New career: financial advisor

[Le Barbu]

I am actualy looking to become a financial advisor and want to know what other people here think about this job. Even more if some of you work as a financial advisor themself.

I am 44 and our household is about 75% FI, our only debt is for investment purpose (tax advantaged leverage) and represent less than 20% of NW.

A friend of mine, who is very successful in this field, introduced me to the firm. They were very interested and they are willing to pay for all of the permits and the startup as an independend advisor.

Now, this is the kind of job were you make a lot of money managing investments, selling insurance and other financial products. This is completely at the other end of the spectrum compared to my DIY financial scheme.

What should I think about this offer? Through my financial journey, I realized that 90% of people (at least) are complete financial dummies, they have no interest to manage their finance related stuff and they do not give a shit to pay a lot for any kind of service. I found that I often care a lot more about other people situation then they do. I would probably be helpfull to get their things better, even living out from commissions and management fees!

We are not like MMM and if some of us ever tried to give "free" advices, well you know what happen...I cant remember how many people went to the stealership to buy a 40k$ car just few weeks after I suggest the exact same model for about 15k$ (3 years old, 50,000km). Fuck, some of them struggle at paying their utilities bills and CC debt!

The most intersting part of this offer is that I can work on my own schedule, adjust my work load with the income I need (not very much) and spend time doing what really interest me.

[Jack]

Will you be a fiduciary? If not, are you ethically comfortable with being a salesman and advising people to get inappropriate annuities and such instead of low-expense index funds?

[Frugancial Advisor]

Hi Le Barbu,

I'm a Certified Financial Planner in Ontario, and although I'm not too familiar with the regulations in Quebec, I can almost guarantee you will be acting as a salesperson and not a 'financial advisor' if you are just starting out. It takes a minimum of three years' experience in order to satisfy the requirements for a CFP designation, and until then the firm will be more than happy to pay for your mutual funds license in order to have you meeting with clients and selling expensive mutual funds.

If you could provide some more information about the firm or the actual title of your role, I could try and give some more specific advice. Lastly, be very wary at the initial hiring stages as firms are eager to try and influence you to sign your close friends, family, neighbours, etc. which can make many people feel uncomfortable. Targets are almost always inevitable as well (once again, depending on the firm), and the pressure will be put on you to perform to prove yourself.

[Le Barbu]

Hi Le Barbu,

I'm a Certified Financial Planner in Ontario, and although I'm not too familiar with the regulations in Quebec, I can almost guarantee you will be acting as a salesperson and not a 'financial advisor' if you are just starting out. It takes a minimum of three years' experience in order to satisfy the requirements for a CFP designation, and until then the firm will be more than happy to pay for your mutual funds license in order to have you meeting with clients and selling expensive mutual funds.

If you could provide some more information about the firm or the actual title of your role, I could try and give some more specific advice. Lastly, be very wary at the initial hiring stages as firms are eager to try and influence you to sign your close friends, family, neighbours, etc. which can make many people feel uncomfortable. Targets are almost always inevitable as well (once again, depending on the firm), and the pressure will be put on you to perform to prove yourself.

Hi Frugantial Advisor, the firm is SFL and the title is Financial Security Advisor. We just met once now and depending on my profile and strengths, it could be different.

[Le Barbu]

Will you be a fiduciary? If not, are you ethically comfortable with being a salesman and advising people to get inappropriate annuities and such instead of low-expense index funds?

I dont know, really...

It just seems like people are a lot more happy when they buy or do things wich are proved to be harmful for their wallet, health and life in general. Mustachian lifestyle and smart moves we make are the best way to make them unhappy.

The only real ethic job I think of would be to produce organic food and sell it at cost+2%

[Jack]

Will you be a fiduciary? If not, are you ethically comfortable with being a salesman and advising people to get inappropriate annuities and such instead of low-expense index funds?

I dont know, really...

It just seems like people are a lot more happy when they buy or do things wich are proved to be harmful for their wallet, health and life in general. Mustachian lifestyle and smart moves we make are the best way to make them unhappy.

The only real ethic job I think of would be to produce organic food and sell it at cost+2%

It's possible to be an ethical financial advisor, but that would mean holding yourself to the fiduciary standard and charging your clients a direct fee rather than being paid by commission.

However, this particular opportunity, as you described it, is almost certainly not that.

[Tjat]

Agree with Jack. This sounds like Ameriprise, where they hire anyone that applies and can breath to sell fee loaded products on commission, directing most revenue back to the mothership

[Le Barbu]

Will you be a fiduciary? If not, are you ethically comfortable with being a salesman and advising people to get inappropriate annuities and such instead of low-expense index funds?

I dont know, really...

It just seems like people are a lot more happy when they buy or do things wich are proved to be harmful for their wallet, health and life in general. Mustachian lifestyle and smart moves we make are the best way to make them unhappy.

The only real ethic job I think of would be to produce organic food and sell it at cost+2%

It's possible to be an ethical financial advisor, but that would mean holding yourself to the fiduciary standard and charging your clients a direct fee rather than being paid by commission.

However, this particular opportunity, as you described it, is almost certainly not that.

For more than 3 years, some inlaws* asked me for a lot of finances related advices (from mortgage through cars, taxes and investing) and I gave sounds (and completely free) advices. I am successful in all of these fields and a thrue DIYer. Last year, they began to look for a fucking big house even if they were already tight on money. I tried my best to week them up from their "dream" but they found a "financial advisor" who helped them to commit a financial suicide. They are now in debt to their eyeball, they pay higher fees and they are fucking happy! I just kept my mouth shut since then and try hard to not double facepalm myself in front of them when we meet. I know they are now convinced this guy "helped" them and he is a lot more better than me managing money.

*for the record, they are typical upper-middle class 35 y.o. w/3 kids under 10.

[Dicey]

First and foremost: would you be comfortable buying whatever product it is you will be expected to be selling?

Second, will it still be fun for you with performance strings attached?

Third, will you be able to accommodate different people's life stages/situations, or will you be expected to cram fit everyone through the same round hole?

[Le Barbu]

First and foremost: would you be comfortable buying whatever product it is you will be expected to be selling? Yes, the only difference maybe is that I would prefer a low fee version for myself, but I am a DIYer and very cheap. I already paid high fees in my early investor journey.

Second, will it still be fun for you with performance strings attached? Not sure yet about this...next meeting may answer this.

Third, will you be able to accommodate different people's life stages/situations, or will you be expected to cram fit everyone through the same round hole? For sure, one the goal is to find what the client needs.

Thank you Diane C, my answers are above!

[okits]

Will you be a fiduciary? If not, are you ethically comfortable with being a salesman and advising people to get inappropriate annuities and such instead of low-expense index funds?

I dont know, really...

It just seems like people are a lot more happy when they buy or do things wich are proved to be harmful for their wallet, health and life in general. Mustachian lifestyle and smart moves we make are the best way to make them unhappy.

The only real ethic job I think of would be to produce organic food and sell it at cost+2%

It's possible to be an ethical financial advisor, but that would mean holding yourself to the fiduciary standard and charging your clients a direct fee rather than being paid by commission.

However, this particular opportunity, as you described it, is almost certainly not that.

For more than 3 years, some inlaws* asked me for a lot of finances related advices (from mortgage through cars, taxes and investing) and I gave sounds (and completely free) advices. I am successful in all of these fields and a thrue DIYer. Last year, they began to look for a fucking big house even if they were already tight on money. I tried my best to week them up from their "dream" but they found a "financial advisor" who helped them to commit a financial suicide. They are now in debt to their eyeball, they pay higher fees and they are fucking happy! I just kept my mouth shut since then and try hard to not double facepalm myself in front of them when we meet. I know they are now convinced this guy "helped" them and he is a lot more better than me managing money.

*for the record, they are typical upper-middle class 35 y.o. w/3 kids under 10.

If their goal (whether they're aware of it or not) was to buy a huge house and consume as much as possible via debt then, yes, the other guy was definitely better than you.

Are there online reviews (glassdoor, Rate My Employer, etc.) for this company from its employees?  I would also be wary of becoming the high-MER mutual fund salesperson.  The ethics of it, for one.  Also, read up a little about CRM2 and see if this is going to affect your possible new role.  I'm hoping more people wake up to the cost of their high-MER mutual funds when they can see, in black and white, the thousands in fees they pay a year.

[Dicey]

First and foremost: would you be comfortable buying whatever product it is you will be expected to be selling? Yes, the only difference maybe is that I would prefer a low fee version for myself, but I am a DIYer and very cheap. I already paid high fees in my early investor journey.

Second, will it still be fun for you with performance strings attached? Not sure yet about this...next meeting may answer this.

Third, will you be able to accommodate different people's life stages/situations, or will you be expected to cram fit everyone through the same round hole? For sure, one the goal is to find what the client needs.

Thank you Diane C, my answers are above!

Le Barbu, at first I thought you were referring to an earlier post. Then I realizeded you'd answered within my post. I'm not great at multiple quotes, so the best I could come up with was to make your answers blue to make it easier to follow. I must say that even after doing that and re-reading the whole thread, I do not understand your reply to my first question. At all.

[Le Barbu]

First and foremost: would you be comfortable buying whatever product it is you will be expected to be selling? Yes, the only difference maybe is that I would prefer a low fee version for myself, but I am a DIYer and very cheap. I already paid high fees in my early investor journey.

Second, will it still be fun for you with performance strings attached? Not sure yet about this...next meeting may answer this.

Third, will you be able to accommodate different people's life stages/situations, or will you be expected to cram fit everyone through the same round hole? For sure, one the goal is to find what the client needs.

Thank you Diane C, my answers are above!

Le Barbu, at first I thought you were referring to an earlier post. Then I realizeded you'd answered within my post. I'm not great at multiple quotes, so the best I could come up with was to make your answers blue to make it easier to follow. I must say that even after doing that and re-reading the whole thread, I do not understand your reply to my first question. At all.

Sorry about that Diane!

The way I understand you 1st question is like you would ask me if I would buy a brand new Civic from the dealership. My answer is, I would buy this car but 5 years later on Craiglist for 1/3 of the price tag. For a lot of people, the second option is a no-no even if we are convinced its the way to go (à la low cost index funds)

Yesterday night, I talked with another friend who worked for this firm for a while. He told me they have no risk hiring someone who will bring new business (family members, friends, neighbors) an then let him run out of money after 1 year or 2. It takes a lot of work and 3-5 years to get by. Then, if you survive, the payout is easy and enormous. This pitch was not appealing to me :(

[Kakashi]

What should I think about this offer? Through my financial journey, I realized that 90% of people (at least) are complete financial dummies, they have no interest to manage their finance related stuff and they do not give a shit to pay a lot for any kind of service. I found that I often care a lot more about other people situation then they do. I would probably be helpfull to get their things better, even living out from commissions and management fees!

It sound likes you are rationalizing.  It sounds like that if you get your clients into high fee active funds so that you earn a commission, you are saying "well they are better off now then they were". 

There's a reason there's a lack of financial advisors that puts your money in low cost index funds.  This industry thrives on the uninformed.  I recently got a friend of mine off his financial advisor who was charging him 2% on his AUM.  2%!!!! 

[Cwadda]

Once I realized that most financial advisers are folks that charge you ridiculously high fees with commission my stomach churned. I couldn't believe how nice and sincere these guys seemed, yet were practically taking money right out of your pocket.

A fiduciary would be an amazing job though. I would love to do something like that.

[undercover]

https://www.youtube.com/watch?v=JdKI1wj-JpI

[Dicey]

First and foremost: would you be comfortable buying whatever product it is you will be expected to be selling? Yes, the only difference maybe is that I would prefer a low fee version for myself, but I am a DIYer and very cheap. I already paid high fees in my early investor journey.

Second, will it still be fun for you with performance strings attached? Not sure yet about this...next meeting may answer this.

Third, will you be able to accommodate different people's life stages/situations, or will you be expected to cram fit everyone through the same round hole? For sure, one the goal is to find what the client needs.

Thank you Diane C, my answers are above!

Le Barbu, at first I thought you were referring to an earlier post. Then I realizeded you'd answered within my post. I'm not great at multiple quotes, so the best I could come up with was to make your answers blue to make it easier to follow. I must say that even after doing that and re-reading the whole thread, I do not understand your reply to my first question. At all.

Sorry about that Diane!

The way I understand you 1st question is like you would ask me if I would buy a brand new Civic from the dealership. My answer is, I would buy this car but 5 years later on Craiglist for 1/3 of the price tag. For a lot of people, the second option is a no-no even if we are convinced its the way to go (à la low cost index funds)

Yesterday night, I talked with another friend who worked for this firm for a while. He told me they have no risk hiring someone who will bring new business (family members, friends, neighbors) an then let him run out of money after 1 year or 2. It takes a lot of work and 3-5 years to get by. Then, if you survive, the payout is easy and enormous. This pitch was not appealing to me :(

Good. Because the way I read your response is that you wouldn't do it yourself, but that you'd have no problem doing it to someone else, all because you'd paid your dues. None of which made any kind of karmic sense to me. My vote is a resounding NO. This doesn't pass the smell test, even from way over here. Glad you found a friend with first-hand experience.

[LeRainDrop]

I agree with Jack, Tjat, Diane C, et al.  I couldn't stomach taking this job because it sounds like this firm's model is to get you to recruit and exhaust all your personal connections by selling them expensive financial products.  Either you get enough schlubs to sign up such that it's profitable, or you don't get enough of them and so you're simply cut.  Either way, you'd have to deal with your conscience about convincing people to spend their money in ways that you know is not really best.  That's just my opinion.

[Moby32]

I actually think many people on this forum should be financial advisors.  Just because you get a series 7 doesn't mean you have to lose your morals.  You also don't have to sell any particular product if you don't want to.  I am a financial advisor at a major firm.  We are completely product agnostic.  I can and do recommend many people invest in index funds.  Clients pay me for advice based in assets under management, and it is very clear where my compensation comes from (no kickbacks, or high cost "no load" funds).  My clients find value in my advice for a multitude of reasons, not the least of which is that I am willing to and have educated myself on many of the basics of finance, as many of you here have done.  The fact is, many people can't, don't, won't, take the initiative themselves, and WANT to pay you to help them.  As long as you are honest, I would say the industry could use more of you.  Mustachians would make great financial advisors.


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[Dicey]

I actually think many people on this forum should be financial advisors.  Just because you get a series 7 doesn't mean you have to lose your morals.  You also don't have to sell any particular product if you don't want to.  I am a financial advisor at a major firm.  We are completely product agnostic.  I can and do recommend many people invest in index funds.  Clients pay me for advice based in assets under management, and it is very clear where my compensation comes from (no kickbacks, or high cost "no load" funds).  My clients find value in my advice for a multitude of reasons, not the least of which is that I am willing to and have educated myself on many of the basics of finance, as many of you here have done.  The fact is, many people can't, don't, won't, take the initiative themselves, and WANT to pay you to help them.  As long as you are honest, I would say the industry could use more of you.  Mustachians would make great financial advisors...

I don't disagree with you, Moby32. I do disagree with whatever it is the OP seems to be considering and why. I'd love to be wrong, but I suspect LeRainDrop's characterization is probably close to the truth. Sounds like it's not remotely the same as what you are suggesting.

Here's a shocker: I use a Financial Planner. I wouldn't be FIRE now without mine. I pay for the services of a CPA and a JD too. The difference is that I know what I'm paying them for. I get as far as I can go by myself and then hire the big guns to climb even higher. One key difference is that I did my research and sought them out, not the other way around.

[Le Barbu]

I agree with Jack, Tjat, Diane C, et al.  I couldn't stomach taking this job because it sounds like this firm's model is to get you to recruit and exhaust all your personal connections by selling them expensive financial products.  Either you get enough schlubs to sign up such that it's profitable, or you don't get enough of them and so you're simply cut.  Either way, you'd have to deal with your conscience about convincing people to spend their money in ways that you know is not really best.  That's just my opinion.

Pretty well said into 1 single paragraph!

The sad truth is that even if I decline this option (wich will likely happen next week) all of the people I know will just keep being fooled by this industry with me as a silent witness.

I actualy aim to get a job an Commercial Account Manager for a big bank, a job I already did a few years ago and fits my personality. I plan to be 100% FI within about 5 years, so its also the least risky path I can see now.

[Jack]

I've been kicking around the idea for a while now to start some kind of non-profit financial advising service for low-income people: I would act as a fiduciary to my clients and charge fees on some kind of sliding scale (e.g. free for people with negative net worth), supplemented by grants and donations.

(I haven't actually done it because I'm too busy with my real career.)

[sirdoug007]

I've been kicking around the idea for a while now to start some kind of non-profit financial advising service for low-income people: I would act as a fiduciary to my clients and charge fees on some kind of sliding scale (e.g. free for people with negative net worth), supplemented by grants and donations.

(I haven't actually done it because I'm too busy with my real career.)

That sounds awesome.  I'd love to do something like that when I am FI!  It sounds like a very rewarding post-career career.

[Moby32]

I third that desire Jack.  While I don't have the time to dedicate to charity at this stage of my life, I am passionate about personal finance and feel our education system has failed most everyone in that regard.


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[J_Stache]

I have a great business idea for anyone who wants to take it.  Create a website where people can ask financial questions for a monthly fee (subscription services are all the rage).  You also need an app version...everyone needs an app.  Okay, so customer signs up and asks questions.  You process the question and give an automated reply.  Probably only need a few standard lines:

Q: What should I do with my money?
A: Vanguard Index Fund.

Q: Should I buy X consumer good?
A: No.  Save the money.

This started as a joke, but it could probably make a good service.  No need to be a fiduciary, just have answers provided with a profile.  e.g.  Your answer is provided by "Jack".  Jack worked as an engineer (not software, not Silicon Valley) and retired at age 37 without winning the lottery.  Nice side gig for MMM readers, just never mention this website or the  company will implode!

[undercover]

I've been kicking around the idea for a while now to start some kind of non-profit financial advising service for low-income people: I would act as a fiduciary to my clients and charge fees on some kind of sliding scale (e.g. free for people with negative net worth), supplemented by grants and donations.

(I haven't actually done it because I'm too busy with my real career.)

Isn't this what financial blogs basically do already? The real problem is that low-income people are hard to reach. They're very rarely looking for this type of thing, and they're hard to find as well.

[Jack]

No need to be a fiduciary, just have answers provided with a profile.  e.g.  Your answer is provided by "Jack".  Jack worked as an engineer (not software, not Silicon Valley) and retired at age 37 without winning the lottery.

The quotes make it seem like you're talking about making up a hypothetical person, but the rest of the details sound like you're talking about me!

Isn't this what financial blogs basically do already? The real problem is that low-income people are hard to reach. They're very rarely looking for this type of thing, and they're hard to find as well.

More like a MMM forum case study, with follow-up and coaching.

My neighborhood is gentrifying but about half the population is still low-income, so I would find clients by advertising in the small, local newspaper (not the AJC, but the little neighborhood papers like The Porch Press and CrossRoads News). Bandit signs would also probably be effective (but I wouldn't use them myself, since they're tantamount to littering and illegal in Atlanta).