This post was originally published on this site.
Key Takeaways
- There is no instruction manual for being a financial advisor, so you spend a lot of time trying new techniques, new marketing strategies, and changing the structure of your business.
- The most rewarding aspect of being an advisor is having a front-row seat to some of the wins your clients achieve.
- By being patient, educating our clients as we work, and not moving forward until they’re comfortable with the plan, we feel we make a concerted effort to earn their trust.
- A willingness to continue learning is crucial if you’re working in finance. Rules and regulations change, and the field itself is vast, so if you stop learning your skill set will flatline quickly.
- Each certification has its own focus, and the skill set an advisor develops while earning them can shape how they choose to practice.
- I think the future of financial planning is strong, but I do believe the way the old guard of advisors was incentivized will go by the wayside.
Getting Started as a Financial Advisor & Career Milestones
Tell us about your journey to becoming a financial advisor. Was it a typical path or did it have some unique twists? What sparked your interest in this field?
“I started my job as a financial advisor thinking it was temporary. I needed a job, and since there’s no base pay for many advisors when they start, it’s easy to get hired and I saw it as a way to make money while I looked for something “stable”.
When you get started, it’s common for advisors to be pushed to work with their “Hot 100” – a list of family members, friends, classmates in your natural market that are willing to support you as you begin your career. Almost every name in my Top 100 was a black, first- or second-generation high-income earner. As I started setting appointments with these people I loved, many of whom helped raise me, I went in with the expectation they would have money set aside, all of their insurances in place, a will and estate planning documents, and that they were just meeting with me to be supportive. When the meetings started, I realized almost none of them had enough to retire, the appropriate insurance, or even the basics in place. What’s worse, they weren’t that knowledgeable of what they even needed. It wasn’t until then that I realized the need, and started to put two and two together that I could fill that need by getting better as a financial advisor.”
Could you highlight the significant milestones in your career that eventually positioned you where you are today?
“After I started as an advisor, there were two people who saw something in me and gave me an opportunity: one was a man named Alan Moore, who was an alum of my alma mater and gave me the initial job. While I eventually realized that there was a place for me in this industry, he was the one who told me first, helped develop me, and put me in a structured program to teach me how to build a business.
The second milestone was connecting with my professional mentor, Marcus Henderson. Marcus was one of the first financial advisors in my area to build a profitable firm while working mostly with minorities trying to build wealth. He mentored me, eventually hired me as an advisor with his firm, and exposed me to conversations and brought me into rooms that allowed me to learn and see what was possible to build.
The third was an unfortunate milestone: the first client of mine who died. He was under 40, married, with multiple young children. A few years before, I had to convince him to purchase more life insurance to protect his family in case he died. He didn’t want to, but I was adamant, and he eventually agreed.
Being able to tell his widow with confidence that she wouldn’t have to worry about money and knowing that I played a role in making sure she was ok, changed my perspective on the value we provide and the stakes that are at play when it comes to planning your finances.”
What inspired you to establish New Money New Problems, and what challenges did you face when starting your own financial planning firm?
“I realized while building my clientele that I enjoyed working with first- or second-generation high-income earners, who were around my age, dealing with the same growing pains, and identified with me and my culture. And I wanted to build my own firm that actively attracted those types of people, even if it actively turned away other people. The name of our firm is a Biggie reference; not what you’d expect from a buttoned-up financial advisor. There are plenty who see the way I dress in meetings, or the references I make, and decide I’m not for them. But the people I enjoy working with that come in the door, we feel we’ve built a practice just for them.”
What have been the biggest influences in your career growth? (Ie. mentors, role models, courses, key experiences)
“Mentors have been incredibly helpful to me for two reasons:
- Showing me what’s possible to build, even if I do it with my own twist.
- Keeping me from making mistakes they’ve already made.
There is no instruction manual for being a financial advisor, so you spend a lot of time trying new techniques, new marketing strategies, and changing the structure of your business. It can take a few years to see the consequences of those choices, good or bad, so you can burn yourself now and have to wait to figure it out later. Being able to run ideas by mentors who might have tried similar things can save you from going down a path that costs you time and money.”
What’s Life as a Financial Advisor?
What do you like the most about the work you do? What is the most challenging aspect(s)?
“The most rewarding aspect of being an advisor is having a front-row seat to some of the wins your clients achieve while working with you: buying their first investment property, starting a business, and being able to send their kids to college. Knowing that you played a part in forming a strategy that helped them accomplish something meaningful is beyond fulfilling.
The most challenging part is being an entrepreneur and a business owner. You’re never really off work, you have to make sure revenue is consistent and increasing, and you’re constantly building your business while also providing value to the clients you already have.”
In a profession where trust is paramount, what strategies do you employ to build and maintain strong relationships with your clients?
“We try our hardest to be radically transparent. We openly share how much we make from implementing certain products or services, but we also show our clients why the recommendations we make are valuable no matter what we’re paid. Most of our clients have either never worked with an advisor, or they’ve had a negative experience with a more insurance-focused salesperson, so they’re often pretty hesitant when they come to us. By being patient, educating them as we work, and not moving forward until they’re comfortable with the plan, we feel we make a concerted effort to earn their trust.”
What key skills or qualities do you believe are essential for a career in finance? What type of person makes a great financial advisor?
“A willingness to continue learning is crucial if you’re working in finance. Rules and regulations change, and the field itself is vast, so if you stop learning your skill set will flatline quickly.
Because the field is so vast, the personality traits you need depend on the role you’re pursuing. If you plan to work with clients directly, you don’t necessarily need to have a bubbly personality, but you do need a level of attentiveness towards customer service.
Even if you work behind the scenes, in support of a client-facing advisor, it’s helpful to keep in mind that the whole system only works with new or recurring revenue: someone has to sign up for a financial plan, invest money, or buy an insurance policy. No matter your role, if you don’t keep in mind the things that make it easier to draw in and keep customers, everyone will be in trouble.”
Given your extensive experience across multiple states, how do regulatory changes in the financial industry affect your advisory approach?
“You often hear about the possibility of regulatory changes far before they’re put in place. And by the time they’re enacted, if they’re passed at all, they may look far different than the original proposal.
As the legislation develops, it’s important for an advisor to stay up to date on how the proposal could impact the plans you’ve put in place for clients. A change in the tax code could alter an investment strategy, or the client’s estate planning needs.
Paying attention to the regulatory changes around you can be difficult, but in some ways, it acts as job security. Your clients probably don’t have time to pay it the same level of attention, so as long as you stay knowledgeable, there’s value in them keeping you around.”
Advice for Aspiring Financial Advisors
From your experience, how do certifications like CFP®, CLU®, and CSLP shape the career paths of financial advisors, and what unique advantages do they offer to professionals in the field?
“Each certification has its own focus, and the skill set an advisor develops while earning them can shape how they choose to practice.
Chartered Life Underwriters often have a deep skill set in insurance, business, and estate planning. Certified Financial Planners are what I like to call generalist specialists: they learn enough to be dangerous about a wide range of financial topics, from tax planning to investment analysis. Certified Student Loan Professionals dig deep into federal and private student loan strategies for clients struggling with education debt.
Focusing your certification efforts on the needs of your client base gives you the best shot at being able to confidently serve anyone who comes in your door.”
For someone looking to enter the financial advisory field, how would you recommend they prioritize obtaining these certifications, and why?
“If an advisor wants to focus on planning, I would prioritize the Certified Financial Planner process for multiple reasons. The coursework itself will likely take an advisor a couple of years to complete and could take another 3 to 4 months of intense studying to pass the exam (150+ questions over two, three-hour long sessions).
But even if you complete the coursework and pass the exam, you can’t receive the actual designation until you spend at least 6,000 hours involved in the financial planning process with clients, or 4,000 hours as an apprentice. By starting your coursework early as you build towards the hours requirement, you can save yourself time at the backend of the process.
The good thing is that education requirements for many other certifications and designations overlap with the Certified Financial Planner coursework, including the Chartered Life Underwriter designation. So if you complete the coursework and earn your designation, you may only need one or two more classes to earn another valuable designation as well.”
Looking ahead, what do you see as the most significant challenges or opportunities for the financial planning profession in the next decade? What do you think is the career outlook or future of this profession?
“Artificial intelligence, Robo advisors, do-it-yourself financial management: these developments are all things people have speculated will destroy the financial planning industry. In actuality, the more information floods the marketplace, the more people want a knowledgeable advisor to help them sift through it.
I think the future of financial planning is strong, but I do believe the way the old guard of advisors was incentivized will go by the wayside. Rather than focusing on who can get the most sales or add the most clients, I believe we will continue to see a shift towards advisors working with a smaller group of clients and charging them a premium for high-quality financial planning. And because of the increase in lower-priced options for people who may not be able to afford these relationships, advisors will have more options and resources to provide to those who may not be a fit for their firm, without feeling they’re leaving them high and dry.”
What would be one piece of advice you would give to aspiring financial professionals entering the field? Where should they get started? Or (if you could go back in time) what advice would you give yourself?
“Find a place that will expose you to as many planning scenarios and parts of the industry as you can. Even if you think you know where or with whom you want to work, you don’t really know until you get exposure to real-life scenarios. And by seeing as many different things as you can, you also start to see trends and develop an expertise that you can use to inform recommendations to clients to go through similar things in the future.
Lastly, from the very beginning of your career, develop content. Getting people in the door is the hardest part of being an advisor, but having content online makes it easier. Whether it’s a blog, a podcast, or a YouTube channel, it’s crucially important in this age that potential clients be able to find you online and validate your expertise before they decide to reach out.
We operate a newsletter, a weekly podcast, and a YouTube channel, all displaying our expertise in planning areas relevant to potential clients. By the time they reach out, they’re comfortable that we know what we’re talking about, which eliminates a significant barrier.”
Reader Q & A with Brenton Harrison
How stressful is being a financial advisor?
“Think of the stress you have when there’s a financial emergency, or lose a job, or the stock market goes down significantly. And you’re just worried about your finances. Now imagine you work with dozens of client households who are paying you to make sure their finances are in order. So when all those bad things happen, you feel a portion of that angst as well, especially because the money you earn only continues if those clients think you’re doing a good job. All of that is to say … It can get pretty stressful.”
What are some common misconceptions about financial advisors?
“Financial advisors are scammers: unfortunately, there have been advisors over the years who haven’t done things the right way. Because you’re dealing with people’s money, people rightfully pay a lot of attention to people who do things the wrong way. But there are bad behaviors in every industry, and it doesn’t mean the industry as a whole is corrupt. The overwhelming majority of advisors are trying to do the best they can to meet their clients’ needs. And if it provides any comfort, partially because of those bad actors, we are one of the most heavily regulated industries in the world. So there’s likely a ton of oversight regarding the recommendations your advisor makes.”
What is the best financial advisor niche to start with?
“Whatever niche group of people captures your passion and gets you energized to show up each day. Sometimes advisors can trick themselves into thinking if they get too specific, or if they don’t work with people who are rich, there won’t be enough clients to serve.
No matter how specific your niche, no matter the income of your clients, there is a way to make almost any group of people into a profitable clientele, even if it means doing things a bit differently than other firms.”