The busienss has lost much of its integrity in the last decade.  Let me give you my take on it all:



When the banks got intot he game in the early 1990’s, it gave access to
a population of less sophisticated investors in a place where
creditibility of the “advisor” was instantanious.  This was due to
the fact they were working within the bank, a place of long standing
trust.  This, alone, would have had its own effects, but the stock
market had to grow at the une of 20-30% on its own, making us all look
like we had talent not only in sales, but also in investing. 
These things grew the number of advisors and morphed the product lines
into a situation that breeded more bad behavior.  Just when all of
this reached crazy levels, the stock market came down with a boom, and
EVERYONE was looking for blame. This brought us to where we are today:
our business now, once viewed as a noble profession, is viewed as an
overpriced service filed with sales people lacking integrity…a
situation we are slowley pulling ourselves out of.



This relates back to your question this way: Your future will not be
with the generation that held respect for our profession, and serve as
loyal clients to the seasones advisor today.  Your clients will be
the jaded boomer types that feel our service is simply not worth the
money.  To make this work for you, you will need all credentials
possible…anything to build your integrity and knowledge.  So I
say you are young, your time will be VERY WELL SPENT getting your CPA
and CFP…and don’t let alot of time pass between getting them- they
are both very challenging and some of the information will overlap.

Thanks for the response Rightway. I definitely agree with your synopsis of the situation and atmosphere of the industry these days and I am leaning towards putting my head down and just doing it. The way that I look at it is that it will be a few years of pounding the ground for several years of payoff down the road. Thanks again and take care.

Jason

[quote=rightway]



This relates back to your question this way: Your future will not be
with the generation that held respect for our profession, and serve as
loyal clients to the seasones advisor today.  Your clients will be
the jaded boomer types that feel our service is simply not worth the
money.  To make this work for you, you will need all credentials
possible…anything to build your integrity and knowledge.  So I
say you are young, your time will be VERY WELL SPENT getting your CPA
and CFP…and don’t let alot of time pass between getting them- they
are both very challenging and some of the information will overlap.

[/quote]



There is a ton of truth in that paragraph.  I am a proud member of
the Boomer generation and as such feel I can speak for it.



Our parents–the Greatest Generation–are (generally) very
uncomfortable with technology.  That is not true of their
children, the boomers.



Even if I were not a grizzled veteran of Wall Street I would not use an
advisor.  I am well educated and have the Internet where I can
find more advice than I can shake a stick at.  Additionally I can
enter my own orders and pay next to nothing in fees.



As was pointed out within the last month, explaining mutual funds to
people is not rocket science–yet that is what most of you do day after
day after day.



Consider your own parents.  If they don’t have much money they are
not what you are looking for and you may not have a frame of
reference.  But there are those of you whose parents did not fail,
and as a result they have the highly sought investable assets.



Does it make sense that a fifty-five year old man or woman who has
significant assets to invest is not going to be aware of the
Internet?  Does it make sense that they are not going to know that
there is a Fidelity, Schwab and Waterhouse office not far away?



Earlier I mentioned that Merrill is the only firm with a name that is a
household word.  That would be true among those over 60, but among
the boomers there are others–you could stand outside any office
building in the country and ask the men and women who appear to hold
good jobs if they know what Charles Schwab is and close to 100% of them
would.



Now, I understand the idea that a client is too busy with their own
profession to have the free time to manage their own investments. 
I don’t disagree with that–but more and more boomer types are becoming
aware of management fees, trails and all the rest.



They are also realizing that it doesn’t take a rocket scientist to
grasp the financial pyramid and know the differences between a growth
fund and an income fund.

don’t waste your time…this is a sales job…just go out and sell…that is your job…dont try to make it more complicated than it needs to be

JJ...you're going to get a lot of disagreement on that one.  In my experience, advanced designations can be the difference when you start talking mid-six and seven figure accounts...they aren't looking for just another salesman...they want an investment adviser...and preferably one that is certified.

Most sophisticated investors know it when they're getting a sales job...

Let me weigh in on this one.  This is an extremely difficult business to get started in.  In many ways, the younger you are, the harder it is.  Now I know it looks great.  Fast cars.  Fast women.  Big houses.  Vacations all over the world.  However, to build a durable, long-term, reliable, low stress, low liability business takes alot of experience and alot of time.  Young people have energy, brains, personal drive and great educations.  What they lack is work experience, life experience, interpersonal skills and the wrinkles and gray hair that betrays time in the crucible.

While you are young, go get some experience at someone else's expense.  Make your mistakes with another industry.  Gather experience, meet people and soak up the lessons that life has to offer.  Then, about age 28 or older, if you still really are interested in this profession, give it a shot.  The time between your graduation and starting work in this business can be spent getting a CPA, MBA, CFP or any alphabet designation.

Put, there is some wisdom in much of what you say.  However, I do believe that there is still a significant percentage of the American population who will want a relationship with a "trusted advisor".  I find that there were alot smarter people when the markets went up every year.  Now, many have swallowed their pride and ask for assistance.  There will always be room for a financial consultant who adds value to a relationship.  Pure product pushers may well be a dying breed.

For the record, I have $125 million AUM and 1,171 clients.  That's $106,000 per client.  My trails are at 22 basis points average and will move toward 30 basis points over the next five years.  I started in this business in July, 1982.  Every client receives a handwritten note on an account aggregation statement from me every quarter.  My top 300 clients receive monthly handwritten notes.  My top 600 clients receive two newsletters each month.  I telephone 100 clients each month.  I average 32 hours in the office each week and another 10 hours out of the office doing business related work for charities and civic causes.  I don't advocate that others function as I do.  It has merely worked for me.  I do not intend to retire before age 75.  I actually like this job.

Dash- congrats on an educated, productive message…

A CPA is a definite plus.  People trust CPAs.  CPAs are geeks
with calculators.  Everybody respects a geek.  We may pick on
them and laugh at them, but it’s just because we’re jealous.



As for internet stock trading, have you ever seen that in action? 
Trades execute in seconds.  It’s really amazing stuff.  On
the flipside, it’s a very efficient way for people to lose their
money.  Hahahaha.



As far as this being a sales job, it largely is.  But, it is
becoming more encompassing.  If being a CPA helps you advise your
clients (and it will), I think it’ll help keep them in the door. 
It’s about going beyond selling products to offering advice on how to
actually manage money–taxes included.



Also, being a young punk, you may want to consider being an accountant
for a while before starting a career as a financial advisor. 
Preferably a tax accountant.  Get a CPA and a few years experience
(2 - 5) as a tax accountant–high net worth clients will be banging on
your door. 



PS, make sure your pocket protector matches your tie.

[quote=inquisitive]



PS, make sure your pocket protector matches your tie.

[/quote]



Sartorial advice is very important–one never gets a second chance to make a first impression.



It is critical that your pocket protector match your socks–not your
tie.  Your hankie is supposed to match your tie, and if possible
the color of your teeth.

[quote=inquisitive]A CPA is a definite plus.  People trust CPAs.  CPAs are geeks
with calculators.  Everybody respects a geek.  We may pick on
them and laugh at them, but it’s just because we’re jealous.

[/quote]



I am not in complete accord.  I do agree that CPAs are geeks and that we respect them for their geekdom.



Where we part is as to the relative importance of being a CPA if you’re going to work in what is obviously a sales environment.



I think that a prospect would look at a broker at a place like Merrill
who had a CPA as a failed accountant.  No matter how you try to
paid a smile face on it, being judged to be a failed anything is not a
positive.



The investing public has come to realize that there is a lot of cross
training going on in the financial services world–and I suggest that
the public is far more accepting of the idea of buying their mutual
fund from the same organization that they borrow money from than they
are borrowing money from the same organization that they buy their
mutual funds.



I also believe that they are far more likely to be receptive to
investment advice dispensed by their CPA than they are to be receptve
to tax advice from their broker.



Finally another harsh reality.  It’s easier for a life insurance
type to have more credibility when it comes to mutual funds than it is
for a brokerage type to have credibility when it comes to insurance.



The reality is that stock brokers–call them what you want–are
considered to be salespeople with an axe to grind when it comes to
investing.



A mutual fund being suggested by a banker is more likely to be given
serious consideration than a mutual fund being suggested by a Merrill
rep.



And the industry is doing itself no favors by lowering the standards it takes to enter the industry.

[quote=dashampersand]

While you are young, go get some experience at someone else's expense.  Make your mistakes with another industry.  Gather experience, meet people and soak up the lessons that life has to offer.  Then, about age 28 or older, if you still really are interested in this profession, give it a shot.  The time between your graduation and starting work in this business can be spent getting a CPA, MBA, CFP or any alphabet designation.

Put, there is some wisdom in much of what you say.  However, I do believe that there is still a significant percentage of the American population who will want a relationship with a "trusted advisor".  I find that there were alot smarter people when the markets went up every year.  Now, many have swallowed their pride and ask for assistance.  There will always be room for a financial consultant who adds value to a relationship.  Pure product pushers may well be a dying breed.

 [/quote]

There is a population that will want our services.  They will be fewer people with more money.  These people will want a fee structure that will be in line with services provided, and they will be loyal more to results, and less to us.  If you are a retail advisor and want to be around for the next 20 years, you have got to 1. figure out a way to get in front of these people and 2. to deliver an exerience and results that is unique. 

1. You will get in front of thenm not by marketing direct to them, but getting to them via their other advisors (tax and legal) and business collegues...and that will require advanced designations AND knowledge (a CFP or CPA who does not know how to use a GRAT is useless).

2. You will need fewer clients, larger balances, and a business model that builds results, results, results. 

Not picking on Damp, but his business model may be challenging going forward.  He/She has enough clients to last to 75, but it is not a way to start out today. I left that model and now I have a few hundred clients, 5 people servicing them (24 touch points per year), that produces around 100 basis points per relationship.

With all of that spewed, I have the day off and am going hiking for a few hours.

Since receiving my CFP I have noticed 0 change in my clients perception nor an increase in revenue, yet, one thing it has done is given me respect among some local CPA's and attorney's and eventually I hope that will have an impact on the bottom line, the education I received in obtaining the CFP is priceless.

I think becoming a CPA first is good advice.  I started in this biz at 23 and it had its ups and downs.  It is tough, unless you look older.  I still get alot of grief about my age.

[quote=rightway] 

There is a population that will want our services. 

[/quote]

As was being discussed yesterday, the greatest transfer of wealth in the history of man is occuring at this time.  Something like 10,000 of the Greatest Generation are dying every day and most of them are leaving estates to their children, the Baby Boom generation.

The greatest generation are consumers of services that they feel uncomfortable with--accountants, lawyers and the like, including brokers.

The Boomers are far less inclined to need--much less want--to pay others to do what is actually common sense.  Most boomers are well educated, better educated than our depression era parents.  In my own extended family only my father had a degree--none of my eight aunts and eight uncles did, nor does my mother.  However among the cousins all of us have degrees except two--well, three but the third one is the only son of a multimillionaire aunt and uncle and his trust fund provides a handsome six figure income without his having to work at all.

Anyway, 10 out of 13 cousins are college educated, several of us with advanced degrees.  We, the cousins, have an email loop going to keep each other informed regarding our parents, and in so doing we can keep our parents informed of their siblings.  My point is that we're all computer literate.

Is it possible that my cousin Doug--the CFO of a listed company--is fully capable of reading research. The same research that you're reading?

How about my cousin Nancy--a teacher.  Is she capable of understanding that she can invest her money in a no-load fund and buy shares by allowing (say) Vanguard to suck $200 out of her checking account every other week?

The most successful--and busiest--of the cousins is my kid brother, the bank president.  He could allow his bank's trust department to run his money but he doesn't.  Instead his wife does--by monitoring a seven figure portfolio that is divided among Fidelity, Schwab and USAA.  She's a seasoned veteran--employing skills she learned by going to seminars and reading books whenever she had some time to kill in her role as taxi driver for four kids who are now grown.

Recently I asked her how she'd been doing and she said she had no idea because it's impossible to calculate a percentage gain.  What she's done is use the bulk of her family's assets as a pool of assets that have SMA value, and she writes straddles with no more than a 60 day horizon.  She's right, if you write options you do not actually pay for anything--so how can she calculate her percentage gain?

My point is that our parents could no more engage in a straddle writing program than they could fly to the moon--but their kids, the boomers, are far more likely to never find it necessary to pay for advice about something as mundane as choosing a portfolio of mutual funds.

[quote=rightway] 

1. You will get in front of thenm not by marketing direct to them, but getting to them via their other advisors (tax and legal) and business collegues...and that will require advanced designations AND knowledge (a CFP or CPA who does not know how to use a GRAT is useless).

[/quote]

Ah, but what to do when the traditional sources of leads--accountants and tax attornies--are themselves licensed to sell investments to that client.  Why in the world would a CPA introduce you to his clients when all he has to do to cut you out of the picture is to go to a cram course for the Series 7 and take the test.  As we all know the test is nothing--if you have a high school diploma you should be able to pass it with little or no studying and without wasting much more than a couple of hours.

[quote=rightway] 

With all of that spewed, I have the day off and am going hiking for a few hours.

90% if this business is about selling …other 10% is experience/degrees/designation



if you want to be in a business that where this is reversed, look into the investment management side to become a trader, analyst, or portfolio manager…alot of the people on this board confuse the buy side and the sell side of the business

[quote=josephjones107]90% if this business is about selling …other 10% is experience/degrees/designation



if you want to be in a business that where this is reversed, look
into the investment management side to become a trader, analyst, or
portfolio manager…alot of the people on this board confuse the buy
side and the sell side of the business[/quote]



Amen.  Look at the decision Chip Mason made–getting out of the sell side all together is very attractive.

Put-



Your right on the paying a fee for a mundane mutual fund portfolio, but
that is where it ends.  You take a wealthy exec or business owner
who’s time is 12 times more important than your entire world, they are
not keen spending their time doing “research”.  High net worth
people need strategies that are advanced.  I really don’t think
you understand, and I don’t expect you to. 



I take a Thursday off because I can.  I don’t have to prospect or
call people because I have a group working for me.  What do you
think I spend my day doing?  Calling prospects?  Asking for
sales or new money?  Several years ago I got some advanced
education, a few certifications, and proved myself in circles of wealth
and charities.  Now it has paid off.  My post was meant to
let people know that people like you are not, nor ever will be
clients…so move up the $ ladder…like I did.



Good luck tinkering with your straddles and mutual funds.  When you get some money, let me know.

Now this is a discussion that  I feel right at home with. I 
am getting ready to finish uop college  with a double major in
Accounting and Finance. I enjoy many aspects of both and have
spent  some time looking at various careers in each. I used to
think I wanted to be an accountant and get my CPA license, but have
recently changed my mind afterspending 9 months working in an
accounting firm seeing how it really goes down. The reason I say all of
this is because I have come to realize that the life of an accountant
and the life of a broker have almost nothing in common. A CPA license,
although a wonderful thing to have and worthy of all the respect
it  gets, will in no way prepare you to be a better broker. Some
brokers have CPA license, but they were accountants first.

   The biggest reason for a broker not to persue a CPA
license involves the requirements to get the license. First there are
strict education requiremnts. Most states require you to have at least
a bachelor’s in accounting with a total of 30 semester hours in
accounting classes past principles. Some require a master’s degree.
Then there are experience requirements. This entails minimum of two
years in public accounting or five years in private in most states. If
you wish to be a broker, this would be time wasted. Then comes the
exam, which takes a huge amount of devotion to pass, as it is
considered one of the hardest professional exams out there.

    Of course the only truly uniform requiremtn is the
test. Exact info, as it varies from state to state, can be found at
these sites if interested:

   www.aicpa.org



   www.nasba.org



I’m not sure that any of these certifications would help you get more
business, and almost certainly sure a CPA license wouldn’t help. From
conversations I have had with various brokers and IR’s how well your
business goes seems to rely mainly on 1.) People liking you, and 2.)
you showing them that you can make them money. Of course its more
complicated than that though.

     My main point, however, is that having a CPA
license will not improve your business, will not imrpove your skills as
a broker, and the process of getting the license could be used in 
a much more productive manner as a broker.

    I will finally say that I am not discrediting anyone
with a CPA license. The people I interned with were some of the
sharpest Iahve ever been around and some fo them could be very
successful brokers if they wanted, but they are accountants. Having a
CPA license is quitean accomplishment and puts you in a position of
high esteem as an accountant. I believe tat they are some of the most
valuable people in todfays business world and should be treated as
such.

    I will say this: One of the best accountants at the
firm i worked for was not a CPA. He could not pass the test, but he
knew the business better and put in more hours than all but the
partners. I only say that to illustrate that a license doesn’t
necessarily make you better than someone without one.

SJU-



You are young- it can only help you in this business and many others to
get both a CPA and a CFP.  It shows you are dedicated and willing
to go where most don’t.  All this talk about it is sales, sales,
sales is true to an extent, but this comes from those of us that were
raised in a different business environment.  Going forward you
will need more if you want to do real well.  Get them.

[quote=rightway]SJU-



You are young- it can only help you in this business and many others to
get both a CPA and a CFP.  It shows you are dedicated and willing
to go where most don’t.  All this talk about it is sales, sales,
sales is true to an extent, but this comes from those of us that were
raised in a different business environment.  Going forward you
will need more if you want to do real well.  Get them.

[/quote]



Having a CPA does nothing–nanda, zippo, bumpkus–to advance the career of a financial planner type.



On the other hand, it’s a great way to escape coming to grips with
adulthood–get more and more education, become a professional
student.  Meanwhile your peer group is out there working and
gaining what really matters–that nebulous something called experience.



If a young person wants to be an accountant–a perfectly wonderful
career choice–they should get a CPA designation.  If they really
want to make themselves marketable they could add a law degree.



But being a CPA does nothing on Wall Street unless you’re going to be an accountant, CFO, type.



One does not need to go to the effort to obtain a CPA in order to have
a grasp of accounting that is strong enough to hold your own in a
discussion and also know how your client is being impacted by whatever
is being suggested.



A theme on this forum is the complicated nature of what is done by
those who are hired to be registered reps.  You’re
salespeople–you are not portfoio managers, you are  not
accountants, you are not lawyers.  Your job is to locate somebody
who has money to invest and the persude them to invest it through your
firm.



You don’t need to have a CPA to know that corporate bond interest is
taxable while muni bond interest is not.  Nor do you need one to
know that debits are supposed to equal credits.



I do not have a CPA, nor do I want one, nor do I play one on TV. 
However, I have also never found it necessary to have one–it would be
fun to read why rightway thinks it’s so important.



What does a CPA know that I don’t know, that matters in the world fo
offering investment advice?  It’s not like a broker is going to
get into “Should we count gift card sales as income in the current
year, or is that sum a potential liability?  After all, gift cards
may not be redeemed in which case it’s income–but they may be redeemed
in which case they’re potential liabilities.”