10 Things I Wish All Entry Level Financial Advisors Knew
NOTE: If you’re a new financial advisor, make sure you check out Your First Year As A Financial Advisor, where I reveal several things every new financial advisor ought to know.
If you’re someone seeking an entry level financial advisor position (or perhaps hiring for one) then I’ve got good news and bad news…
The good news is that there has never been a better time to be a financial advisor. If you’re willing to work hard and stick to a proven strategy, you can build a great life for yourself.
The bad news is that there are a few “shocks” some financial advisors encounter when first starting out. Because I’m someone who works exclusively with financial advisors to help them build their businesses, I’ve worked with everyone from experienced advisors to those just starting out.
I’ve found that there are ten specific things I wish all entry level financial advisors knew, and here they are…
1. Being A Financial Advisor Is Not For Everyone.
If you’re looking for an easy career where you can coast by on the bare minimum, this is NOT for you.
Being a financial advisor involves a lot of work and it’s heavily weighted toward the beginning of your career. Which means that you may work 60-80 hours per week in the first few years of your career but only work 20-30 hours per week once you’re experienced.
The bulk of building a financial advisory business involves prospecting and marketing. Unfortunately, a lot of newly minted advisors think they’ll be reading financial papers and picking stocks all day.
In my experience, one of the biggest reasons for the high turnover rate in the financial advisory field is because entry level financial advisors don’t expect to do much prospecting and marketing.
ALSO READ: 15 Prospecting Tips for Financial Advisors
2. Not All Companies Are The Same.
In fact, being a financial advisor can vary wildly depending on the company you choose. Some are strict, while others are more laid back. Some will hold your hand every step of the way, while others will expect you to hit the ground running. Some will micromanage everything you do, while others will let you do your own thing.
If you’re a potential financial advisor, I STRONGLY recommend you do your due diligence on various companies and take your time doing so.
Hop on LinkedIn and start reaching out to various advisors on LinkedIn. Find their email addresses online. Tell them that you’re an aspiring financial advisor and you’re interested in joining their company. Ask them to tell you about a day in their life and the pros and cons of their particular company.
For example, working at a wirehouse is different than working for an independent RIA. Companies like Edward Jones expect you to knock on doors while a smaller shop may want you to do seminars to get clients.
Again, make sure you take your time with this and explore your options. Doing so can save you a lot of headache and heartache down the road.
ALSO READ: A Day In The Life of a Financial Advisor
3. The Income Can Vary.
One of the most common questions entry level financial advisors ask me is, “How much money can I make?”, and while that’s a valid question, the answer varies quite a bit.
Because some companies offer a base salary while others don’t. Incentive structures can vary and the fees you charge can vary too.
However, I will tell you this: according to the United States Bureau of Labor Statistics, the average financial advisor makes slightly more than $90,000 per year. Figuring this is nearly double the average household income in the U.S., this is a respectable income.
Yet, this number doesn’t tell the whole story. Because, again, a financial advisor’s career is front-loaded. This means a new financial advisor may make significantly less while an experienced advisor (who has tons of clients and a solid base of recurring income) makes much more.
Of course, this doesn’t mean you CAN’T make more money as a new financial advisor. One of the beautiful things about being a financial advisor is that you get out what you put in. Which means if you acquire the right skills and build your book of business, you can make a lot more money than the average.
4. Ignore The Idea Of Your "Natural Market".
One of the most damaging things companies keep pushing to new financial advisors is this idea of a “natural market”. They explain how you have a natural market (aka your friends and family) where you can start selling insurance and investment products. Some may even give you a little packet to help you “brainstorm” people.
Don’t do it!
The idea of a “natural market” is one of the biggest myths entry level financial advisors struggle with. Read this email I got from a new advisor…
I have recently entered the financial services field. I have over 250 people in my natural market with the majority of them being in the $100K income level.
However, since I’m only 25 and the major portion of my natural market is under 30 years old, I can’t imagine gathering huge assets from them. Should I approach them with insurance instead of investments?
The idea of a “natural market” is a complete crock.
I want you to imagine you’re a doctor and you just opened a practice. Would you look for a “natural market?”
You’d look for sick people.
Let’s try another one…
Imagine you went into the roofing business. Would you approach your “natural market” and expect to do business with you.
You’d look for people who need new roofs.
Why in the world would this concept be any different for financial advisors?
ALSO READ: 5 Best Niches for Financial Advisors
5. Take Lots Of Practice Tests For Your Exams.
In order to become a financial advisor, you’ll have to pass a few exams first. One of them is the Series 7, which I talk about here.
If you spend any amount of time on financial advisor forums online, you’ll see lots of people in pre-licensing freaking out about studying and prepping for their exams. Yes, they can be difficult… and yes, the pass rate is pretty low. However, that doesn’t mean you can’t do it.
Time and time again I’ve seen that one of the biggest predictors in passing the exams is the number of practice tests a person takes. In fact, I’m considering doing an “official” study to document the correlation.
6. Choose Your Marketing Strategies Wisely.
Helping financial advisors improve their marketing is my area of expertise - it’s what I do all day long. I’ve found that nearly any marketing strategy can work if you know what you’re doing and keep doing it.
For example, there are some advisors who scream out “seminars don’t work!” even though are many financial advisors out there getting clients with seminars every day.
Another example is that a lot of people say, “cold calling is dead”. Yet, I’ve worked with countless financial advisors who have built their business via cold calling.
The key is to choose a marketing strategy that suits you and get great at it. If you can’t stand cold calling and dread picking up the phone every day, perhaps cold calling isn’t for you. That’s okay - pick another strategy.
In my experience, one of the best marketing strategies for financial advisors is using LinkedIn to set appointments.
Being the huge marketing nerd that I am, I often daydream about creating various marketing strategies for financial advisors. One day I thought to myself, “If I could create the PERFECT marketing strategy for financial advisors, what would it look like?”
And I figured…
Then I realized…
LinkedIn has all those things!
LinkedIn is definitely cost-effective. I personally made LinkedIn work for me with exactly zero dollars and zero cents.
You can access it anytime, day or night. I know financial advisors who, when they can’t fall asleep, send follow-up messages on LinkedIn at 3 a.m.
It definitely gives you important information about your leads and prospects.
You can search for someone, look at their profile, and glean important information that can help you stand out from everyone else.
You can reach 10,000 people just as easily as 100 people. That’s where LinkedIn dominates - it allows you to scale like no other marketing method in the world.
And it most certainly builds authority, credibility, and trust with your prospects.
So, make sure you evaluate several marketing strategies and choose the ones that suit you best. If you’re unsure where to start, check this out: How to Get Clients With LinkedIn.
7. Don't Be Afraid Of Sales.
Remember how I explained that entry level financial advisors are often to shocked to find that there’s a lot of prospecting and marketing involved in this career? Well, the same goes for sales.
The definition of “sell” is “to persuade someone of the merits of”. This means a large part of your career as a financial advisor will be spent persuading people to do business with you.
ALSO READ: 7 Reasons Why Most Financial Advisor Sales Training Completely Fails
8. Don't Let Your Inexperience Bother You.
One of the hardest pills to swallow for financial advisors is this…
Your experience (for the most part) does not matter.
Does it help? Sure. But I know new financial advisors who are making more money and making more of an impact than people who have been in the business for ten or twenty years.
Just because someone has been a financial advisor for ten years does not mean he or she has ten years of experience.
Because that person could truly have one year of experience repeated ten times.
And by working with countless financial advisors, I’ve discovered a few painful truths…
… your credentials don’t matter as much as you think they do….
… your experience doesn’t matter as much as you’d like it to…
Because the most important thing, from what I’ve seen, is a market-to-message match.
Aka speaking directly to your niche.
That’s how newer financial advisors are able to blow the experienced ones out of the water… and it’s how experienced advisors are able to skyrocket their results.
9. Ignore Most Of The "Advice" Out There.
There are a lot of “experts” and “gurus” out there who promise to give financial advisors some magic silver bullet which will help them solve all their problems. Most of these people are full of crap. If it really was that easy, everyone would do it.
I make no bones about my products and services. They will not work for everyone. I rarely accept anyone as a private client, and I make it clear that my Inner Circle newsletter is meant only for a rare group of financial advisors.
Also, do yourself a favor and ignore other people’s opinions. Most people literally have no idea what they’re talking about. I recently saw someone post his email follow-up on social media and asked people in his network to critique it. Everyone was throwing out their “opinions!” and giving this poor guy terrible advice.
Be very picky about where you get your advice.
10. Invest In Yourself.
One of the biggest regrets experienced financial advisors share with me is that they wish they invested in themselves more. Investing in yourself is one of the keys to succeeding as a financial advisor because it shortens your learning curve and gives you new ideas to implement in your business.
You can either invest TIME or you can invest MONEY. If you’re an entry level financial advisor who doesn’t have much money, you’ll have to invest your time. Hit the library. Start reading articles (like this one) and listening to podcasts (like my “Financial Advisor Marketing” podcast).
Be frugal with your time and invest it in areas which can give you a positive return. This is critical because, as a financial advisor, your income is closely related to how you spend your time and how productive you are.
When you choose to do one activity (such as watch mindless TV) you are also choosing not to spend time on other activities (such as reading a book about marketing) that could be beneficial for your professional development.
And even though most of my products range from $100 - $1,000, I offer Your First Year as a Financial Advisor for only $20.
Because I realize that new financial advisors may not have a ton of money to invest in themselves right away. So, I priced it low enough so anyone can afford it. And if you’re a new financial advisor who isn’t willing to invest twenty bucks in yourself… well, maybe you should look for a new career.
Because it “costs” less than a tank of gas and significantly less than a dinner and a movie. And I say “costs” because it really shouldn’t cost you anything - it should pay for itself again and again.
In other words, make sure you invest both your time AND your money to grow as a financial advisor.
If you’re interested, check that out here: Your First Year as a Financial Advisor