry. I will continue doing research and am hoping to mesh the two careers into one to hopefully make some great money! Thanks again! j[/quote] Let me get this straight ... you have an opportunity with a company ranked in the top ten places to work 9 out of the last 10 years; that, in a survey by this very site, has been ranked #1 for the last 17 years (beating the other firms that have been recommended to you - the wirehouses); and that was ranked best by JDP three out of the last four years ... because of things you read on a blog site? Exactly which firm do you think is better than the one that's ranked number one? And you're going to turn them down before you can even define RIA??? While people like Icecold can make it, I think even he would tell you that going independent RIA from the outset is truly stacking the deck against you. But hey, best of luck to you.[/quote] C'mon Lock. He is still in the gathering information stage of his search....why would he want to make a career decision before he has all the facts. Whether the company is best in the industry makes no difference if the opportunity isn't right for him. BTW, they aren't best in the industry.....or maybe they are to the 385 people polled.....[quote=LockEDJ][quote=82391]Thank you so much for the great replies!!! I am so greatful that I found this website as I was pretty much convinced I was making the jump to EJ. I do think that I need to leverage my CPA in a smarter way, so I am going to tell Edward Jones that I am no longer interested. Also, if anyone has any additional input I would love to hear it!
Regarding some of the posts, can someone maybe help me out with some of the acronyms/terms that you all use? Some that I am not familiar with are wirehouse and RIA. Sorry if I sound somewhat ignorant on the subject, but I just kind of fell upon this opportunity and it sounded great at first so I don't have much knowledge on the rest of the industry. I will continue doing research and am hoping to mesh the two careers into one to hopefully make some great money! Thanks again! j[/quote] Let me get this straight ... you have an opportunity with a company ranked in the top ten places to work 9 out of the last 10 years; that, in a survey by this very site, has been ranked #1 for the last 17 years (beating the other firms that have been recommended to you - the wirehouses); and that was ranked best by JDP three out of the last four years ... because of things you read on a blog site? Exactly which firm do you think is better than the one that's ranked number one? And you're going to turn them down before you can even define RIA??? While people like Icecold can make it, I think even he would tell you that going independent RIA from the outset is truly stacking the deck against you. But hey, best of luck to you.[/quote] Well, to clarify I have been gathering information from as many people as possible on both sides of the industry, so please don't think I made a decision based on forum responses (however I do feel they were helpful). I happen to work for a firm right now that is always very highly ranked in those surveys as well, and I must say that I don't know how much those really mean. I think my opportunity is somewhat unique from most who join the profession in that many small CPA firms also have investment practices. I think my efforts will be better spent trying for one of those positions in which will not involve going door to door, and will allow me to earn a significantly better salary on the knowledge that I have, not the amount of people I can successfully sell to. It just really makes more sense to me at this point than going somewhere where my prior background and knowledge gained means absolutely nothing. To add a bit of information, I also have a degree in finance, and consider myself a fairly knowledgeable investor. Ideally I would love to go somewhere where those skills are worth something. I don't feel they are worth much at all at Edward Jones. Please correct me if I am wrong. Thanks again, jEDJ, the company, will look at your background and it might get you an interview easier than if you didn't have the degree and CPA certificate. Beyond that, they won't care if you had your CPA, because you won't be able to put it on your business cards. They won't care if you have a degree in finance either. You might as well have a degree in music theory for all they care.
What will matter to them after the initial interview process and exams is your ability to sell your products and services to potential clients. Having degrees, certifications, blah blah blah in this business is great. It makes you more knowledgable when working with your clients. It doesn't guarantee success or make it easier for you, however. You still have to convince hundreds of people that you can manage their money better than their current guy. EDJ cares how many times you can get that job done. Lots of really smart finance majors get into this business and can't ever figure it out. Just FYI, the only time you have to go door to door with Jones is during training. After that, if you can build your business without it, more power to you. Out of curiosity, what makes you a fairly knowledgeable investor?[quote=Spaceman Spiff]
EDJ, the company, will look at your background and it might get you an interview easier than if you didn't have the degree and CPA certificate. Beyond that, they won't care if you had your CPA, because you won't be able to put it on your business cards. They won't care if you have a degree in finance either. You might as well have a degree in music theory for all they care.
What will matter to them after the initial interview process and exams is your ability to sell your products and services to potential clients. Having degrees, certifications, blah blah blah in this business is great. It makes you more knowledgable when working with your clients. It doesn't guarantee success or make it easier for you, however. You still have to convince hundreds of people that you can manage their money better than their current guy. EDJ cares how many times you can get that job done. Lots of really smart finance majors get into this business and can't ever figure it out. Just FYI, the only time you have to go door to door with Jones is during training. After that, if you can build your business without it, more power to you. Out of curiosity, what makes you a fairly knowledgeable investor? [/quote] I agree with everything you said, and I guess the scary part is that not coming from a sales background is that I'm not certain of how well I could sell. I know I can learn everything quickly, but I feel like selling is something you have or you don't. As far as being a knowledgeable investor, the investment courses in college, lots and lots of research on investing and the markets in my own free time, and putting my learnings to the test by investing my savings into the market. It has been a slow learning process, but feel like I am probably more knowledgeable than the average financial advisor at this point (at least from the ones I have met, since they are more or less just salesmen). Being able to read the financials and understand the way different transactions affect them also is plus that I have taken from my accounting experience. But, like I said I am in the information gathering process. I honestly am looking at several career options now and trying to decide what the best path is for myself.[quote=noggin] [quote=82391]… so I am going to tell Edward Jones that I am no longer interested…
[/quote]
Seemed that way to me based on the statement. While my own time with Jones has a clock attached to it, I’d still be willing to defend the home team … and I’ll throw that “best in the business” thing in there, if only to beat WeddleMe to the punch.
To respond directly to “being a knowledgeable investor” … I don’t know that that is an essential requirement. In fact, it may be a hindrance. Let me explain …
As knowledgeable investor, your instinct will be to tell clients about how wonderful and intelligent your selections are. Here’s a hint: they don’t care. Worse yet, when some of your decisions fail then you too will be a failure - because your validity was built on sand. All of the “good investors” in my class at KYC failed at this job. The successful ones just did the job as described.
The job is about trust, it’s about being secure in your knowledge and sounding like you know what you’re talking about in around 10 seconds. A grasp of PE, Markowitz, alpha and bond convexity don’t mean squat. Your CPA degree will be huge in that arena (they’ll just believe you immediately) but I still think that trust is earned from the pupils out.
82391,
The only thing I will say (based on your posts only) is that you need to be careful about assuming that going to a CPA firm to do investment work will not involve you bringing in clients. I think many that try to get into this profession have the misguided notion that there are lots of clients out there for the taking, that will just be handed to you. Now, the case may be that a well-established firm could hire a newbie to help do some planning or something for existing clients, but if you think you are going to get some portion of the AUM fees to do it, you are probably wrong. You will likely be given a small-ish salary and maybe a bonus. For the most part, people in this business make a lot of money because they bring in a lot of assets (or have brought in a lot of assets already, or have bought a lot of assets, or have inherited a lot of assets from a relative (which you typically buy anyway)). My point is, there is a risk/skill/reward concept in our industry. You don't just get hired by a firm, handed $50mm and start collecting all the fees. It simply doesn't work that way. My point is not to steer you towards Edward Jones, or a wirehouse, or any firm in particular. Just remember, in order to earn the type of salary you would get working at a Big 4 (or is it Big 3 now?) firm, you actually have to earn it. At CPA firms, that usually involves lots of work and a certain degree of years. In our industry, it's about what you have brought in (sort of like law firms). And actually, the same can be said for your typical small local tax/CPA firm. The tax/CPA guy makes the money. He hires some grunts to prepare most of the returns and then he checks them (or he hires checkers). But he is being compensated for (1) taking the risk to build the firm, (2) having the skill to know the tax laws, keep up with laws, communicate and train his employees, and (3) bringing in the clients. I hope this makes sense and you understand what I'm trying to say. I really don't think it matters where you go, as long as you understand what the upside/downside is of each choice. If you just get hired by a local CPA firm to help their investment "arm" you will likely just be given a modest salary and some sort of bonus. Now as you develop, they may hand you some small clients and let you get compensated on it. And maybe you will be well compensated for clients you bring in. But at the end of the day, the bulk of your "excess" compensation (that is, above $100K or so) will be the result of your ability to bring in clients yourself. Of course, there are exceptions to all of this. But by and large, you are going to need to bring in your own clients to make a pretty decent living in this business.One caveat to my post above…taking that route - starting out with a small salary, doing some basic planning, and learning the business that way, may actually be more rewarding and secure than doing it the “typical” shotgun approach that most people use getting into this business (the “wirehouse” way that most of us experience). After a few years doing what I mentioned above, you could start to develop relationships, and start getting referrals, and networking, whatever. The downside is, those may not be “your” clients. They may be clients of the firm. And those clients may be pretty sticky to the firm, especially if they are tax clients. So just think about that.
[quote=B24]82391,
The only thing I will say (based on your posts only) is that you need to be careful about assuming that going to a CPA firm to do investment work will not involve you bringing in clients. I think many that try to get into this profession have the misguided notion that there are lots of clients out there for the taking, that will just be handed to you. Now, the case may be that a well-established firm could hire a newbie to help do some planning or something for existing clients, but if you think you are going to get some portion of the AUM fees to do it, you are probably wrong. You will likely be given a small-ish salary and maybe a bonus. For the most part, people in this business make a lot of money because they bring in a lot of assets (or have brought in a lot of assets already, or have bought a lot of assets, or have inherited a lot of assets from a relative (which you typically buy anyway)). My point is, there is a risk/skill/reward concept in our industry. You don't just get hired by a firm, handed $50mm and start collecting all the fees. It simply doesn't work that way. My point is not to steer you towards Edward Jones, or a wirehouse, or any firm in particular. Just remember, in order to earn the type of salary you would get working at a Big 4 (or is it Big 3 now?) firm, you actually have to earn it. At CPA firms, that usually involves lots of work and a certain degree of years. In our industry, it's about what you have brought in (sort of like law firms). And actually, the same can be said for your typical small local tax/CPA firm. The tax/CPA guy makes the money. He hires some grunts to prepare most of the returns and then he checks them (or he hires checkers). But he is being compensated for (1) taking the risk to build the firm, (2) having the skill to know the tax laws, keep up with laws, communicate and train his employees, and (3) bringing in the clients. I hope this makes sense and you understand what I'm trying to say. I really don't think it matters where you go, as long as you understand what the upside/downside is of each choice. If you just get hired by a local CPA firm to help their investment "arm" you will likely just be given a modest salary and some sort of bonus. Now as you develop, they may hand you some small clients and let you get compensated on it. And maybe you will be well compensated for clients you bring in. But at the end of the day, the bulk of your "excess" compensation (that is, above $100K or so) will be the result of your ability to bring in clients yourself. Of course, there are exceptions to all of this. But by and large, you are going to need to bring in your own clients to make a pretty decent living in this business.[/quote] I appreciate the lengthy post. I by no means expect to walk into an investment firm and expect for them to hand over 50MM in assets to let me manage and pay me as if they were my own. I do like the idea however, of starting at what you are calling a small-ish salary (which honestly probably wouldn't be much less than I make now) to gain experience and later on get paid to bring in clients. This really is not that different from that of a big 4 firm (yes, still big 4 even though KPMG is half the size of the rest) in that once you make manager you are rated on the work you bring in and compensated accordingly. It is not commission based, but moving higher than manager requires meeting certain revenue goals. Again I appreciate the posts, well other than the ones that try to pick apart pieces of what you say and don't give much clarity in their responses. Changing careers is an incredibly hard decision I must say!It makes more sense to be able to utilize a credible piece of your resume: your CPA. You need to go to a place that will allow you to market it and even practice as a CPA.
You want to know about RIA’s? PM me, or Fred from TradePMR or Zach Gronich at RIA in a box.
Those guys know what they are doing and won’t screw you over. Plus, Zach is a CPA and PFS, so knows the CPA side of the RIA world.
I have to disagree with Lock - it makes no sense for someone with a CPA to go there. Just as if you had a Ph.D. - you can’t put that on your business card either.
By having a CPA, it will make prospecting much easier, but not at Jones.
I think you just hit on exactly the way I am looking at it. My original post was concerned with finding out why so many fail at this career. By taking this approach, I can make some decent money with hopefully the same longer term potential of that of an Edward Jones associate. Obviously opportunites to make partner exist in CPA firms in which they would become "my" clients. That's an ambitious goal, but I wouldn't think any more ambitious than starting out from scratch with no clients and building a successful business of my own at a firm like Edward Jones. Definitely ideas to think about...One caveat to my post above…taking that route - starting out with a small salary, doing some basic planning, and learning the business that way, may actually be more rewarding and secure than doing it the “typical” shotgun approach that most people use getting into this business (the “wirehouse” way that most of us experience). After a few years doing what I mentioned above, you could start to develop relationships, and start getting referrals, and networking, whatever. The downside is, those may not be “your” clients. They may be clients of the firm. And those clients may be pretty sticky to the firm, especially if they are tax clients. So just think about that.
I agree with you Mo. Might be a good idea to go out and do some old fashioned interviewing at some local RIA or Indy firms (or CPA firms that offers investments). Not a job interview, but an informational interview to get their perspectives.
But definitely leverage that CPA certificate.
You're taking the analogy too far. By what your saying it is better to know nothing and hand the client an American Funds brochure than to know something about investing. Just because someone is able to rattle off the definitions of R-squared, P/E ratio, alpha, beta, etc. doesn't mean that they would actually do it in front of a prospect. Being a "knowledgable investor" is definitely not a hindrance as long as they don't spend 75% of a client meeting boring them to death with definitions of terms.To respond directly to “being a knowledgeable investor” … I don’t know that that is an essential requirement. In fact, it may be a hindrance. Let me explain …
As knowledgeable investor, your instinct will be to tell clients about how wonderful and intelligent your selections are. Here’s a hint: they don’t care. Worse yet, when some of your decisions fail then you too will be a failure - because your validity was built on sand. All of the “good investors” in my class at KYC failed at this job. The successful ones just did the job as described.
The job is about trust, it’s about being secure in your knowledge and sounding like you know what you’re talking about in around 10 seconds. A grasp of PE, Markowitz, alpha and bond convexity don’t mean squat. Your CPA degree will be huge in that arena (they’ll just believe you immediately) but I still think that trust is earned from the pupils out.
I don’t think that I say anywhere in there that “it is better to know nothing”. When I came to Jones I had an advanced degree from a great school. I do know I had to make an effort not to continually learn more about the minutae of investing when I had problems with making sufficient contacts.
Perhaps I don't understand what the goal of 82391 is; if he wants to continue to work in accounting and be an FA? Frankly, I don't know how that can happen ... maybe somebody else can validate that choice. In my mind this job is full time and then some and I can't see how you could do some tax returns and start this business at the same time. I had a hard enough time focusing all my attention and it was all I was doing. N'est pas? 82391 is looking for the tools to succeed, and Jones offers that in deuces. I know several CPAs at Jones. They transitioned pretty well, it seems and I'm at a loss as to why people think you can leverage that degree elsewhere so much better. What, exactly, can you do at MSSB or UBS with that CPA degree you can't at Jones? (That's a real question, not me being snarky in any way)You're under the assumption that there are only a few firms out there that do investments. There are thousands of small boutique firms that have CPA's that do some investments/planning on the side and vice versa. Some people may want to work with investments but not do it full time because they already have another source of income (filing tax returns or whatever else a CPA does).82391 is looking for the tools to succeed, and Jones offers that in deuces. I know several CPAs at Jones. They transitioned pretty well, it seems and I’m at a loss as to why people think you can leverage that degree elsewhere so much better. What, exactly, can you do at MSSB or UBS with that CPA degree you can’t at Jones? (That’s a real question, not me being snarky in any way)
Don't close down the insurance route. A couple of the Advisors at my company maintain small tax-preparation services. You just need to go through the steps to be able to do so.
Your accounting background would be a lot more valuable on the transfer and distribution planning side than the accumulation angle you would work at one of the large investment firms. The wirehouses, banks, Jones, etc focus only on acumulation and fail miserably at the transfer and distribution of client assets which is where the really sophisticated planning takes place that would allow you to set yourself apart.We’re not talking about UBS or MSSB.
At an RIA, he can actually act as a tax expert when he is working with clients. Tax returns are one thing - which he certainly could do.
If I had a CPA, I would advertise for tax services during tax season and maybe a little off season. Then, when clients bring in all of their stuff, you ask them to bring in their statements and talk about how you would do it differently.
Who needs to doorknock?
We are currently interviewing CPA’s to join our practice to handle all tax related concerns with the practice from business to employees to clients and their accounts. If you enjoy accounting work which I am guessing you do hence the CPA, visit all the firms in your town with a strong resume and introduction of yourself. If you do not find an opportunity then seek EJ, wires, etc.
Best of luck to you.You're under the assumption that there are only a few firms out there that do investments. There are thousands of small boutique firms that have CPA's that do some investments/planning on the side and vice versa. Some people may want to work with investments but not do it full time because they already have another source of income (filing tax returns or whatever else a CPA does). [/quote] Correct. The advantage CPA firms have in my opinion is that there are many tax implications of your investments, and I think many clients would like their tax preparer/financial advisor to be one in the same. Like someone said earlier, for some reason people think that CPAs can walk on water. The argument is that CPAs may not be the best resources for investing advice, but then again in my opinion neither is a salesman playing the role of financial advisor. To ansnwer LockEDJ's question, I am not looking at any firms similar to Edward Jones (MSSB ect.). I hope this makes sense, and moreso I hope there are actually opportunities out there right now that fit this description! Anyone have experience working in one of these boutique firms that may offer both types of services?[quote=LockEDJ]82391 is looking for the tools to succeed, and Jones offers that in deuces. I know several CPAs at Jones. They transitioned pretty well, it seems and I’m at a loss as to why people think you can leverage that degree elsewhere so much better. What, exactly, can you do at MSSB or UBS with that CPA degree you can’t at Jones? (That’s a real question, not me being snarky in any way)
Thanks, Mo - I guess from that perspective I can see your point, although I remain an advocate of doing one thing til you do it right. Especially when it’s as hard as this.
And insofar as who needs to doorknock ... well, not me. I really haven't done much since I got back from PDP. That's kind of my point, actually.One last statement here: What we do isn't hard. The hard part is getting clients. If he can leverage his ability to get more clients by primarily doing accounting work and turning those people into investing clients then the hard part is already done.Thanks, Mo - I guess from that perspective I can see your point, although I remain an advocate of doing one thing til you do it right. Especially when it’s as hard as this.
[quote=82391]The argument is that CPAs may not be the best resources for investing advice, but then again in my opinion neither is a salesman playing the role of financial advisor.
[/quote] I take it all back, it looks like you actually do have this industry figured out !! In all honesty, if you are going to keep your CPA and do some tax work to gain clients, I would ONLY do RIA work (not commissioned work). It maintains the fee-only basis you would operate under as a CPA, it would allow you to bundle your services if you so desire, and maintains the appearance of product neutrality (which you can do with commissioned work also but that's a whole other argument we shouldn't get into here). It would also sort of force you to only take on larger clients, which you should probably do to avoid having way too many clients. OK, get the clients first, then worry about having "too many" clients!2 years with Jones. I don’t like kool-ade, never drank it. Jones is a nice company, but best in class? I think not. I worry that LP and GP are ponzi schemes that eventually will collapse. And I don’t know how a company can be the best one to work for when it’s been around since 1922 and currently has 2% market share. It seems like a good place to learn, but not the best place to stay.
Don't worry you are eligible for LP until 3-4 years in I think. And based on your need to blast EDJ, my guess is your production won't get you there.2 years with Jones. I don’t like kool-ade, never drank it. Jones is a nice company, but best in class? I think not. I worry that LP and GP are ponzi schemes that eventually will collapse. And I don’t know how a company can be the best one to work for when it’s been around since 1922 and currently has 2% market share. It seems like a good place to learn, but not the best place to stay.
Quick question for you.... Who makes better cars, Ferrari or Kia? Which one has vastly more market share? Understand how you can have low market share and be best in class? Full Disclosure: I do not work for Edward Jones, but I can see them for what they are.2 years with Jones. I don’t like kool-ade, never drank it. Jones is a nice company, but best in class? I think not. I worry that LP and GP are ponzi schemes that eventually will collapse. And I don’t know how a company can be the best one to work for when it’s been around since 1922 and currently has 2% market share. It seems like a good place to learn, but not the best place to stay.
Surely you’re not comparing E Jones to Ferrari? Kia is more like it. There is nothing about Jones that would compare it to Ferrari. It seems that Jones has company trolls who make a point of denigrating anyone who prints honestly…er…badly about them. Considering their rate of desired growth and their LP/GP payout, it’s obvious that Jones is trying to be a big player. Just don’t have the ability to pull it off. They’re OK for a small town second rate house. But you have to admit it, 87 years in business and 2% market share doesn’t speak well about E/J ability to compete.
I’ve been the best at evrything I’ve attempted for over 50 years. That’s just the problem. Jones isn’t the best. But that’s OK. It’s actually a good place to learn. I’ll give them that. It even has some good FA’s. I’d say about 10% of them. I’ll learn what I need, then move on to an independent practise. But this is fun. I love getting a rise out of the company trolls. It shows how shaky they are when they worry so much about an anonymous blog.
Well, I guess you ain’t the best at what you’re doing now, eh fella? Must be hard to come to that understanding.
And for what it’s worth, why don’t tell me exactly what portion of the market LPL, RJ, MSSB, and JPM have. Just curious, since you throw around that 2% thing like you know what the fck you’re talking about.
Well, I know it's a difficult task to understand the concept of analogy. You see, I'm not saying Edward Jones is a Ferrari, I'm using the example to illustrate how market share has little to no bearing on the quality of product offered. The best part is that you assume I am an Edward Jones company troll. I do not, nor have I ever worked for Edward Jones. I do however appreciate the glowing reviews they get in registered rep and on the Fortune lists. How long has Macy's been around versus Walmart? Macy's has been in business over 100 years and Walmart has a much bigger market share. I would shop at Macy's any day over Walmart. Your examples are terrible. P.S. I'm independent and I enjoy it greatly, but I can see how ML, MSSB, UBS, or EJ would have it's advantages.Surely you’re not comparing E Jones to Ferrari? Kia is more like it. There is nothing about Jones that would compare it to Ferrari. It seems that Jones has company trolls who make a point of denigrating anyone who prints honestly…er…badly about them. Considering their rate of desired growth and their LP/GP payout, it’s obvious that Jones is trying to be a big player. Just don’t have the ability to pull it off. They’re OK for a small town second rate house. But you have to admit it, 87 years in business and 2% market share doesn’t speak well about E/J ability to compete.
I love Walmart…they have everything, if the doors were to lock you could live there probably for a year…
You are 52 years old and you have been the best at everything for over 50 years ? You were the best at lego's at age 2 ? What the hell are you talking about ? Jones being the best and you being the best is two different things. You CAN be the best advisor in the country at Jones. Peyton Manning inherited a 3-13 Colts team. Nothing was going to stop him from becoming the best.I’ve been the best at evrything I’ve attempted for over 50 years. That’s just the problem. Jones isn’t the best. But that’s OK. It’s actually a good place to learn. I’ll give them that. It even has some good FA’s. I’d say about 10% of them. I’ll learn what I need, then move on to an independent practise. But this is fun. I love getting a rise out of the company trolls. It shows how shaky they are when they worry so much about an anonymous blog.
Do I understand you correctly? For 50 years, you were the best at everything that you tried, yet you are at the same place as a 25 year old car mechanic who decided to switch occupations and become a financial advisor. Since you are the best at everything, is it a safe assumption that you are then number 1 2nd year advisor at Jones?I’ve been the best at evrything I’ve attempted for over 50 years. That’s just the problem. Jones isn’t the best. But that’s OK. It’s actually a good place to learn. I’ll give them that. It even has some good FA’s. I’d say about 10% of them. I’ll learn what I need, then move on to an independent practise. But this is fun. I love getting a rise out of the company trolls. It shows how shaky they are when they worry so much about an anonymous blog.
I’ve been the best at evrything I’ve attempted for over 50 years. That’s just the problem. Jones isn’t the best.
Sounds like he is blaming Jones for not being number 1 !Don’t feed this guy. At least meletio was amusing.
When guys (like me) who don’t really like Jones are defending Jones, you know you are way off base.
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