Any Financial Planner Mustachians? - Career Change Advice

[rageth]

I'm currently an educator and while I love the 8:30-3:30 part of the job, all of the before and after parts coupled with the increasing pressures of the job, eroding benefits and lack of reward for hard work has me considering a career in financial planning. Although I avoid financial planners for my own retirement accounts, my interest in FIRE and finances has me wondering if managing others' money would be a better fit.

If there are any FP Mustachians out there I'd love to hear about your experiences and any advice you might be able to gleen. I'm looking at researching potential employers to sponsor my Series 7 and Series 63 coursework during this next year and take a sabbatical from teaching to try out financial planning. If I enjoy the work, I'll move to it full time to hopefully FIRE faster, if not, then I can always go back to teaching.

[jennifers]

I was thinking about this the other day too.  Wondering what kind of training / certifications are needed to become a legit financial planner.

[frugaliknowit]

The career field sounds like fun, as long as the employer provides good leads.  If it's all about "cold calling" and developing your clientelle without help (pure sales), I'm not interested.

[startingsmall]

I've also considered some sort of financial planning role as a second career.... either in a non-profit role (credit counseling, etc) or working as fee-only financial planner. I recently saw the XYPN podcast mentioned here on MMM... I listened to episode #13 (The Career of Matt Becker) the other day and it definitely has me intrigued. He switched from software to financial planning for new parents, using a personal finance blog to get things started.

It isn't something I'd want to pursue until I was at/near FI, because I don't want to feel pressure to do it "for the money," but it's definitely something that I consider as an option for someday down the road.

[Bicycle_B]

The career field sounds like fun, as long as the employer provides good leads.  If it's all about "cold calling" and developing your clientelle without help (pure sales), I'm not interested.

When I investigated such jobs, we-pay-you-to-beat-the-bushes-but-it-only-lasts-if-you-make-sales was the common thing, plus the available jobs required selling products with high customer fees.  Not for me; YMMV.  +1 re Vanguard.

I have a friend who did find a job with a small well-established firm that keeps its fees to a low-for-the-industry 1% for typical clients.  He was a CPA first, though. 

My other CPA friend who was interested in financial planning investigated, then went into another field.  Her comment was "It's great if you have a client with $20 million, but not otherwise."

PS.  There is a forum member sharing her adventures in starting a financial advisory practice.  Have you read MonsterMonster's journal?

[rageth]

The career field sounds like fun, as long as the employer provides good leads.  If it's all about "cold calling" and developing your clientelle without help (pure sales), I'm not interested.

When I investigated such jobs, we-pay-you-to-beat-the-bushes-but-it-only-lasts-if-you-make-sales was the common thing, plus the available jobs required selling products with high customer fees.  Not for me; YMMV.  +1 re Vanguard.

This is my exact fear.  I don't want to have to feel like facepunching myself by getting people to buy products that are good for me, but bad for them.  Vanguard, Fidelity and Schwab would be ideal, but I know a guy at Waddell & Reed who might be able to help me just get my foot in the door.

I was thinking about this the other day too.  Wondering what kind of training / certifications are needed to become a legit financial planner.

On the investing side of it, from what I've been able to gather it's the Series 7 and Series 63.  From what I've heard, the Series 7 is a killer and the 63 is nothing comparatively.  It's something I'm looking into, though.

Like I said, I'm currently a teacher, a male, 1st grade bilingual teacher with a masters, so I'm essentially a unicorn.  I could walk into any district with a bilingual program and have a job tomorrow if I wanted it.  The district that I'm currently at would likely let me take a sabbatical for a year during which I could give the financial planning a go and decide at the end of the year.  That kind of flexibility is nice, but I'd want to be able to start working in the field and earning the day I'm done teaching meaning that I'd need to sit the Series 7 and 63 exams in the spring.

[Lance Hiruma]

I personally would not. The future of this field is AI.

[Bicycle_B]

Isn't there a difference between "selling securities" and "financial planning"?  Series 63 and 7 qualify you to be registered securities agent but not per se a financial planner, right?

This Forbes article discusses some of the differences but may be out of date due to implementation of Dodd Frank... or not, depending on current politics... please research!

https://www.forbes.com/sites/investopedia/2013/03/20/differences-between-stockbrokers-investment-advisors-and-financial-planners/#bdaed6739f22

Would a Series 65 exam be more in line with your goals than Series 63?

Would you prefer to be a financial planner, unlicensed (you can do this now, if you're careful...I think) or licensed (become a Certified Financial Planner)?

http://www.letsmakeaplan.org/choose-a-cfp-professional/find-a-cfp-professional
https://www.cfp.net/

[Frugancial Advisor]

I'm a Certified Financial Planner and Mustachian!

I think the biggest advice I can give is that there is a huge difference between a Fund Salesmen and a Financial Planner. When you're starting out, you do have to be proactive in obtaining clientele. However, if you work with a large, reputable company, you should be provided with referrals (clients who need a financial plan).

I can say I am 100% happy with the service I am able to provide to my clients. I am not incentivized to sell certain products, I can use both indexing or active management strategies, and to be honest I focus more on the other components of financial planning than just investments: retirement strategies, estate planning, tax planning, risk management, incorporating, trusts, income-splitting, etc.

It's a very rewarding career if you manage to get into a 'Financial Planner' role and not an 'Advisor' who is paid just to push product.

[nawhite]

I've looked into being an independent fee-only financial adviser and tax preparer in Colorado for friends and family as something to do during the winter as a part time job/hobby. I didn't want to work for another firm which would have put it solidly in the "job" category and prevent me from giving people advice from breweries, so I was looking for the minimum required to do it legally. All of this applies to Colorado only.

Financial Adviser: If you are going to have less than 15 clients and aren't going advertise at all (no website, no facebook posts to friends and family, no calling yourself a financial adviser, nothing, just word of mouth) you can basically do whatever you want and charge whatever you want legally in terms of managing other people's money, but you won't find any insurance company to cover you for errors and omission insurance. YMMV.

If you want to do more than that or advertise at all, you need to: Pass the Series 65 exam (~$200 I think). Then create an LLC ($50/year) and register the firm as an Registered Investment Firm (~$180/year) and then register yourself as an Adviser at that firm (~$80/year). Then you can call yourself whatever you want as long as it isn't a trademark of some organization. So you could be a "Financial Planner" but not a "Certified Financial Planner." Then you probably also want Errors and Omission Insurance at a minimum (~$2000/year depending on assets under management looked like it would cover most of what you need) but as long as you're acting as a fiduciary and recommending low fee fees it would be really tough for someone to successfully sue you for messing things up for them too badly.

Tax Preparer: For free, you can "help" whoever you want. If you charge, you need to get a tax preparer's ID number from the IRS ($50/year) and you probably also want to get set up for E-File (I couldn't find a price but it involves getting fingerprinted by the local police so some cost for that at least). Then since you can't use FreeFileFillableForms.com as a preparer, you probably need to pay for some tax preparer software that will be $300-$1500 depending on who you use and how many returns you expect to do with them. If any of your client's get audited, you'll need to pay someone who is an Enrolled Agent to represent your client for you.

Hope that helps.

[daymare]

I'm a fee-only financial planner working at a small RIA.  I love my job.  If you want to do financial planning (as opposed to sales of products - blech), you need to have your series 65. In fact, at my firm, we're forbidden from having any other licenses to sell products as we want to be entirely transparent about how we're paid (via fees from clients), and to not have any conflict of interest (unavoidable if you're being compensated for selling products).