New Advisor?

This article is geared mainly toward advisors and planners new to the business or considering changing careers to become a financial advisor or planner; but it can also be useful to folks considering working with an advisor.

As you start your new vocation it’s important to know what vocation you are actually in. What I mean by this is don’t be fooled by your future manager or company in to thinking that your job title is what you’ll be doing. For example, your job title might be financial advisor, insurance advisor, financial consultant, etc. You need to consider what it is you’re doing. If your main job (and the main method you get paid) is by selling a product, then your primary job title is salesperson, not financial advisor. This isn’t necessarily a bad thing (unless you don’t like doing it) but it’s important to understand what you’re really doing.

Your main job may be to gather as many client assets as you can – in which case you’re not an advisor, but an asset gatherer. I can remember early in my career interviewing with a company that had all these fancy titles, offices, and industry jargon but when we got down to brass tacks, my main job was going to be hunting and gathering assets. Even though this wasn’t for me, it doesn’t mean it’s wrong. You simply need to be aware of what it is you’re doing.

Granted, we are all in sales – selling folks on our products, ideas, way of thinking (my daughters are extraordinary salespeople). Dan Pink’s book To Sell is Human talks about this in great detail.

Next, consider the vocation you want. In other words, picture yourself in 5, 10, even 20 years in the future. What type of business do you want to be involved in? Do you want to be in management, sales, running your own company, or working for a firm? The good news about this is you can start planning early and start doing the things you need to do today, to get you to your goals in the future.

Also consider the company you will work for. How will you be paid? Will you have quotas? What type of contract will you have? Contracts come in all shapes and sizes but mainly you want to see what you can and can’t do. Some companies prohibit you from working in the best interest of your clients. This means you have to put the company first and your clients second. It may also mean you cannot attain certain degrees and designations that require you to work in a fiduciary relationship with your clients. Put yourself in your clients’ shoes. If you were the client is there any reason you wouldn’t want the advisor acting in your best interest? A few hundred dollars to have an attorney review and interpret your contract may be priceless.

Additionally, consider how the company you’re going to work for acquires its clients. For some this means cold calling, direct mail, going after your friends and family and even going door to door in the neighborhood. Most of these strategies (if you can call them that) are frivolous at best and what business is gained is quickly lost or relationships ruined. Again, put yourself in your prospective clients’ shoes. Would you invest your hard-earned and carefully incubating nest egg with someone who called you out of the blue or rang your doorbell without an appointment? (Note to readers: generally if this happens to you the advisor is brand spanking new). If you want to keep cold-calling, and door knocking, maintain the status quo and stop reading here.

Still reading? Good!

So what steps can you take given that you’re new and have to start somewhere?

1. Never stop learning. Continue to educate yourself through books (not sales books, but financial/finance books). Take college classes in financial planning, finance, tax, etc. Earn designations like the CFP®, CFA® or other designations that are difficult to achieve. Consider a degree in financial planning. Learning can make up for months, if not years of pounding the pavement and having a phone glued to your ear. It’s also much more productive and effective.

2. Talk with others in the profession (aside from the person interviewing you or company recruiting you). See what experiences they’ve had. What do they enjoy? What mistakes did they learn from? What are they currently doing? What designations do they have? How do they get paid?

3. Consider working another job. What? Yes, you read that correctly. Having another income to support you and or your family will make your decision on which company to work for or start on your own less stressful and can make the small or non-existent paychecks easier to deal with starting out. It will also help you avoid the temptation to not act in a client’s best interest because you need the money. Many highly successful financial planning professionals have other jobs as consultants, educators, etc.

4. Picture yourself in the future. What are you doing? Who are your clients? How are you acquiring them? What designations do you have? Are you happy? Start doing those things today.