Anyone here a Financial Advisor??

[Bud_Fox]

Just wondering if anyone here is a Financial Adviser?

I'm from Canada and am wondering what courses i'd have to do to become a FA. I know there is a Mutual Funds course and a Canadian Securities Course, but i'm not sure which one i'd have to do first.

I'm hoping to get a job with at least one of the 5 big Canadian banks (CIBC/TD/RBC/BMO/Scotia).

If anyone here can give me some advice, that would be great. Also, If anyone here is friends/related to a F.A., I was just wondering what kind of money they make annually?

Thanks

 

[Monster]

In the U.S. you have to sign-up with a company and get trained for a couple of months. Then you take the Series 6, 7, and 63. Then you are officially licensed and can get clients to sell securities to. It is all commission based; maybe with a small base pay.

 

[A-Unit]

Re:

You'll get alot of opinions of what they are what they're not.

You'll also hear what people expect they should do, and then there's what the reality of what they can do legally and profitably.

The FIRST step in becoming a FA is being able to offer (sell) products. Advice is not included in this level, legally or professionally. You can offer AIYUT mutual fund, but realistically, that's all you can counsel on unless you hold designations, degrees, or certifications in other fields that can back up said knowledge. MANY people get sued for offering counsel, say on Taxes, when the only tax information they should possess if they offer mutual funds is about mutual funds. You can't offer information on taxes unless you're an EA or CPA.

So having widespread knowledge (unlike) doctors helps in rising to the top, where, you'll want to likely drop alot of responsibilities requiring technical knowledge and focus solely on dealing with the client emotionally.

FA's at the bottom rung, earn 100k. Which in all likelihood, gives me mixed emotions. That's about the average of a group of 500. A very small % make 250,000+, and that's because getting to that level requires more BUSINESS sense, than FINANCE sense. 95% of America really doesn't need high level planning, though they want it. They do deserve quality service, BUT, you can't change people's habits. If you get them young, you can counsel them, so that maybe they can take advantage of better investments. However, the SEC and NASD in the US prevent ALOT of alternate investing because clients aren't liquid enough, don't have enough assets, income, or experience to do said investments. AND then, things go awry, they blame the rep anyways, rather than realizing investments are meant to be risky so that you get a reward. If you don't want risk, go buy a CD or stick money in the bank, or pay off debt. Otherwise, learn to accept risk. Just don't accept dishonest FA's, OR, unsound advice.

Now, people might say "well, 100k, that's nothing to scoff at." However, that's not NET 100k, after expenses. Alot of that's GROSS, and FA's regardless of their structure pay heavy fees to be advisors, CE credit, malpractice insurance, appointment fees, and regulatory fees, before you even get to secretary, office, and technology fees. Whether you're totally independent, or captive, doesn't matter. The captive company will take care of these things and haircut you on your payout, whereas the independent company will give you a higher payout, but expect you to fully pay them. It just comes down to HOW you want to operate. Moreover, captive FA's generally offer proprietary stuff, and get paid more for captive investments.

The 100k also has to be nurturted and monitored, depending on your business model. The days of pitching stock are over, unless you maintain a SMALL group of clients (talking like 10 here with over 25 million in assets or more and do other work). For alot of reasons brokers don't pitch stock like they used to...

-clients don't like risk or take responsibility, the rep bears the risk, and most aren't willing to jeopardize careers on 1 client.
-it's not cost effective. it's expensive for the client, profitless for the rep, and requires far too much monitoring for the advisor.
-the account has to be big enough to justify a fee wrapped around it, if they're not making money off of trades.

FA's will then offer:
-mutual funds
-variable annuities
-wrap accounts, separate accounts, unified accounts, etc
-real estate investment trusts
-oil partnerships
-leasing funds
-fixed annuities
-life insurance
-fee planning with tax planning
-estate planning, 401k plans, 403b plans, etc

Most FA's are seeking to be ADVICE centers, offering a PLAN center around tremendous service. The thing about Fidelity and similar companies are...they're not licensed so legally they can't speak about topics you may want to know. They're great for the guy who wants to learn, but at some point, if it's not your PRIMARY skill, OR it's not easy to do, you'll either lose gobs of money through mistakes or lost potential returns, OR, have to switch to someone who can do it better. Most of America falls in category 1, where they either lose gobs of money making mistakes or missing out on potential returns compounded over years. It's quite sad.

Education-wise.

Series 63, 7, 66/65 depending on state. And to get your CFP, you need to have a 4 year degree (not 2, and previously it was no degree). Each year you need a certain amount of CE credits per state, which in the end will bring you to having a few designations in select fields. Also, an insurance license (life accident health). I'd also consider tax courses right off the bat. Investment advice is quite instantaneous, and since you're supposed to be the expert, you're not meant to bore people with the technicals of why you do what you do. If you're asked, you should have an answer. But, most people outside of engineers and teachers don't ask. They just want peace of mind, their goals achieved, stability, and a constant ROR. Some, a select few will want comfort with the potential for wealth, but that's a low %. Reigning supreme here is the law of stats, which shows its face in a micro level amongst people in financial terms.

Investments are...quite complex for the majority of people, so being able to round out what you do is a nice compliment to your practice. Once you're TOPDOG, FA firms usually center a nice support staff around the FA, such as support staff, administaff, junior partners, etc. These firms either have alot of LOW level clients with LOW client dollar mins, or Few clients, with HIGH mins.

Hope that helps.

It's definately a growing field, where much of the "dead" weight is amongst older FA's. They get the brunt of the business because in small communities, it isn't know P'E ratios that matter...it's remembering Johnny Walker's kid's birthday, and attending funerals that nabs the accounts and keeps maintenance to a minimum. Big cities, it's probably a bit hotter and different, where prestige ranks higher. However, most advisors position themselves in communities, not in cities, even though financial offices are there. The reason being, they are around people and families and visible.


A-Unit

 

[RedPill]

Everything A-Unit said is correct. I'll add my two cents.

I'm not familiar with Canada's legal or economic environments, but I would imagine they're similar to the US.

If you are considering advisory work for a career, you would be wise to zoom out for a moment and consider the risks and rewards of such a career, as well as the different tracks you can take.

Most people who get started in the financial industry do so at a captive or semi-captive firm. What this means is that you are essentially an employee whose job is to sell, and who bears the responsibilities of a self-employed person. The benefit to this environment is that many of the administrative burdens of training, education, processing business, maintaining an office, and having procedures to follow are taken care of for you. Also, these firms can provide short-term income and benefits while you're building your client base, such as draws, small base salaries, lead sources, and annualized commissions.

Drawbacks to working in a career shop (captive environment) are that you typically do not own the rights to the residual income generated by the business you've placed until you've worked there for many years. You are also subject to meeting sales quotas, writing specific financial products or fund offerings, and lower payouts. Most of these places make you sign a non-compete agreement so you cannot take your business elsewhere should you decide to leave. There are many people who survive and thrive well into a six-figure income working in these environments, and these places are where most people get their start because of the high barriers to entry in this industry. It's a lot of work and a large investment of time to go from someone fresh off the streets to someone who's knowledgable, polished, and capable of plowing through all the administrative BS (and there's a lot of it) to get themselves in front of new faces every week and writing business consistently.

All of these career shop environments will purport that you're self-employed, and to a large extent you are, but at the end of the day you are still a unit of production for someone else's interests - namely the sales trainers and managers above you in the hierarchy.

The alternative to working for a captive or semi-captive environment is working as an independent rep. You still will have to place business with a broker/dealer, but you are calling the shots in every aspect of the business. This is when you truly own your practice and become a business owner as much or moreso than a sales agent. That said, unless you're carrying some serious cash and experience and can hire a staff when you get started, you are also the only employee of your business, and are solely responsible for sales efforts. Naturally, as the risks and costs are far greater when you own the business, the potential for income is limited only by your skill as an entrepreneur. The payouts are higher, but so is the responsibility. Starting your own business is a serious life commitment, not to be taken lightly. You have to have a serious motivation and solid internal alignment with your core values before taking this leap.

Bottom line, there are two primary paths to exorbitant wealth generation in the financial services industry as an advisor. 1) Become a top-level individual producer, or 2) Build an exceptional business that produces. When you're first getting started, you'll most likely need to go apply to work at an aforementioned career firm, but bear in mind what your end goal is with this type of work. Most people fail out as a financial advisor within a year because they get gold fever and are not prepared to commit to the hours, the books, the sales rejection, and the learning curve. Enter into it with a get-rich-quick mentality and you're sunk. It's not an easy industry to succeed in regardless of your path, but if you can make it past the first year or two you'll find there are significant rewards for succeeding.