How Hard

or Register to post new content in the forum

33 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Dec 26, 2006 9:46 pm

How long does it take to get to 6 figures in this business?  I'm considering it.  Right now I'm in a corporate job and would like more freedom--- 28 yrs old, and will make 100k next year. What can I expect to make starting out as a financial advisor?

Dec 26, 2006 10:11 pm

Three to five years with lots of variables.

Dec 26, 2006 10:48 pm

If you go the insurance company route and work your ass off, $100K is very doable in your 2nd year.  (I know plenty of people who did it their first year, but they were either exceptional or lucky.)


I'm a big fan of the insurance route in this business.  I see a few advantages without any disadvantages.


1)Insurance is a huge part of financial advising.


2)The insurance company B/Ds have significantly higher payouts than the wirehouses.


3)Insurance sales don't go through a grid.  This typically means that an insurance sale for someone with an insurance company will make 4 times the income on an insurance sale.


4)Significant money can be made without your clients having to have significant money.


5)Learn to sell insurance and it makes gathering assets very easy.


6)The top insurance guys make more than the top investment guys.


7)The insurance guys make an immediate tangible difference in the lives of their clients.


Dec 27, 2006 8:32 pm

If you're in it for short-term gain, you won't make it. Do yourself and your

future victims, I mean clients, a favor and go sell some insurance.

Dec 27, 2006 9:16 pm

Lex, why the negativity?  There are plenty of people who need to make a decent buck from the getgo to start in this business.  


His mortgage, debts, lack of savings, and tuition bills may not allow him to take an income hit.


Dec 27, 2006 9:58 pm

Alot of times, the more value you add for people the more money you will make.  



I always thought the investment guys made more than the insurance guys.



Either way is it far fetched to be making 100 after 2 years?

Dec 27, 2006 11:57 pm

Either way is it far fetched to be making 100 after 2 years?


Yes...if you plan on working at banc of America

Dec 28, 2006 12:05 am
johnson:

Either way is it far fetched to be making 100 after 2 years?


In most instances, yes, that's a real stretch.  If it was so damned easy, everyone would be doing it.  If you've read far at all here, you've probably seen the dim statistics about how many try and fail in this business because they can't wait out the lean years.  If you have $40K in the bank and your family can live on that amount per year, your chances are much better.  If, on the other hand, your family needs $100K/year for living expenses and you have $5K in the bank, you're probably kidding yourself.

Dec 28, 2006 1:07 am
anonymous:

Lex, why the negativity?  There are plenty of people who need to make a decent buck from the getgo to start in this business.  


His mortgage, debts, lack of savings, and tuition bills may not allow him to take an income hit.




Yes anon, but that is the concern....that his financial situation(i.e. lack of savings and high bills) could lead him to make recommendations/decisions that he might not otherwise make....

Dec 30, 2006 2:05 pm

My concern is that brokerage firms are notorious for "stringing people along"      They get the best bang for their buck than any other type of white collar jobs. Unfortunatley, the victims of this are the low payed staff.  Obviously there are the top producers---the only ones that are ever talked about in recruiting. I just don't want to be one of the suckers that makes 40-50k for a few years, then when the pay is decent, it's just making up for the lack of pay in the early years.

Dec 30, 2006 2:44 pm

Johnson, you have to think about it like opening your own business. You

need up-front money and time. You need less up-front money than a lot

of businesses, but you need it. It may be in the form of cash reserves,

working spouse, real low living expenses, whatever. But if you succeed,

the money and lifestyle in the out years will more than make up for it.

Don't focus on what you can make the first few years. Those are the

business building years. Focus on what you have to do to make good

money in 5 years, If you do that right, the money may come sooner than

you think.



As for your question, an average for the first 3 years might be something

like this:

yr1 45k

yr2 64k

yr3 85k



Of course, there are LOTS of factors - firm, stipend (if any), connections,

work ethic, etc. Bu this is probably about average (which means many

make LESS).

Dec 30, 2006 10:20 pm
johnson:

My concern is that brokerage firms are notorious for "stringing people along"      They get the best bang for their buck than any other type of white collar jobs. Unfortunatley, the victims of this are the low payed staff.  Obviously there are the top producers---the only ones that are ever talked about in recruiting. I just don't want to be one of the suckers that makes 40-50k for a few years, then when the pay is decent, it's just making up for the lack of pay in the early years.

Dec 31, 2006 8:23 am
anonymous:

Lex, why the negativity?  There are plenty of people who need to make a decent buck from the getgo to start in this business.  


His mortgage, debts, lack of savings, and tuition bills may not allow him to take an income hit.




My negativity (if I have to spell it out for you) is based on this potential new rep's focus on how he can make a lot of money FOR HIMSELF in the shortest amount of time possible. This kind of thinking leads to bad decisions for clients and is NOT good for our industry.  -- Johnson, 100k is nothing. you can make HUGE amounts of money is this business if you build it the RIGHT way and ALWAYS put your clients first.

Dec 31, 2006 2:30 pm

Actually, that kind of thinking will have more to do with what sort of firm is a more appropiate place to begin a career.  For instance, someone that must make $100,000 as quickly as possible would be better suited to start working at an insurance company instead of a wirehouse.


Another possibility is that they would have to do more things that are "A" shares instead of fee based accounts. 


Everyone must figure out how they can survive before they can thrive and they must do it in accordance with your following statement:  


"100k is nothing. you can make HUGE amounts of money is this business if you build it the RIGHT way and ALWAYS put your clients first."


I'm in 100% agreement with this statement!

Jan 9, 2007 9:11 pm

From a logical perspective I just dont know if I'd ever catch up to where I would be in the corporate job. If making 100k and getting 20% raises each year , I'd literally have to be hitting the cover off the ball to just be even with that.   But the freedom of being your own boss must be great

Jan 9, 2007 9:16 pm

Who gets 20% annual raises in the corporate world?    That's not the norm from what I remember.


scrim

Jan 10, 2007 12:03 am

It is in fantasy land!!!

Jan 10, 2007 2:06 am

If you don't mind working for someone else your whole life then stay at your corporate job.  If on the other hand you want to lay a foundation so that in ten to twenty years you can make 300,000 before any new business walks in the door become an advisor.  As for going the insurance route if you have good contacts Mr. A is right you will make more money in insurance quicker.  For example what do you think would be easier for you to do from these two options.  No. 1 gather ten million in AUM on a fee based platform.  We will assume a one percent on that to give you a rough gross of 100,000.  Now contrast that with an insurance case I am currently working on where the client will need on the low end 3-4 four million of insuance and possibly as much as eight million.  The payout from that if you go with a wirehouse or investment firm will be forty percent if your lucky with probably no renewals, I can't speak for every firm but that is what one I am familiar with does.  Or you can be with a Guardian or company similiar to that and probably get a payout near eighty percent with renewals.  Incidentally this case on the low end has will be around 200,000 with potential for much more.  FYI it is whole life making it expensive but worth it since the client is a multi multi millionaire.  So there you have it a case from a relatively new advisor.  Gather a lot of assets or sell one huge policy.  It is difficult to do but at least you now can see what the potential for life insurance can be on the very high end.  Hope this was helpful to you.

Jan 10, 2007 2:40 am

Since this is a profession, try to learn as much about the  everyday life of the profession as you can. In other words, even when you are established, you have to sit at a desk every day and provide service. Make sure you really enjoy doing this kind of work - for most reps, that means working alone, directly with your clients, versus being part of a collaborative team (unless you join some kind of group professional practice). You always work with CPAs, attorneys, assistants and so on, but other advisors are basically your competitors and colleagues.


If you align your interests with your work, and have some staying power, this is a very cool and rewarding career. Check out the CFP track, as it represents the elements of our profession: ethics, experience, and education (professional knowledge). The application of knowledge is fun and spiritually rewarding, because people relationships are complex and the stakes are real. It takes a lot of social skills and is argueably some of the simplest (not necessarily easy) yet most intelligent work on the planet.  Reps who just get into it for the quick money or ego often are not around after a few years.


It pays well, because few advisor wannabees can pull it all together over a sustained period of time. Those who succeed are continuously stimulated, but must constantly reinvent themselves to stay motivated. Consider this example: Maybe last year was a good year in the market. Two advisors are now separately managing 40 million each of their client's assets. Perhaps this year is also expected to be a good market year. Yet one advisor is busy moving the "average" clients portfolio more heavily into fixed assets, the other is holding or increasing the stock percentages. Both advisors are trying to do the best thing for their clients. Who is right? That depends on the "art part" of the business, experience, knowledge of the clients, service model, and so on. It is what makes the job rewarding, but also stressful. It is where the rubber really meets the road in terms of this being a profession, and not just a sales job.

Jan 10, 2007 11:37 am

IMO, it sounds as though you are pretty good at what you do ($100K and 20% increases).  Think long and hard about changing careers.  There is a LOT of risk and once you have left your field for a few years it will be very hard to get back in.  The plain fact is that MOST people don't make it in this career for a variety of reasons.  It doesn't mean that they aren't smart, hard working, good people.  I've seen a lot of good people leave the business and a lot of idiots be fast starters.  Its just the way it is.  Is it "cool" to be your own boss, yes but unless you are a true independent then you do still have to answer to others, even if you have flexibility.  Bottom line, I wouldn't recommend this career to anyone who is making good money somewhere else unless you're already financially set and this is a second career.  I do recommend it for people who have no other good options.  If you do decide to do it, make sure you have spent a lot of time with several new brokers to see what they do day in and day out.  You may find its not as glamorous or interesting as you think.