Should I become a Financial Planner for Waddell & Reed or Edward Jones?

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Sep 11, 2010 12:01 am

Hello all, I just finished my finance degree and I've got interest for Financial Planning positions from both Waddell & Reed and Edward Jones.  I'm conflicted about which firm I should go with. 

At Waddell & Reed I would be a 1099 contractor vs. an employee, which I assume means I can take my clients with me if I leave the firm, while at Edward Jones I've heard they do everything they can to keep your clients if you leave or get fired.  On the other hand, almost everyone has heard of Edward Jones due to their marketing, while almost nobody has heard of Waddell & Reed, so the Edward Jones brand would give me more credibility.  I'm turned off by the relentless door knocking required at Edward Jones, but it seems like Edward Jones offers a more substantive training program.  Waddell & Reed only offers mutual funds, not individual stocks; is this a handicap for a starting financial planner?  Will Waddell & Reed require me to sell their mutual funds over competitors, such as Vangard?  What kind of support would I be getting from either firm that would justify their chunk of my commissions, instead of just starting out as an independent financial planner and keeping everything I make for myself?

Any and all advice/suggestions/recommendations/information is greatly appreciated, thank you!  If you work for either firm, please tell me about your experiences!    

Sep 11, 2010 2:21 pm

Waddel is a mutual fund shop.  I have never seen a statement from Waddell with anything in it other than Waddell funds.  Would you want your own assets to be limited to just mutual funds from one company?  FYI The odds of you making it in this industry are minute.  When you are fresh out of college you look it, and act like it.  How many 60 year olds are going to trust their life savings to a youngster fresh out of college?  Even they thought very highly of you, they would be very wary of handing over their account. 

I suggest you go work in the industry in some sort of back office position to learn more about the industry and gain more life experience.  Late 20s or early 30s with experience in the industry is a better alternative than starting at 22 with no experience...When you do start in the industry, no matter where, you are going to have to be rejected countless times every day before you will ever succeed, so if the idea of knocking on doors with Jones lacks appeal, you should reconsider the profession.

Congrats on finishing your degree!

Sep 11, 2010 3:37 pm

I'm in my early 30's and I do have lots of work and life experience, but none in the financial industry.  I went back to school with an eye on getting into the world of finance.  Does Waddell & Reed really force you to only sell their own products?  Thanks for the response!

Sep 11, 2010 9:24 pm

If those are your only choices--Jones.  The real answer is to look for a third choice.

Raymond James/Wells Fargo Advisors/Stifel Nicolas would all be much better.

Sep 11, 2010 9:38 pm

[quote=Wookie]

I'm in my early 30's and I do have lots of work and life experience, but none in the financial industry.  I went back to school with an eye on getting into the world of finance.  Does Waddell & Reed really force you to only sell their own products?  Thanks for the response!

[/quote]

They have around 6k funds to choose from other than Ivy and W&R funds - but one of their core products, I forget the name of it, limits you to Ivy and W&R funds. They will likely enjoy you more if you push this product to your clients - but on paper you have options.

Sep 12, 2010 4:42 pm

It is almost impossible to start out independent,

 I found out the hard way, Started my own RIA Without any prior experience,

In a short time I was totally lost, And not making money,

The biggest challenges are,

NO roadmap who your market should be, What products to sell, Case design, Etc,

Since then I have partnered up with a successfull Planner as his assistant doing paperwork Etc.

He also lets me do my own business through his firm, I couldnt be happier making a wage learning the business,

If you can find that kind of gig I would recommend it as the best way to start out.

Sep 13, 2010 10:57 am

I agree with Ambitious. Find a seasoned Advisor/Planner who is operating independently and tell him/her your story. Make sure you have plenty of cash laying around to back-up your lifestyle. You have very little chance ob being successful right away………no matter where you start. Waddell is a chop-shop and they will want you to promote / sell their proprietary funds. Even If you use their managed money platform, it is only Ivy / Waddell funds……which are, for the most part, the same funds anyway.

Jones seems to have a pretty good training platform but I do not know where they stand on planning? It seems that in my town, none of the Jones reps do planning. If planning is your intent, I am not sure they are the right fit for you. I would ask a current Jones rep that isn’t doused in the kool-aid what they think.

Find a seasoned mentor and learn from them. Call planners in your area and just ask them for a few minutes of their time. The ones who give you time are going to be your prospects. Sit with them and listen. Ask them how they got started and what they would do different. That type of information is priceless.

Good luck. It is a tough business but worth the effort.

Sep 13, 2010 12:55 pm

With respect to Waddell & Reed - see my previous posts on that company.  A simple search ought to bring them up for you.

Sep 14, 2010 3:35 pm

Thank you all for your advice; I've applied to more firms to increase my options, and heard back from MetLife about an interview.  Would MetLife be a better place to get started as a Financial Planner than Waddell & Reed or Edward Jones?

Sep 14, 2010 3:49 pm

why would you want to get into this business

Sep 14, 2010 4:01 pm

You finished a degree in finance, but you apparently don't know much about our industry. Either your educators were lacking, or you haven't done your homework for a good number of years, and you've essentially waited until the last minute. Well, at least you're doing something now, but I'd say you're behind the curve. Be careful going forward, this biz is tuff enuf under the best of circumstances, and these aren't exactly high times.

Sep 14, 2010 4:13 pm

GET OUT YOUVE GOT TO GET OUT

Sep 14, 2010 4:29 pm

[quote=gethardgetraw]

why would you want to get into this business

[/quote]

Because I want to help people achieve financial security while making a lot of money in the process.

Sep 14, 2010 4:30 pm

[quote=BigFirepower]

You finished a degree in finance, but you apparently don't know much about our industry. Either your educators were lacking, or you haven't done your homework for a good number of years, and you've essentially waited until the last minute. Well, at least you're doing something now, but I'd say you're behind the curve. Be careful going forward, this biz is tuff enuf under the best of circumstances, and these aren't exactly high times.

[/quote]

I don't know a lot about the industry yet, as I only recently decided I wanted to go in this specific direction.

Sep 14, 2010 4:43 pm

Do you have any sales experience? If so, what, how long, how successful?

Sep 14, 2010 5:47 pm

[quote=BigFirepower]

Do you have any sales experience? If so, what, how long, how successful?

[/quote]

I have a year's worth of experience selling high-end home theater setups, and I was extremely successful at it.

Sep 14, 2010 5:54 pm

Define "extremely" successful.

What did you like, dislike about doing that? 

Sep 15, 2010 1:12 am

[quote=BigFirepower]

Define "extremely" successful.

What did you like, dislike about doing that? 

[/quote]

I was the top salesman on the team every month of the year, and in some months I met the entire business' quota on my own.  I loved the thrill of closing a $4,000 sale, and getting return business from customers that trusted me, but I hated that I wasn't getting compensated fairly for my production (bonuses were not paid out on an individual basis).

Sep 15, 2010 10:44 am

[quote=Wookie]

[quote=BigFirepower]

Do you have any sales experience? If so, what, how long, how successful?

[/quote]

I have a year's worth of experience selling high-end home theater setups, and I was extremely successful at it.

[/quote]

You were selling  a product to people who wanted to buy what you were selling.  Being a financial advisor, or a stock broker for that matter, is a completely different ball game.  High end home theater systems are a minor purchase for people who are audiophiles.  They'll spend $4000 on something like that because they can see it, feel it, and hear it work instantly both in your store and in their home.  Unless you were working in someplace like Best Buy, those people know that in order to get a great home theater system they have to work with someone better than, well, Best Buy.  There may only be one or two trusted stores in an entire metro area that people would just walk into and drop $4000. 

Investments/Planning is absolutely different.  You have a service to sell.  Sometimes a product.  They can't touch it, see it, or even see the results of your work for, in some cases, decades.  You're selling a theory.  Theoretically you can look at AT&T stock and see that they have raised their dividend for the last 10 years and assume they'll keep doing it.  Well, theories are great until their disproven.  To quote Robert Burns "The best laid schemes o' Mice an' Men, Gang aft agley,An' lea'e us nought but grief an' pain, For promis'd joy!"  Yes, you might have to pull out your English Lit book to decipher that one. 

So, don't assume that your selling of HDTVs and expensive speakers will immediately translate into success in this business.  It'll help that you've sold something to someone, but it's not quite the same thing.

 

Sep 15, 2010 12:35 pm

Investments/Planning is absolutely different.  You have a service to sell.  Sometimes a product.  They can't touch it, see it, or even see the results of your work for, in some cases, decades.  You're selling a theory.  Theoretically you can look at AT&T stock and see that they have raised their dividend for the last 10 years and assume they'll keep doing it.  Well, theories are great until their disproven.  To quote Robert Burns "The best laid schemes o' Mice an' Men, Gang aft agley,An' lea'e us nought but grief an' pain, For promis'd joy!" 

Great post worth remembering.

The environment has changed, people used to have to come stock brokers to buy stock. This is more about leadership.

Which program ends up putting you in a stronger leadership position in the community, Jones or W&R?