Less competition going forward, is a good thing. The barrier to entry is mind boggling. The next bull market will eventually change that, but that's not going to be for at least 5 yrs or so. By then, I'll be nearly 25 yrs in, and growing by acquisition. In the meantime, do the right thing for clients, manage risk, get referrals, expand the social network, keep expenses and expectations low...

Excellent topic and link. Being an FA is like being a farmer - if you're a small shop, you have to be smart and diversify and be patient ( grain, chickens, your own vegetable plot to trade at the farmer's market in the city).

It's best to learn from an existing producer.  

Big grain producers are more subject to boom and bust, and the whims of: weather, overproduction, who owns the railroads, controls the capital and the futures markets,  the reputation of tainted eggs and beef, and so on.

You can just walk in a get a job driving tractor or picking fruit.

For those with talent, it's hard to find a level playing field. The things that make it uneven come from both government and big business.

There's still a bright future for the small guy, and a lot of the satisfaction can come from being small and being in control of your own life.

In general, Americans need to start figuring out how to own the land, the means of production.

Interesting.

Thanks for sharing.  

why this job is a ton of fun

Question: is everyone who is affiliated at a b/d insurance licensed?

( Life, disability, long term care, annuities?)

I'm going somewhere with this question  for new reps.

[quote=tenthtee]

Question: is everyone who is affiliated at a b/d insurance licensed?

( Life, disability, long term care, annuities?)

I'm going somewhere with this question  for new reps.

[/quote]

No. There is no requirement to be insurance licensed (unless your B/D wants you to be).

[quote=BigFirepower]

Less competition going forward, is a good thing. The barrier to entry is mind boggling. The next bull market will eventually change that, but that's not going to be for at least 5 yrs or so. By then, I'll be nearly 25 yrs in, and growing by acquisition. In the meantime, do the right thing for clients, manage risk, get referrals, expand the social network, keep expenses and expectations low...

[/quote]

It's a good point.  But I disagree with the premise of the article.  Just look at the literally THOUSANDS of FA trainees that pass through the doors of B/D's every year.  Unfortunately, maybe several hundred per year make it past a few years.  The problem is not the DESIRE to become an FA, it's Wall Street's entire method for recruiting, training, and developing the new talent.  OK, partnerships, sunset programs, Jones "Goodknight Plans", and other partnering-type programs have helped somewhat.  But it is one fo the few professions/sales jobs in the world that operates the way it does (no client base, no "territory", and literally hundreds of thousands of other competitors).  Think of it this way...how many professional sales people would take a job selling something where there was not some sort of baked-in buyer/territory/client base, and where your primary customer is not even a business?  It's insane. 

When (if) the big B/D's ever figured out hwo to really keep their talent and bring them along, the industry would be VERY different.

I get trainees in my office every week, after they go through 2 interviews, then I meet with them. I go through everything w/ them (ie: potential, requirements, the good bad and the ugly)...

It seems more and more they don't last a week if even that.

I am talking about people that 2 days earlier said, "This is what I want to do, I have been wanting to do this since I was a little kid. Please give me a chance, oh Please...!"

I am not kidding, people begging and then a week later...no shows, they call and say they are going back to school, working for their Dad, some excuses are worse.

When I got into this business I practically paid a firm to let me work there....

There is little to no respect for our business from these morons out of college, and the work ethic of the new genreation is pitiful... "I have a college degree pay me 60k a year. BTW what is prospecting...?"

It's not that no one that wants to be a Financial Advisor, but there is less interest than there used to be. My guess is that it is the gloomy outlook for the stock market and the future that is holding people back. And it is probably tough to get started right now.

Here is another article:

http://blogs.wsj.com/financial-adviser/2010/08/17/edward-jones-has-trouble-with-growth-goals/

Seems Edward Jones is having trouble finding new people to run into the machine gun fire.

[quote=B24]

[quote=BigFirepower]

Less competition going forward, is a good thing. The barrier to entry is mind boggling. The next bull market will eventually change that, but that's not going to be for at least 5 yrs or so. By then, I'll be nearly 25 yrs in, and growing by acquisition. In the meantime, do the right thing for clients, manage risk, get referrals, expand the social network, keep expenses and expectations low...

[/quote]

It's a good point.  But I disagree with the premise of the article.  Just look at the literally THOUSANDS of FA trainees that pass through the doors of B/D's every year.  Unfortunately, maybe several hundred per year make it past a few years.  The problem is not the DESIRE to become an FA, it's Wall Street's entire method for recruiting, training, and developing the new talent.  OK, partnerships, sunset programs, Jones "Goodknight Plans", and other partnering-type programs have helped somewhat.  But it is one fo the few professions/sales jobs in the world that operates the way it does (no client base, no "territory", and literally hundreds of thousands of other competitors).  Think of it this way...how many professional sales people would take a job selling something where there was not some sort of baked-in buyer/territory/client base, and where your primary customer is not even a business?  It's insane. 

When (if) the big B/D's ever figured out hwo to really keep their talent and bring them along, the industry would be VERY different.

[/quote]

Well said!

great article. there are also good comments if you click "show comments" at the bottom.

ive been doing this for a couple years, and right out of the gates i said to myself... wow... why are there SO MANY ADVISORS. if you drastically cut the number of advisors, nationwide & firmwide, investors would be walking in the door. they'd return your phone calls. they'd actually follow up on the literature you sent out last week.

i mean jesus, hair salons have a great demand than financial advisors do. they're cutting hair yet generate a ton more phone calls and walk ins, yet we're managing peoples' nest eggs.

its a funny business.

GHGR, I remember when I started my career, up in Alaska. One of the Sr. guys, said that when the office was opened in the early 80s, people would get in the elevator, ride up to the top floor with a check. There was a time, in the early 80s, when indeed there were a limited number of reps. The worst I've seen in this biz, was in the late 90s, when I began to wonder if 7-11 wasn't about ready to start licensing their clerks.

In 2002 the head count began to really shrink, as folks just couldn't hang on any longer, and real estate instead was the magical way to make money. Those job hoppers went from securities, then real estate.... Now, I wonder where those follow the money types will go next?

After the 2003 National Do Not Call list came into play, I'm not sure why any firm bothered with the typical trainee program? The only real, and logical way for our business to grow in a responsible scale, is the Sr./ Jr. model. IMHO, I think Ed Jones does itself a huge disservice in hiring too many reps, and creating a culture of more failed reps, than successful ones. My only knock on Jones.  

oh i absolutely agree with the sr./jr. model. thats the way it should be done. think of the selection for that position too. you'd get to hire only one person for the jr. role. when the sr. retires, the jr. should be a perfect match for replacement. and the cycle continues.  - btw, this is NOT a goodknight replica. a goodknight is usually a slap in the face. you get the worst possible clients and higher expectations, then you have to live like you were GIVEN something. that's the worst.

there are plenty of us who have been hired lately who are great fits for this industry. it's the business model that's broken.

come to think of it, the model is broken for the advisors. not the GPs. the model is very profitable for the firm. its a green machine.

Are new Jones reps insurance licensed? And what about new hires at Merrill, for example? Maybe this is the area where our industry is failing to build the next generation. If you are going to call yourself a financial advisor, and can't sell insurance when you start out, how are you going to feed yourself?

ML requires all incoming FAs to get licensed in insurance and securities.

About how much insurance do new ML or other b/d FAs sell, as a percentage of first year GDC production?

I've sold one VA that represented about 2% of my 1st yr PCs.  Other than that I havn't done any insurance work and I do not know many if any at my level doing insruance selling.  ML's training pushes annuitized business in the form of MFA, MLPA, PIA (if partnered).  I just do not feel comfortable enough to sell an insruance product  without the help of a sr fa, and the VA happened because the client wanted guaranteed income for life and rates of return were not an issue, I sold peace of mind.

Right, and the Sr. FA likely could care less about insurance, with some notable exceptions. This is where new advisors are being screwed out of the industry. Being screwed, or screwing themselves out. We can all likely share some blame on our attitude about the importance of insurance, on many levels.

So thanks for your honesty, Bull. But let me ask you, how can you call yourself a financial advisor is you are uncomfortable with insurance? I don't mean that personally - learning this biz is like trying to drink from a fire hose. I'm just saying, the "victims" are first the client, second the FA.

What  happened was, the industry got fat and lazy, picking up money when it was easy. And now, insurance it is obvious for many reasons that insurance is the key, starting with core financial planning (service) competencies.

To use the analogy of deer and hunting, you have an entire herd down a path, and at the end only a few deer remain.

In fact, some of the trainers are actually shooting at the deer pack and eating the trainees.

From the main path, there are little deer paths that penetrate deep into the woods. The best survival tactic is to get off the main path as soon as possible.

This happens to be good for both you and your clients, not so good for the hunters.

That is why it is called the thundering herd, but lately it is seldom heard from - you have to think outside the box.