Evaluate my Plan

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Apr 17, 2008 9:03 pm
Apr 17, 2008 9:32 pm

You can learn all you want about different investing strategies, but if you do not know how to talk to clients and prospects, you will fail starting out as an independant advisor.


You are to be commended for getting some related work experience under your belt, but IMO I would then look at the wires or a top notch insurance agency.  Keep your goal of $150k liquid, but learn the ropes as an FA before you go out on your own.  You'll get sales experience and you'll get a salary while you get indoctrinated.  As an indy you're on your own.  And that is a dangerous thing.  Good luck.
Apr 17, 2008 9:42 pm
Apr 17, 2008 9:55 pm

Buying an office does not eliminate the "salesman crap".  If you were to be able to buy a practice (a decent one will fetch far more than $150m) you still have to sell clients on you continuing as their adviser.   Once this is accomplished, until you have their trust, every call is a sales call.  Then you still have to convince (still selling but much easier) clients on any new ideas.  In addition, you would have to sell yourself to an existing broker.  You make it sound so simple to purchase a practice.  It is not.  Advisers have a relationship with their clients and you would have to make the selling broker comfortable that you would take care of his/her clients.  Selling a book to a 30 yr old with call center experience?  Not likely.  Go out and get a job for a few years, make some contacts.  Or, better yet get a commissioned sales position for a few years then start out at a firm and build your own book.

Apr 18, 2008 8:05 am
financeguy:

But why not just save up enough to buy an existing practice and avoid a lot of the startup sales bs.  By buying an office, I would already own a book and have a very solid base and practice to take over.  Plus I have no ties to staying in a particular area, so i would have the opportunity to find an amazing opportunity anywhere in the country.  So knowing this, does your evaluation change?  I really dont want to be a salesman.  I want to give advice and help people while avoiding all of the salesman crap that goes on in this industry.


Financeguy, if you hate selling as much as you indicate, you would be miserable in this line of work.  Success requires various skills but none more important than being able to find and attract clients.  That is called sales.  If you find that "bs" or a lot of "crap," this is not the right field for you.  Nothing to be ashamed of - there are many good jobs for those who hate sales.  This just isn't one of them.

Unfortunately the idea of bypassing all the sales bs by buying a business is not exactly novel.  For every seller of a decent business or book, there are literally hundreds of interested buyers.  And beside offering the right $, guess what you need to do to convince the seller that you - from among all other bidders - are the best buyer?  Yup, you gotta sell him on you.  There's that ugly word again.

There are a number of jobs in the investment field that don't require sales skills.  Have you explored any of them?

Apr 18, 2008 8:15 am

financeguy, if you want to learn the ropes, go take a sales job and learn to sell.  If you don't want to sell, don't become a broker.  Sales skills will determine your success.  Sales skills combined with knowledge will determine the success of your clients.  Knowledge without sales skills will cause you to always be underpaid and will stop your clients from taking action. 

Apr 18, 2008 9:48 am
financeguy:

But why not just save up enough to buy an existing practice and avoid a lot of the startup sales bs.  By buying an office, I would already own a book and have a very solid base and practice to take over.  Plus I have no ties to staying in a particular area, so i would have the opportunity to find an amazing opportunity anywhere in the country.  So knowing this, does your evaluation change?  I really dont want to be a salesman.  I want to give advice and help people while avoiding all of the salesman crap that goes on in this industry.

 
How many clients do you plan on retaining?  When you buy said book of business and you sit down with the clients, what do you say?  Why would a client, presumably with loads of confidence and trust in the departing advisor, want to stay with someone who has zero experience as an FA and doesn't know you from Adam?
 
I ask not to be a prick, but this is EXACTLY what will happen in your senario.  Your answers will determine your success.  And from what I know (which, admittedly isn't much) your experience NOT SELLING will lose you those clients.
Apr 18, 2008 10:48 am

Financeguy,

 
What's your story? In one thread you indicate that you were employed with Jones about 2 years ago and left before KYC.  Now you're rejoining the securities industry as a financial advisor in a role non-sales related. In this thread you indicate that you are fresh out of college and are 22. Are you telling us Jones hired you before you ever graduated college? Really, what's your deal?
 
That aside...if you don't want to be in sales, then purchasing a practice/book of business is not for you. I'm not even sure being a financial advisor is right for you. No matter what you do, it's a "sales" job...if you're not selling a product, you are selling yourself and your recommendations. Hate to break it to you.
Apr 18, 2008 10:49 am

Financeguy, you sound like a 22 year old with his head up his ass.

 
You won't get any of the needed experience working at a call center.
 
To give advice, you need to have someone to give it to. Here's a clue, those people are called prospects. Write it down. It will become the most important word in the dictionary. It takes a lot of well planned, highly organized sales BS to get prospects and to turn them into revenue generating clients. And speaking of clients, unlike the call center business model, you'll need to use sales BS to keep them as clients.
 
If you fail to prospect your career as a business owner will be short lived and you'll be back at the call center. Attrition will take it's toll on your revenues as you gross less and less every year. People die, people move away. The competition will be taking big bites from the practice run by the guy who only wants to give advice. It's so unfair!!!
 
Of course you could hire reps to sell for you. Usually, if the leader can't do the job, they can't lead. It's problematic. Imagine your supervisor at the call center  being a wired in relative of the owners and not able to do the job. Yet, this person who knows nothing, not only expects you to do the job, they demand it. How well would that work for you?
 
Your price of $150k might buy you a business someplace, but it won't be much of one. Want a dream biz? The price will be at least 5 times that amount and most likely much more.
 
I'll give you some room for being a dumb kid. And I'll give you much credit for having more of a plan than many 22 year olds. But, I have to say, somewhere in your research on this business you missed something big. This is a relationship business. Those who do best here are those who love the people aspect of the biz. They don't look at the sales aspect of the business as sales BS. Instead they imbrace it. If you don't like sales then you need to look elsewhere.
 
 I recco you get a sales job first. Work as a bag salesperson. That is; someone who drags a bag with them on sales calls. Copier sales, medical equip, Pharma sales come to mind. These are all good training grounds. As would be working for two years as a salesman for a high end car dealeraship. That will give you all the sales training you will ever need. Plus $150k a year from year two forward. From there, the advice to get hired on at a wire is excellent.
 
Yeah, it's the sales thing. You may not like it, but likely you haven't tried it. And likely, you have a poor view of salesman. If you are serious about buying a practice give sales a shot. By doing so, you'll at least understand what you are getting yourself into. And it will give you respect for the part salespeople play in the business process.
 
 
Apr 18, 2008 12:20 pm

At 22, it doesn't really matter what you do.  Get some experience being successful at anything and save some $$.  Come back when you are 30, and preferrably balding and a little heavy around the middle.  As long as you look like their grandson who is still in high school, you will have a rough go getting anyone to trust you with their money.

 
Sales experience is best, by the way.
Apr 18, 2008 1:07 pm

Biggest mistake people make when entering this field is thinking this business is more about picking good investments and setting up great plans.  It is all about selling yourself.  If you have no desire to "sell," and would prefer to analyze there are plenty of jobs in the finance field which do not require customer schmoozing.

Apr 19, 2008 4:38 pm
Apr 19, 2008 6:11 pm

(that has been watered down by inexperienced advisors )

(in the call center I am considering working at, I will have the opportunity to work within specialized groups, ie, a group that specializes in clients with over $2 million to invest.  Another group I will have the opportunity to work in is asset allocation for existing clients as well as opportunities in our options group)
 
So you are looking to become what you are criticizing?  Which call center is this?
Apr 19, 2008 6:26 pm

This business is filled with brokers who paid their dues with massive amounts of calling, door knocking, seminars, and so on.  Yes there are times that success can be had off others, but for the most part if you do not pay your dues you will fail.  As with any other business, their are good brokers and bad brokers.  For someone as young as yourself who quit in training to say our business is watered down by unethical brokers if offensive.  Get out and make 300 calls a day for a year then post your opinion.  You want an evaluation, you are searching for the easy way to success.  You do not want to put in the sweat equity that so many on this board had to endure.  If you hate door knocking or cold calling, do seminars.  What I keep seeing as I read your post is "I don't want to build it".  An existing broker with a book of business is highly unlikely to sell his book to someone who did not build their own practice and only worked in a call center.  You can know everything there is about HNW clients, options or anything else.  First and foremost, this is a relationship  business.  If you cannot relate to people, it does not matter what you know.

Apr 19, 2008 6:45 pm
Apr 19, 2008 7:20 pm

You were told in this business you work very hard for little pay for 5 years, then you do little work for alot of pay for the rest of your life.  You want to skip right to the second part.  I get it. 

Apr 19, 2008 7:37 pm
financeguy:

Fresh out of college.  I think I am going to work in a call center environment for a few years where I can learn the ropes, get my cfp, learn the ins and outs of being a broker in different departments including options, active trading, asset allocation.  After about 5 years and savings of 150k, I would like to buy my own independant practice by the time I'm 30.  Im currently 22.  Good idea? Please evaluate my idea and tell me how realistic this is.


OK, financeguy, you've asked people to tell you how realistic your plan is.  The clear answer you have been getting from people with actual experience in doing what you dream of doing is that your plan is extremely unrealistic. In fact, the more you elaborate and clarify the more obvious that becomes.

Listen, financeguy, no one wants to be mean or pop your bubble.   Really.  We were all once 22 with no experience.  But we wouldn't be doing you any favors at all if we just told you what you wanted to hear - that your 'plan' is a sound one, when it isn't.  The problem is you can't build a sound plan on false premises, assumptions and hopes instead of reality. 

The good news is so far you've lost nothing but perhaps a little pride.  If you take the feedback you've received here seriously and do some soul searching, you will have a better chance of setting realistic goals and plans based on reality as it is, rather than as you would like it to be. 

Or you can write us all off as a bunch of stupid salesmen. 

Your choice.  Your plan.  Your life.

Good luck.

Apr 19, 2008 7:54 pm
Morphius:


OK, financeguy, you've asked people to tell you how realistic your plan is.  The clear answer you have been getting from people with actual experience in doing what you dream of doing is that your plan is extremely unrealistic. In fact, the more you elaborate and clarify the more obvious that becomes.

Listen, financeguy, no one wants to be mean or pop your bubble.   Really.  We were all once 22 with no experience.  But we wouldn't be doing you any favors at all if we just told you what you wanted to hear - that your 'plan' is a sound one, when it isn't.  The problem is you can't build a sound plan on false premises, assumptions and hopes instead of reality. 

The good news is so far you've lost nothing but perhaps a little pride.  If you take the feedback you've received here seriously and do some soul searching, you will have a better chance of setting realistic goals and plans based on reality as it is, rather than as you would like it to be. 

Or you can write us all off as a bunch of stupid salesmen. 

Your choice.  Your plan.  Your life.

Good luck.

Apr 19, 2008 7:56 pm

Great points, as I myself being a doorknocking rookie the advice and perspective in this post have been insightful.

Apr 19, 2008 8:10 pm