Financial Advisor?

[freakzi11a]

I'm a recent graduate and was interested in getting into the investment field. I was just wondering if anyone has any experience working as a financial advisor for companies such as Morgan Stanley and Charles Schwab? What should I expect during the first years and how is the potential for growth?

 

[plrpower]

I am not a F.A. but i work with them at a investment firm. I do sales. Anyhow from what I have witnessed from the feild is that most peoples only motivating factor is how much you can make. It causes to be blinded by what is realy happening. I cant speak for any place for sure but mine, I think most the people in that feild are sneaks and shady. THe hardest thing when first getting into it is getting clients. And when your only 22-23 you need to relize why would a 40 year old semi wealthy person lisen to you. Most people that have money to invest have a FA or know enough not to need one. Hope that helped some

 

[kunta]

most of what he says is true, most FA's that i know don't know shit(younger guys 2-5 yrs experience),they know just the mutual funds they are told to push and the info that is fed to them, if your a good sales person go for it.

 

[Madcow2]

You can be the finest advisor to your clients but to be successful in your job you must first get clients. Hence this position is dominated be sales people first and advisors second. Also, there is an inherent conflict in that they are only compensated when you trade. Meaning that he could theoretically put you in one investment have you hold it until you make a trillion dollars and never see a dime for his incredible work after the initial commission. The alternative and far more common side of that is that many advisors urge their clients to trade more than is optimal as trading activity brings them money (but costs the client if the trade is sub-optimal). The answer to this conflics is fee-based advisory services which take the form of small fee-based adviory shops, dedicated wealth advisors, and insitutional consultants (Mercer, Callan, etc...). They charge a flat fee regardless and as your assets grow so do their fees since they get an equivalent slice of a larger pie. The issue here is that it may be harder to get these jobs or they may want some experience. You certainly aren't going to be the lead guy on a big account anytime soon because when an insitutional client walks that's major money out the door.

I don't know if that helps you at all but that's the 10,000 foot view and the basic conflict of interest one finds at the lower wealth levels and how it is resolved further up the food chain.

 

[freakzi11a]

Thank you all for the information. I just got back from my second interview with Morgan Stanley. Seemed pretty much in line with what you guys had told me. My only other question is what kind of salary should I expect during my first year? Thanks all.

 

[kunta]

1st yr salary is pretty shitty cause you won't have too much commission income, one guy that used to work there told me you make around 5bp on all assets managed right?, your best bet would be to get a nice client base of just a few high net worth clients while your there then if you know your shit (not just what mutual funds are good) leave with your book charge them a higher fee

 

[plrpower]

25-30 first 2 years of all the guys I know. Thats why it has like a 70% drop out rate in the first 2 years. Then again this one girl knew her shit and had mad connections and was making close to 100 in 3 years. Good luck hopefully at Morgan Stanley you will have some credibilty with clients cuz of the name. Now go out there and make money. haha

 

[sawastea]

I'm in the investment bank business in Manhattan for a Top 5 firm (hint: we had our 1Q05 earning up this week). Anywho, I'm not an FC, but as mentioned, if that really tickles your fancy, good luck. Getting clients at first is difficult. The firm will also push stocks for you to sell. Build confidence with your client base, don't churn their accts and give them the best attention possible.

 

[freakzi11a]

I'm in the investment bank business in Manhattan for a Top 5 firm (hint: we had our 1Q05 earning up this week). Anywho, I'm not an FC, but as mentioned, if that really tickles your fancy, good luck. Getting clients at first is difficult. The firm will also push stocks for you to sell. Build confidence with your client base, don't churn their accts and give them the best attention possible.

Thanks for the info. If you don't mind me asking, what position do you hold within the investment bank? And how do you enjoy what your doing? Thanks.

 

[MattTheSkywalker]

One of the problems with those jobs is that most people who have money understand investing, so they don't need you. And the compensation models are not often aligned with your clients' best interest.

sawastea's advice is good - as for what he does, he is an "under the desk" assistant to his managing director. Position includes kneepads and toothpicks; he's a Florida Gaytor so he had to take the "back door" into investment banking.

I had an FA managing some stuff for me for a few years - his salary was somewhere between $100K and $150K - he worked for Prudential. He seemed to have a clientele consisting largely of older people, and was as much a stockbroker as advisor, it seemed.

Have fun with it, learn some stuff, maybe you go back to school in a few years and expand into other financial services opportunities.

 

[Madcow2]

Matt gave good advice. Gators don't belong in IB, the only time they are hired is to fill a slot so that the director has someone expendable to can in a downsize. Of course the director will express genuine regret but moreso for his now empty gimp box. <rival undergrad program - couldn't resist, sorry>

Just so you are aware the best career changer or closed indutry option (venture cap, private equity, M&A, management consult, buy-side) out there is a full time MBA from a top school. My advice if you think you might want that would be to understand what they are looking for now. Obviously, undergrad record is finished but community serivce, extracurriculars etc... help a lot as do making contacts at the programs that interest you. Of course the best of all advice is to know yourself and explore areas to figure out what it is you want to do. Even at the best schools tons of super smart applicants with great grades, GMAT scores, resumes etc... don't have a clue and spend all their time trying to "win" getting the best job as seen by others rather than the best job for them. That's a good illustration of the difference between intelligence and wisdom. This is a waste of your time and educational dollars, explore - figure out who you are, what you like, what your priorities are, and the type of work you enjoy doing. That is the most massive differentiator there is in life. If an average man does what he likes and is sincerely interested in it, he can be a star and with some balance he will die a happy man. A brilliant guy in a field where he's there to earn a paycheck (no matter how big) may end up being successful and may even become a star but he's guaranteed a long dull road. And in the end, the paycheck doesn't follow you into the grave.

 

[MattTheSkywalker]

madcow is right on - I would add, in case some of the idea got lost, that being a financial advisor is a very good way to learn a lot, too.

Early in your career, that, rather than pay, should be your priority.

 

[freakzi11a]

Thanks for all the great responses. Another question I had for all those with experience in the financial advising field is, What is the best way to build cliental? Thanks

 

[sawastea]

sawastea's advice is good - as for what he does, he is an "under the desk" assistant to his managing director. Position includes kneepads and toothpicks; he's a Florida Gaytor so he had to take the "back door" into investment banking.

Another question I had for all those with experience in the financial advising field is, What is the best way to build cliental?

Ahh, the never ending question. Many firms will give you a "list" of mid-income families that you can cold-call (aka Boiler Room), that is one way to start. Many top firms require certain things from you, including an already established list. Some firms, especially on the Risk Arbitrage side, play with the firm's own money.

Matt touched a good point. Most "wealthy" individuals already know how to manage their finances. I think a smarter move, which eventually I will pursue, is being obtaining a CFA as well as a CFP.

 

[freakzi11a]

Ahh, the never ending question. Many firms will give you a "list" of mid-income families that you can cold-call (aka Boiler Room), that is one way to start. Many top firms require certain things from you, including an already established list. Some firms, especially on the Risk Arbitrage side, play with the firm's own money.

Matt touched a good point. Most "wealthy" individuals already know how to manage their finances. I think a smarter move, which eventually I will pursue, is being obtaining a CFA as well as a CFP.

Definitely something for me to consider. What exactly is a CFA and CFP? What can I do with them? thanks

 

[MattTheSkywalker]

Definitely something for me to consider. What exactly is a CFA and CFP? What can I do with them? thanks

CFA I think is "chartered financial advisor" or something thereabouts.

Like any designation associated with quality, it quickly becomes over crowded and diluted. I shouldn't laugh too hard - I made a lot of money off of this with developing practice tests for tech certs.

I give the following advice to a lot of people:

Early in your career, learn as much as you can. In the world of financial services, there is so much information that you can never really master it all. Knowldege is power, and what a lot of younger people sometimes forget is that their KNOWLEDGE will attract the kind of people who can really make a difference in their lives.

It is the contacts you make that will lift you to your goals. Knowldege is how you make these contacts. I got a little off topic, but not really. Don't get too too concerned with your salary when you;re younger. it will come.

 

[Madcow2]

CFA I think is "chartered financial advisor" or something thereabouts.

Chartered Financial Analyst
www.cfainstitute.org
<IMO shittiest name change in the world from Association of Investment Management and Research>
Hard program.