Complete newbie to industry, needs help
Alright, so I graduated June 10’ with a degree in finance from a decent college. I’ve only managed to work as a bank teller for about 6 months. I’ve recently just finished a 2nd interview with a company called Independent Capital Management in southern CA (http://www.icmfinancial.com/) From the other sources I’ve read and how the interview has gone, I believe I will be hired as a financial advisor. There is no salary and everything is based on commission.
I have many questions. I’ve been told that I can look forward to an average 1st year salary of between $30K -$40K which quite frankly is only barely better than what I make now. My main concern is that I have no work experience in this field although my education is related to this field and I have sales experience. First, is that salary range fairly accurate? If this figure is accurate, how hard am I going to need to work for that? Are we talking about 50+ hours a week to get that?
I am going to need to pay some upfront costs to get my licenses and thereafter some sort of monthly fee that comes out to about $300 a month. My main concern is how difficult is it going to be that first year getting referrals to conduct business? My fear is that who is going to want to give their money to some recent college graduate that has no experience? Granted I don’t have to mention those details but it’s bound to come up also considering my age since I’m only 23. Which leads me to age, being so young, is that going to hurt my chances for getting business?
I’ve done some reading and it seems like some people are fortunate enough to receive some hand me outs from older pros in the office… not sure how common this is but in general what kind of atmosphere should I expect at work? Is it usually highly competitive and cutthroat or do people go about doing their own thing. I know this is a very general question but I’m just trying to get a sense here.
At work right now, I have a very good working relationship with management and I strongly suspect I will be able to secure a better position paying around $40K but it will pretty much cap at around $50K max. I’m just not sure if the risk of a fully commissioned based position is worth the risk. Thanks for all the help.
I got into the biz at 24, my jr. partner also was 24. Age is only an issue if you let it become one. I'm now 20 yrs in, my biz partner 10.
You sound like you have good opportunities to rise in teh ranks where you are. The offer you are looking at is not very attractive. Also, it wouldn't hurt you to gain a few years, and some experience. How about becoming licensed at the bank you're with, or another bank that is interested in you?
Based upon some of your "concerns", you're probably not ready for the big leap. Waiting a bit is not going to hurt, but realize when you enter this biz, the first 3 yrs don't pay all that much, so keep your cost of living LOW.
Fully commision based is worth the risk if you are committed to working hard to earn new business. Like BFP mentioned age is only an issue if you let it be. You need to figure out what your expenses will be and how long you can float yourself without a paycheck and what you need to earn.
I think the FA opportunity is among the greatest in America.
However, I think the offer that you're getting is very poor, I would not recommend this one.
100% Commission right from the start, pay for your own licensing (around $400 in testing fees (7/66/insurance) and probably close to a grand for training) and then pay $300/mo there after (I'm assuming its some sort of desk fee).
All while getting zero income.
For someone as brand new as it gets, thats a recipe for failure.
It sounds to me like the person hiring you is willing to take a chance on you, so long as it doesn't cost him any money. If you make it, great! If not, well no skin off his nose.
This business already has a 80-90% failure rate as it is (ie out of the business within 3-5 years) - throwing in an inability to earn income for at least a 4-5 months and you're talking about a near 100% rate in your case.
Are you currently living at home or do you have someone else paying your bills? Unless you do, I don't see how you can afford to receive zero income and actually pay money out. (gas to get to work and the above mentioned $300 desk fee)
Keep in mind there are other cost involved - For starters, you're going to need several suits. Even cheap ones run $150-200 per. Plus shirts, pants, shoes, ect. For my starting business wardrobe I paitently waited for good sales and spent $1500-2000 right off the bat.
In my office, there's a guy you're age fresh out of college with a degree in finance that my firm (a major wirehouse) hired a few months ago. He didn't have previous sales experience, in fact this is his first real job (kind of makes me jealous, lol). I know he had interned with the firm while in school so maybe that helped but I wanted to mention him so you know it is possible.
By the way, our firm also provides 5 months of training between start date and production start date (5 months to get your 7, 66, insurance and all of the firm training. I spent 2 months studying for my 7 and a month for my 66 and about half of people fail their 66 the first time, so add in an extra month for the mandatory 30 day waiting period).
You could probably cut it down to one month for the 7, one month for the 66 and a week for insurance licensing if you're very good at studying and standardized test. So absolute best case you're looking at 2.5 to 3 months before you can even start production. I think under a best case scenario you're looking at 4-5 months before you even see your first meager pay check. Again, thats absolute best case.
The series 7 and 66 is our industry's version of the bar exam.
As your advisor :)
My advise would be:
Keep your current job and actively persue a major wirehouse firm like Merril Lynch or MSSB.
Both of those firms will pay you a generous salary for 2-3 years and pay for all of your training, lisencing, ect. I want to say the range is 40-75k a year for them on the salary - normally its depending on experience and previous income but being in Southern California where the cost of living is so much higher you may get around $50k to start.
Either way - search for a post here called "the 500 day war" by The Judge. It's a cliff notes version of what to do in the first 2 years of production to succeede. I built a lot of my own business plan around that.
PM me privately if you want to talk more.
Dragonfly, I think the past few responses you've been given are very accurate. I can attest to PushForward's statements about the wires. I worked for a major wirehouse with a salary between $50-$60K / year. Previously, I had a couple of years of sales experience, but in a different industry. One of my major fears about getting into this business was the commission only gig. The way our setup was is that they paid for your desk, phone, computer, all standard office stuff, your licenses (7/66/insurance), and gave you full benefits as a W-2 employee, access to a group retirement plan, etc. There really wasn't any risk other than just the mere fact of failing - which, I hate to admit, that I did....at the wire, anyway.
If I had to do it all over again, I would probably start out at a bank (as a personal banker, or whatever), get licensed, maybe become a bank FA to get my feet wet, then make the jump to the wire. The hardest part of this business, as I'm sure you're well aware, is client acquisition. Think long and hard about the circles you currently run in, how much business potential there might be there AND whether or not it's likely you can capture it, and what your day to day business plan implementation would look like.
For me, the best thing, even with the DNC these days, would have been to cold call hard off the bat. Many people say that cold calling doesn't work. The way I originally started cold calling didn't work. My approach was off. If you're interested in the details, PM me, and we can talk about it. When I finally figured out what I was doing, it was too late. I landed a couple of nice-sized accounts from cold calling, but my problem was that I spent way too much time on other marketing methods early on, that I should have waited on, or at least not spent as much time on, until later in the game.
The best things you can do right now is find a firm that will at least give you some sort of base, pay for your licenses, and not charge you a desk fee. If they are not willing to make an investment in you, then f*** them, they're not worth it. There are plenty of firms out there willing to throw you to the wall and see if you stick. You may, you may not...but, at least let them pay your bills while you both find that out.
I know a lot about the firm you are thinking of working with. PM me for more info on how it works there. P.S. Rick Ross, I'm gonna PM you and find out what really works for you.