watch the movie boiler room (1999)
Good movie!
Dude these are some crappy deals… From no pay for 6 months to having to pay your own cubicle to all commission pay.
Being an FA right after undergrad and having to cold call 200 times a day, I’d say going to any of the big wire houses is a far better bet than any of the companies mentioned above. They give you salary, the company name that sounds better than AXA or Mass Mutual and honestly all you gotta do is bring in assets. Just cold call, mail brochure/letters to business owners and go on meetings.
As many have said above, run away from these firms or so called financial services firms… Most likely you’ll be selling insurance products or at best insurance related products such as VAs and VULs.
I have to concur with what seems to be the general consensus, being a young FA sucks and most fail. The job has little to do with finance so if you’re not earning it’s not like you’re even getting any real experience. I’ve known successful FAs but they were career changers in their 40s with large networks.
Why are you doing the CFA if you are considering being an FA? You will be WAY over qualified with a CFA as an FA. Like they said… you will be selling insurance and investment products. Don’t dream about managing large portfolios at those places.
Heck I work for a large bank in Trust and most of our PM’s don’t have their CFA’s nor have they taken them. I have my CFP® and probably on paper would be more qualified then some of our PM’s… But then again i’ve worked at an insurance company where if you wanted to do any investment management (instituational or personal) you had to have your CFA or at least have passed level 1. Think it really depends on your focus for a career and what you want to do.
I’m looking to get into more Portfolio management instead of Trust/Financial Planning so that is why I am going complete the CFA.
Being an FA wouldn’t be my brand of vodka, but I feel like I should defend them here. Not sure why all the hate. There are basically two types of FA shops - ones that offer you a salary to start and ones that don’t.
The former are the wirehouses (Merrill, MS, Wells, and UBS). In return for the salary, you promise to raise $15m your first year. If you don’t, you get fired. However, they offer very good resources and training. Most still fail though.
The second group are made up of everyone else. It’s actually the norm not to get paid. If you’re lucky, you might find a place that will give you a draw on future commission for a few months, but probably not. These are the Ameriprises, Northwestern Mutuals, etc. Much less pressure, but also less training and little external motivation. Making it is all up to you.
Another route to go that is applicable to CFAs is to join a large RIA or FA team as an analyst. Guys that manage over $300m need a good analyst or two and pay fairly well, and if they like you there may be an opportunity to buy their book when they want to retire.
Out of all these guys - wires, independents, or RIAs - some are douche bags and some are amazingly sharp. The bigger teams almost always consist of at least three people. One that specializes in insurance, one that handles the investments, and one that manages clients and tries to bring in new assets. If more than one guy happens to be good at the relationship side, all the better. There’s normally a tax guy too. Point is if you want to be really successful, you won’t be doing it alone. You’ll be working on a team with guys you like.
In the end, FAs do provide essential services so the good ones aren’t just some assholes trying to scam people for an insurance premium. You do a good job for people and word gets around. After several years you’ll hopefully have a business with a few hundred million under management. That’ll put you in the top 10% of all advisors. At that point it doesn’t matter what firm you work for. You could be at Ameriprise and UBS would kill to have you. It’s just about the money. Speaking of which, you make the top 10% and there’s a good chance you’re pulling down seven figures. Not a bad gig/