i work for an fa with a cfa and a ca. i myself am awaiting work exp before getting my letters. we run a discretionary portfolio as well as a large book of clients. i believe that this is the future of PWM. with the number of CFAs, CAs, CPAs growing exponentially, its obvious that many will find a home on the sell-side. i believe that this hybrid, PWM/PM approach will add a lot of credibility and value to the sell-side. not only do we bring much more knowledge to the table, but we can also handle many more clients as a team. i think many will be surprised by the changes the sell-side will see over the next couple of decades… and because of the size of the book, we can avoid many new issues/ipos and still be compensated for it. also, the argument that fa’s just sell whatever is not exactly accurate. often, the fa’s lose a lot of credibility with syndication should they not be able to place the shares they’ve been alloted, meaning they’ll lose out on future, more profitable offerings b/c syndication will think that they will not be able to place it…
^The overwhelming majority of FAs wouldn’t know what to do with an IPO if it fell in their lap.
There is no additional comp or prestige in being a charterholder FA serving HNW. But you’ll do a better job for clients. They may not know it, but at least you will.
MattLikesAnalysis Wrote: ------------------------------------------------------- > i work for an fa with a cfa and a ca. i myself am > awaiting work exp before getting my letters. we > run a discretionary portfolio as well as a large > book of clients. i believe that this is the future > of PWM. with the number of CFAs, CAs, CPAs growing > exponentially, its obvious that many will find a > home on the sell-side. i believe that this hybrid, > PWM/PM approach will add a lot of credibility and > value to the sell-side. not only do we bring much > more knowledge to the table, but we can also > handle many more clients as a team. i think many > will be surprised by the changes the sell-side > will see over the next couple of decades… > > and because of the size of the book, we can avoid > many new issues/ipos and still be compensated for > it. also, the argument that fa’s just sell > whatever is not exactly accurate. often, the fa’s > lose a lot of credibility with syndication should > they not be able to place the shares they’ve been > alloted, meaning they’ll lose out on future, more > profitable offerings b/c syndication will think > that they will not be able to place it… Sounds like we have very similar jobs.
samnyc Wrote: ------------------------------------------------------- > There is no additional comp or prestige in being a > charterholder FA serving HNW. But you’ll do a > better job for clients. They may not know it, but > at least you will. Exactly. 95% of my clients will not know what the CFA is or the work it takes to attain it, however, I will benefit from the in-depth knowledge of the program and therefore help me to better manage my client’s money. In an industry that will continue to be overhauled and regulated more closely, your CFP’s and CFA’s will most definitely have a leg-up. Like someone above mentioned, the barrier to entry at this point on the retail side is a joke. Any clown can get a series 6 in a month and trash a retiree’s life savings. Would you want a “bookkeeper” doing your taxes or a CPA? I work for the largest retail firm and I don’t sell any syndicate, proprietary, or structured products and have never been pressured to. That is a common mis-conception. I run a fee-only business building my own portfolios and that is why the CFA is relevant to my financial advisory business.
samnyc Wrote: ------------------------------------------------------- > There is no additional comp or prestige in being a > charterholder FA serving HNW. But you’ll do a > better job for clients. They may not know it, but > at least you will. i’m sure there is some liability reduction in holding the cfa and being able to soundly defend all investment recs…
If you follow the firm’s recommendations and watch suitability, you don’t need a CFA to reduce liability. Legally, anyway. But then there is the morality involved. Should you push product du jour because mutual fund complexes pay to be on recommended lists?
samnyc Wrote: ------------------------------------------------------- > If you follow the firm’s recommendations and watch > suitability, you don’t need a CFA to reduce > liability. Legally, anyway. > > But then there is the morality involved. Should > you push product du jour because mutual fund > complexes pay to be on recommended lists? i would love to see one advisor who does not hold an investment in his book that doesn’t have a ‘buy’ rec from his firm’s research dept. i would then love to punch this guy in the face and tell him he should not have a job if he cannot advise on client stock requests himself. also, to follow your research dept’s recs perfectly could result in high turnover (i.e. a “hold” rec is BS and a stock should be sold if a stock goes from “buy” to “hold”; why would you want to hold it if its not recommended you buy it?)
As a wholesaler, I work with alot of top FAs at the wirehouse firms for my territory (ML, MSSB, UBS,etc.) Few do the type of work a CFA is meant for, although a couple of them have their charters. The CFA charter is really more ideal for institutional work than it is for retail work; as has already been said, the role of the FA is primarily as a retail sales/distribution force. Now that being said, if you start up your own RIA and create alot of plans (401ks,deferred comp plans, etc.) it would be worthwhile (or do that WFinet thing Wachovia does to sponsor indies). By and large though, as an FA I think the CFP material is better suited to the type of work FAs perform as it covers the products most clients tend to utilize. I do not see most consumers using CDS or FX for much. Personally, I dream of starting my own mutual fund. If I could talk my clients into trusting me with 1/4 of the money they are already sending my way, I could launch my own asset management company with a series of funds to cover the major lines of funds. Its so aggravating to watch FAs spend months working on a client and then when the client says yes and puts in a few hundred k, I watch them perform zero due diligence or analysis (hell, at least ask for the recent perf #s!) for the portfolio mixes they ultimately choose. 3 months of sales, less than 20 seconds of analysis once they have a yes. And these are people who are friendly, who I like, and who are feeding me; I just find the process to be horrible. The better ones make me earn my pay and have me create analyses and sample portfolios once they determine the macro objectives, but they are few and far between. If you want out of retail, I don’t know how much being an FA will help you unless you buildup your own firm of some type (RIA, indie brokerage, launch a mutual fund or hedge fund). Before I was a wholesaler I was an FA, and you get very little exposure to useful institutional contacts imo. I have seen a couple of FAs go off and launch their own firms with some success, its def the long term path if you go that route. Use the brand name to back you up when getting started gathering assets, then strike out on your own (most clients will go with you if you just stay in touch with them on a frequent basis).
Dwight Wrote: ------------------------------------------------------- > samnyc Wrote: > The key is to find a company that has a > properly-aligned incentive structures to manage > your money. ^ unless you are independent good luck finding one. All companies want is for FA’s to go out and sell whatever they have that is “in a box”. Stay in the box and compliance won’t bother you. It does not matter if in that box is the Munder Net Net fund or Putnam OTC and Emerging growth and it’s March of 2000. The CFA Program makes you think and question the integrity of data these 2 things don’t fit in the just sell It because our “experts” say it’s good mentality. They want a bunch of wind up robot’s not people that actually care and invest in unique portfolios for each client.
CFP_GUY Wrote: ------------------------------------------------------- > I work for the largest retail firm and I don’t > sell any syndicate, proprietary, or structured > products and have never been pressured to. That > is a common mis-conception. I run a fee-only > business building my own portfolios and that is > why the CFA is relevant to my financial advisory > business. I worked at MSSB (must be where you are at since it is the largest retail firm) for the last 5 years and was @ SB before the merger and must say that the MS way of doing business is definitely shoving sh!t down peoples throat. I did not like that and left in April.