CPA vs. FA Career Questions

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Aug 10, 2006 9:50 pm

Hi everyone. I have found this forum to be quite helpful and interesting. Thanks to all for sharing their knowledge, experiences, and recommendations. I am once again hoping for some advice and the answers to a few questions. I am in the process of making a serious career decision and am considering whether to work at a CPA firm or whether to pursue a career immediately as a FA with a brokerage firm.


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I have recently retired from the U.S. Army and I can live on my retirement – but not as “comfortably” or with the lifestyle that I would like. I also have a son that starts college in two years. I received an MBA in Accounting just before retirement, but do not have accounting work experience. I do have some experience in budgeting and cost estimating. I am a 44-year-old male and live in the SE. I have always kind of dreamed of being a “stock broker” – which is now known as a financial advisor. I realize that the position has changed to that of being more of an asset gatherer, but still remains one of the “best” careers in the world. I have narrowed my post military career choices to (not necessarily in order): (1) working at a CPA firm with the goal of switching to FA field later on, or (2) going directly into a career as a FA.



(1)   I have an interview with a local CPA firm on Wednesday and have reasonable expectations of being offered a position. This would probably be the “safest” route and potentially offer much better networking, prospects, and maybe even direct clients. I am concerned about my age and after spending a few years to get established as an accountant and possibly a CPA certification I would be 47 – 49 years old. I have concerns about starting out as a FA at that age – would 48 be too old to start in the business? I also have thoughts of working as an accountant and getting my financial certifications on the side and possibly opening my own CPA / Financial services company as an independent. Does anyone have knowledge of an example of one going straight from CPA to FA or is it better to work at a brokerage first?



(2)   I have interviewed and am still “in the running” at both EDJ and SB. SB would be my first choice and seems like they would offer a larger 2 year base salary, more investment choices, and an immediate office to work from. I interviewed with the branch manager and took my tests this last week. The interview went quite well and she promised help with the business plan if I did well on the tests. I will find out next week about the tests, but I think I did pretty well and fully expect to go the next level of interviews with other SB FAs. The only drawback is that I will not be offered a position until September and a decision about EDJ and the CPA firm will be much sooner. Any ideas on the odds of making it if I make it past the interviews and am submitting a BP to corporate?


 


I have completed my final phone interview with EDJ and am now waiting on background checks before completing my door-knocking exercise and a final face-to-face interview with a senior FA. I like the idea of being able to get my own branch office and think this would make it feel more like my own business. I also like the idea of travel with the EDJ “diversification” trips and their annual sales conferences. The market that I am in seems like it would be well suited to the EDJ model and targeting smaller accounts. Things might change, but for now my eventual goal would be $100K in commissions and I feel that with hard work that I could reach this goal at EDJ. I know that you need a higher number of smaller accounts, but it seems that other firms really do not target this segment of the market. The EDJ staffing recruiter told me to expect an offer in roughly two weeks and that I would have to make a decision with 5 business days. Any knowledge on accepting the position “contingent” on other job offers or being able to delay to start date to allow a possible offer from SB?


 


             Thanks in advance for any insight, advice, or sharing of information that might help me in making this most difficult of career decisions. FA Prospect.



  

Aug 10, 2006 9:56 pm

Have you thought about how you want run your business?  If you want to do transactional stuff, Ed Jones will support you.  But if you want to run a fee based practice, you need a wirehouse.  Also, have you thought about what type of people you want to work with?  With Ed J it's everybody.  With the wirehouse, it's high net worth.  


What do you want out of your business long term?


Ace

Aug 10, 2006 10:02 pm


go CPA, study for your series 7, then network in with a firm with a third-party agreement within your CPA firm, on condition that they sponsor you and allow you to sell within your CPA firm's client base-


a lot of firms seek to partner w/ CPA's and strike a FIS/commission splitting agreements with them, in your case, your firm would also want them to sponsor you, and allow you to work with them in-house.




Aug 10, 2006 10:30 pm
TexasRep:

go CPA, study for your series 7, then network in with a firm with a third-party agreement within your CPA firm, on condition that they sponsor you and allow you to sell within your CPA firm's client base-

a lot of firms seek to partner w/ CPA's and strike a FIS/commission splitting agreements with them, in your case, your firm would also want them to sponsor you, and allow you to work with them in-house.


I think that this might be a good plan...but do you thinks 44 is a little late to be starting down this road? I understand you to say that I could market finacial products (earning commissions) while working at the CPA firm and start working towards a client list?

Aug 10, 2006 10:37 pm
Ace Planner:

Have you thought about how you want run your business?  If you want to do transactional stuff, Ed Jones will support you.  But if you want to run a fee based practice, you need a wirehouse.  Also, have you thought about what type of people you want to work with?  With Ed J it's everybody.  With the wirehouse, it's high net worth.  


What do you want out of your business long term?


Ace



Good questions, Ace. Ideally, I would love to work with a smaller number of very HNW clients, work about 35 hours a week, and make $500k or more a year, but this might not be realistic. I am not really sure if I will be offered at SB, so EDJ or a CPA firm might be my only choices at this point.


I am willing to work very hard for 4 - 5 years and hopefully then start making it more on referrals and word of mouth. I think I would be happy in making $100 - $150K per year. In building a good book, I would like to be able to pass on a thriving business to one of my son's when it is time for me to "go out to pasture".

Aug 10, 2006 10:47 pm

My two cents.


If you want a great place to build a business with some of the best training in the industry, work for Jones. Jones is a wonderful place to build a business (not sold that it's the best place to maintain one at this point. Been here 5 years and the jury is still out.)


If you want a high-pressure environment with the best platform in the business, go for SB. Great firm. I have seen their platform and it made my jaw drop.


You will make more money at SB (if you succeed).


Jones has lower and more reasonable standards that are very attainable.


It depends on your personality.


I disagree with the CPA route. If you are going to get into the business, get into the business NOW, especially at your age. The CPA will still be there if you don't make it in the business.


One thing is certain. If you make it in the business, there will be months that you make more money than whatever annual salary they are offering you now. I guarantee it.


44 is by no means too late to start.


if you put in the work for 5 years, you will make 6 figures the rest of your life. period. Again, that's if you make and have any nose for the business whatsoever.


I hope that helps.


RS



Aug 10, 2006 11:02 pm
FA Prospect:
TexasRep:

go CPA, study for your series 7, then network in with a firm with a third-party agreement within your CPA firm, on condition that they sponsor you and allow you to sell within your CPA firm's client base-

a lot of firms seek to partner w/ CPA's and strike a FIS/commission splitting agreements with them, in your case, your firm would also want them to sponsor you, and allow you to work with them in-house.


I think that this might be a good plan...but do you thinks 44 is a little late to be starting down this road? I understand you to say that I could market financial products (earning commissions) while working at the CPA firm and start working towards a client list?



44 is the perfect age- you're not old by any means for this biz (people like maturity in their FA's), the CPA biz provides stability and income, the FIS agreement with a B/D, allows you to be trained, licensed, then get your hands dirty while learning product and selling within the framework of familiar surroundings and clients- and still getting paid by CPA.


conversely, for me, doorknocking at 44 might be tuff (at your age)- but that's me.


Aug 10, 2006 11:16 pm

Thanks RS. I am definitely thinking very seriously about the EDJ deal. Do you think EDJ opportunity would still be there if I choose to go CPA or even if I don't make the high standards asset gathering required by SB?


I wonder if I can delay starting training until a position is offered / not offered by  SB?


Prospect

Aug 10, 2006 11:24 pm
TexasRep:
FA Prospect:
TexasRep:

go CPA, study for your series 7, then network in with a firm with a third-party agreement within your CPA firm, on condition that they sponsor you and allow you to sell within your CPA firm's client base-

a lot of firms seek to partner w/ CPA's and strike a FIS/commission splitting agreements with them, in your case, your firm would also want them to sponsor you, and allow you to work with them in-house.


I think that this might be a good plan...but do you thinks 44 is a little late to be starting down this road? I understand you to say that I could market financial products (earning commissions) while working at the CPA firm and start working towards a client list?



44 is the perfect age- you're not old by any means for this biz (people like maturity in their FA's), the CPA biz provides stability and income, the FIS agreement with a B/D, allows you to be trained, licensed, then get your hands dirty while learning product and selling within the framework of familiar surroundings and clients- and still getting paid by CPA.


conversely, for me, doorknocking at 44 might be tuff (at your age)- but that's me.



Thanks TexasRep. This sounds like a very good option. I must admit that I like all 3 options and really think that I could be successful in all. I keep trying to envision myself 5 -10 years down the road and what would be the best option. I really wonder if the CPA firm that I am interviewing with is "on track" with anything like this and if I should mention during the interview? I almost hate to merely take the first one that offers, but really wonder about the wisdom of turning down a good offer to have the others fall through.

Aug 10, 2006 11:43 pm

Jones will always have a place for qualified people.


I think it will still be there for you if you are up front with Jones about it.

Aug 10, 2006 11:53 pm


--agreed, tuff to answer, but i'd ask.
at 44 you bring a maturity which allows you to be bold and forward thinking-


"has this firm ever had an agreement w/ a BD?"
"the reason i'm asking is, my interest has always been to be a full service CPA, offering clients financial services, as well as....."
"if i wanted to pursue something like that down the road here, could i look into...."

talk to indy LPL or RayJ offices locally- these type indy firms typically look for CPA/Bank affiliations where they make sense, tell them your grand plan even before talking to the CPA firm, see if this is an option, then tell the CPA's that :


"i've talked to Smith and Associates on Main, they are affiliated w/ LPL and they said that after I was established here that they'd be open to an agreement w/ us, and to sponsor me for the series 7, which would allow....."


be proactive- search it out now- you'd likely be doing all parties a favor, as well as yourself.



Aug 11, 2006 12:34 am
FA Prospect:
Ace Planner:

Have you thought about how you want run your business?  If you want to do transactional stuff, Ed Jones will support you.  But if you want to run a fee based practice, you need a wirehouse.  Also, have you thought about what type of people you want to work with?  With Ed J it's everybody.  With the wirehouse, it's high net worth.  


What do you want out of your business long term?


Ace



Good questions, Ace. Ideally, I would love to work with a smaller number of very HNW clients, work about 35 hours a week, and make $500k or more a year, but this might not be realistic. I am not really sure if I will be offered at SB, so EDJ or a CPA firm might be my only choices at this point.


I am willing to work very hard for 4 - 5 years and hopefully then start making it more on referrals and word of mouth. I think I would be happy in making $100 - $150K per year. In building a good book, I would like to be able to pass on a thriving business to one of my son's when it is time for me to "go out to pasture".



Your goals are not unrealistic.  But you won't get there by staying with Jones.  You are much more likely to get there with Smith Barney or another wirehouse (and why haven't you interviewed at the obvious other 3? UBS, ML, MS)  And if you accumulate a large enough book, you could potentially make your goals while staying at the wirehouse (1.25MM in production would equal about 500k compensation).  If you don't stay, your production would only have to be half, if you become an RIA, to make your goals (where you would keep all of your asset based fee, but still have to pay your rent and your assistant.)


A wise man once said, "Begin with the end in mind."  Know where you want to go, or else you won't get there.


Ace

Aug 11, 2006 12:46 am

Rule #1?

Aug 11, 2006 1:40 am

Having started at a CPA firm and eventually migrated to my own indy practice located inside a CPA firm, I actually think all three options are viable.  The SB option is probably the most difficult from ground zero, and the CPA firm to financial advisor avenue is probably the easiest, at least when it comes to making steady money from the start.


If you do decide to go with the CPA firm, I'd work the angle to CPA and part-time advisor.  Unfortunately, this route would required the most self-teaching, but that can be done with some effort.  Getting a CFP is a good idea and I'm biased, but I believe that a CFP/CPA combo is a very nice set of credentials to gain the confidence of clients and prospective clients.  CPAs are a great source of referrals, especially if you can revenue share with them.  HD Vest, while perhaps not the best independent firm, specializes with part-time accountants/FAs.  If they have a minimum, it's probably very low.


Starting at Edward Jones is a good way to learn business basics and prospecting techniques.  If you go this route, plan on being there at least 4-5 years to get an adequate base of knowledge and clients, and avoid any unpleasantries regarding repayment of training costs if you try to leave too quickly.  You may decide that you love it there and want to make a career, but if not, at 4-5 years and perhaps $250K production, you'd be positioned to jump to an independent practice (perhaps in a CPA firm?) with a better independent firm, such as my B/D (LPL).  The other solid indy firm most look at is Raymond James, but at this point at least, their minimum production numbers are higher.  Starting at Jones, is quite honestly, probably your best bet.


Obviously, if you go with Smith Barney, you are starting with a firm with excellent name recognition and a solid reputation among people with money.  This alone can give you instant credibility with a prospect.  The downside here is that with the top tier firms, you generally have higher production hurdles and more ongoing pressure to increase, even after the minimum hurdles are long since met.  I have a veteran friend who's worked for SB for many years and because he's getting older and doesn't want to work quite as hard, his BM is coming up with just ridiculous tactics to try and make life miserable so he'll quit.  He tells me (and I believe him) that the BM is doing what he can to get rid of him so he can bring in a young hungry rep to make my friend's book more profitable for the branch.  A sunset arrangement would certainly be more compassionate, but with this BM, at least, it's all about the $$$.  That's something that it's doubtful you'll have to deal with under options 1&2.


You have most everything going for you to make it in this field...(1)military discipline, (2)maturity, and (3)enough income to help you through the first few years.  I'm assuming that you're also pretty intelligent based on your background and the thoughtfulness of your initial post, so I'm betting you'll be successful and thoroughly enjoy this business.


There...for what it's worth, are the ramblings of a man rehabbing his broken hand while under the influence of a Lortab (these things really make me talkative and energetic when I should be sleeping...).


Good luck...keep us posted...

Aug 11, 2006 10:46 am

You might want to try to get your Enrolled Agent you can do anything a CPA can do except audits. But Tax work is where most CPA 's get their money. You basically have their financial imprint by looking at their imcome tax return. You can sign up with any broker dealer but HD Vest and 1st Global specialized in working with Tax preparer. I have been in Taxes for a long time. The EA route is a lot faster then the CPA route.

Aug 11, 2006 12:20 pm

FA,


I recently started with EJ and am in the "door knocking" phase right now.  It's not fun at this point but I do believe that it's a good way to prospect.  Having never been in the military as you have, I liken it to basic training: there is a light at the end of the tunnel.


If Jones does make an offer to you, and I expect that they would, as they seem to like people with a military background, they will probably pressure you to accept.  I'd be surprised if they told you that they would hold the door open for you in the future.  However, if you are a good candidate I think that you would have a good shot in the future.  They have very ambitious growth plans and they can't afford to turn qualified candidates away if they wish to reach their goals.

Aug 11, 2006 12:55 pm

Financial Advisors do more selling and prospecting, although CPAs do there own share.  But, as an FA you have to ask people for their money.  Are you comfortable doing that?  And are you prepared to deal with the rejection from numerous prospects before you get a YES?


Don't go to EDJ unless you are comfortable with cold walking and knocking on doors.  A shares get very tiring.

Aug 11, 2006 9:46 pm

I received my "congratulations, you have made it to the next level" from SB today! I finished the tests last week and must have done o.k. on them. Now I am to make an appointment that will take approximately 3 hours for the next step. Any ideas or suggestions?


I interview with the CPA firm next Wednesday and expect a call from EDJ with the results of my background check to start my door knocking survey. I still have not eliminated any of the choices. I must admit that the draw of the FA position (especially the prestige and power of SB) is quite strong and I am probably leaning in that direction. <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


A few answers to some of the questions above:


Why haven't you interviewed at the obvious other 3? UBS, ML, MS? There does not seem to be openings at the city of 120K that I am located in.


But, as an FA you have to ask people for their money.  Are you comfortable doing that?  And are you prepared to deal with the rejection from numerous prospects before you get a YES? I will be comfortable asking people for their money...it is not like I am keeping it or ripping them off as they should earn a good rate of return and be all the better off for it. As a matter of fact, I will PM you a P.O. Box - please send me my first $500K to invest and I promise you a 8% annualized ROE! I am prepared to deal with rejection and do have some memory of selling Kirby vacuums door to door and cold calling when I was first in college. I am sure the rejections will get easier to deal with after seeing some success.


Thanks again to everyone and I will try to reply individually to many of your outstanding posts.

Aug 11, 2006 11:29 pm
FA Prospect:

I received my "congratulations, you have made it to the next level" from SB today! I finished the tests last week and must have done o.k. on them. Now I am to make an appointment that will take approximately 3 hours for the next step. Any ideas or suggestions?


I interview with the CPA firm next Wednesday and expect a call from EDJ with the results of my background check to start my door knocking survey. I still have not eliminated any of the choices. I must admit that the draw of the FA position (especially the prestige and power of SB) is quite strong and I am probably leaning in that direction.


A few answers to some of the questions above:


Why haven't you interviewed at the obvious other 3? UBS, ML, MS? There does not seem to be openings at the city of 120K that I am located in.


But, as an FA you have to ask people for their money.  Are you comfortable doing that?  And are you prepared to deal with the rejection from numerous prospects before you get a YES? I will be comfortable asking people for their money...it is not like I am keeping it or ripping them off as they should earn a good rate of return and be all the better off for it. As a matter of fact, I will PM you a P.O. Box - please send me my first $500K to invest and I promise you a 8% annualized ROE! I am prepared to deal with rejection and do have some memory of selling Kirby vacuums door to door and cold calling when I was first in college. I am sure the rejections will get easier to deal with after seeing some success.


Thanks again to everyone and I will try to reply individually to many of your outstanding posts.



Regarding your statement that I put in bold-around these parts mi amigo we don't make jokes like that.  You could get yourself as well as others in trouble posting sh*te like that.  Knock it off!

Aug 12, 2006 11:32 am

Apologies to all that I offened by my comment above...not an excuse, but it was merely meant as a joke. I could have used an emoticon to highlight that fact, but I will try to keep wise*** comments to myself...