Becoming a financial advisor

[SimpleLife]

I've considered recently that becoming a financial advisor would be an enjoyable job for me. I had considered HR Recruiting in the past, and it's still on the table, but I find myself geeking out on finance stuff more so than IT these days, and much-much more than HR.

I know a lot about personal finance, investing in real estate, etc. My bachelors degree is in business administration, so I would even qualify to sit for the CFP exams. Heck, in 5 months I'll even qualify to sit for the CPA exams (though I don't plan to).

Looks like the pay is comparable to entry level HR positions. No odd hours, emergencies, or project managers.

Living in a paid off house I'd still be able to save 80-100% of my money at a job like this, and that's what I would do, is just retire from IT and downsize to my paid off house and work when I enjoy it and quit when I don't.

[SimpleLife]

What are the downsides of being a FA?

[fiby41]

What are the downsides of being a FA?

You will have to deal with a lot of people who know less than you in order for you to be able to give them advice.

[SimpleLife]

What are the downsides of being a FA?

You will have to deal with a lot of people who know less than you in order for you to be able to give them advice.

Yes, however; you do this in almost every professional job. Lawyer, doctor, IT, CPA, etc. Thing is, it's relatively simple work, good hours, good pay, and easy to get into.

[Scott 2]

You'd get bored

[Lucky C]

I don't think I would be a good financial advisor because I would always want to say things like "just stop buying crap you don't need", or I would want to steer them away from the standard 60/40 portfolio and towards investment choices that most people would see as exotic/risky/complicated. But if you would be comfortable limiting yourself to "typical" / commonly accepted financial advice, and would enjoy doing that work understanding that 99% of people don't want to be super frugal or even efficient with their money, go for it.

[ether]

Have fun selling mutual funds with stupid high expense ratios

[The Old Man]

Being a Financial Advisor is more about sales than finance. I would think carefully about how you would go about getting clients.

[Treading27]

I could see becoming a financial advisor as rewarding. You just have to abide by regulatory obstacles (e.g. the fiduciary rule) more so than in the HR recruiting profession. And it could get quite competitive with newer technology, but if you don't mind working overtime (BLS shows 24% of FA's work over 50 hours a week) and can effectively gain referrals, it could totally be an enjoyable career.

Looks like the pay is comparable to entry level HR positions. No odd hours, emergencies, or project managers.

As far as the pay is concerned, it seems the financial advisor salary is quite lucrative. Of course, expect the pay to range a bit depending on where you live, but not by a lot. I would image if you "geek out" on finance related topics you'd do quite well.

Also there is a sales component to this career as firms encourage the promotion of various proprietary products (mutual funds, etfs); you'll have to balance the whole conflicts of interest issue, however, if you can successfully manage an investor's account with acceptable returns, then it wouldn't be a bad option to try out.

[Dragline]

It's the marketing aspect that I think I would hate, and especially if I had to push a lot of products I did not believe in. I think that the financial services "business model" is often at odds with doing the right thing by the client, and is just more about selling than advising.

But I do find the field quite interesting, because its actually one that is not very old (only decades) and has undergone massive changes in my lifetime.
You should listen to the Michael Kitces podcasts on this, which are actually directed at financial advisors and how they run their businesses. It's relatively new and very informative. Start with the first one. See https://www.kitces.com/blog/category/21 ... s-podcast/

You can also read up on this at the Think Advisor website, and subscribe to their emails if you are interested in what people in that field really think about and find important.

[suomalainen]

A couple reactions:

1) as others have noted, your value proposition as an FA is questionable. Some will see this as a moral/ethical issue (i.e., whether you agree with the pending fiduciary duty rule or not, the fact is that it is a response to perceived bad actions and/or incentives in the industry). Regardless of how you feel about the ethical question, the value proposition is "questionable" because in my mind, any consumer can read a book or two to get the same benefit. Or use a "robo advisor". If you're THAT good at stock picking, you wouldn't be working retail. And if you're not that good, then maybe you are easily replaceable and therefore job security / career prospects aren't great? On the other hand, if you're great at selling lemons to suckers, you could make a killing (but see, ethical question above...)
2) you'd be working retail. It's not the Gap, but it's not far off. Grain of salt - I hate working with idiots. I prefer proper villains - one reason I prefer working with my professional clients even if I could maybe make more money / have more flexibility working with a more diverse retail client base (diverse in terms of what legal problems they would have and what their approach would be). I am fairly narrowly specialized in finance/investments.

[Stahlmann]

Is there some position in the realm of financial planning/coaching which doesn't involve having interaction with people?

[WFJ]

What are the downsides of being a FA?

FA are salesman. Sales are usually easiest for people 10 years older/younger than the salesman and from similar socio-economic backgrounds.

Sales is a grind and except at the highest level of finance ($20 mil+ AUM) the advice/value provided by the salesman is limited to simple products and services. As mentioned above, the moral obligation of doing what is best of the client and what is best for the firm is messy, Fiduciary does not protect the individual from a bad selection offered from a firm.

Average salary is highly skewed as a few financial advisers make a lot of money and most don't make much money.

[WFJ]

Is there some position in the realm of financial planning/coaching which doesn't involve having interaction with people?

Research or develop Fintech app.

[Crusader]

Being a fee-only financial advisor that charges "a lot" of money per hour on a part time basis would be one of my ideal semi-ERE jobs. But, last time I checked, in order to become a certified portfolio manager, you need 4 years of full time work and you need to build your client base from somewhere. When I tried to educate my friends for free about financial investments, saving money, etc, nobody was really too enthusiastic, so I am not really confident that I would be good at keeping and maintaining clients. I've also seen my fair share of finance bros at local business networking events to know that there is a lot of flashy competition.