CPA to EJ?

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Dec 10, 2009 3:49 pm

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
Dec 10, 2009 3:52 pm

You have to have the ability to ignore rejection.  Working hard isn't the issue.  It's working hard at PROSPECTING.

Dec 10, 2009 3:54 pm
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
 
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...
 
 
Dec 10, 2009 4:01 pm

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!
j
Dec 10, 2009 4:14 pm

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..
Dec 10, 2009 4:16 pm

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)
Dec 10, 2009 4:21 pm
Squash1:
...3. Seminars
4. Mailing
5. Buy a book
 
But the last 3 will cost you $$$ to get it going...
 

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.
Dec 10, 2009 4:30 pm

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..


Dec 10, 2009 4:30 pm
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..
 
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.
Dec 10, 2009 4:33 pm

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
Dec 10, 2009 4:38 pm
82391:
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..


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.





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.

Dec 10, 2009 4:53 pm
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

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.
Dec 10, 2009 5:10 pm
82391:
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..
 
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.
 
Here is how we explain 50-60% failure rates....
 
How do you plan to prospect?(I will await your response)
Dec 10, 2009 5:15 pm

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.
Dec 10, 2009 5:19 pm
"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?
Dec 10, 2009 5:26 pm
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.
 
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
Dec 10, 2009 6:41 pm
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?



Money in the bank!!!

Dec 10, 2009 6:44 pm

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!

Dec 10, 2009 7:07 pm

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.
Dec 10, 2009 7:50 pm
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
 
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.