Every few weeks or so, I get an email from someone who is considering a career in financial planning. I am positive that they regret asking me as soon as they read my reply, because for the most part, I end up discouraging people from the career.
Here’s how I see it…I love-love-love animals. If you told me I could take a vacation with close access to tigers, maybe even feed and pet them, I’d totally sign up. Completely fascinated. BUT…I am not a veterinarian. I’m really good in a crisis, but I realized early on that I don’t have the wherewithal to emotionally detach in an animal crisis. I could learn that…but how would that change my sense of wonder and connection to animals? I’d need to hold something back.
Would you want your sense of wonder over personal finance reduced or eliminated? I get emails from people who love-love-love personal finance (honestly, I don’t get this at all). This means they should be a financial planner, right? Maybe not. When I did a lot of acting in high school and college, the professional actors would always tell us, “If you can do something else, do it. Acting causes a lot of heartbreak, so if there is something else you think you’d be happy doing, maybe you should go do that.” I feel the same about a career in financial services.
The majority of clients don’t love personal finance. If you can translate your love of personal finance into something accessible to the Every Person, great—because your advice to a person who LOVES personal finance will be vastly different from what you tell a person who doesn’t love it. If you can’t connect and understand people who don’t love it, you might be better served joining an investment club, so you can be with people equally excited about the topic.
Do you have an entrepreneurial aptitude? If you don’t, you might end up stuck working on paperwork in someone else’s practice.
My path isn’t typical of most planners, because I don’t sell products or charge for asset management…and actually, many traditional planners think I’m a weirdo because I don’t do those things. In the “traditional” financial planner world, it’s more about selling that it is about planning (which is why I left). Most people who contact me about a career are excited about earning their Certified Financial Planner® practitioner license. However, you have to work in the industry two years (and take 5 or 6 pre-tests) before you’re allowed to sit for the major, two-day test.
So you have two paths:
- Start in a new planner program with a broker dealer. This is how I started…then I sold my practice and left 5 years later.
- Start working for an existing planner practice. Learn the back office side of the business and take on the client service aspects of the practice for the head planner.
When I was with a broker dealer, I was in charge of screening, hiring and managing new advisors. It’s really difficult to watch someone’s illusions shatter about the business—thinking they came to help people, and then realizing you have to go find those people on your own. Some people aren’t cut out for it.
You have to really want it, because you’re building a practice from scratch, like any entrepreneur. I actually think it’s a bit more difficult than for a typical entrepreneur because there are so many clichés (and fears) about financial services. I’ve met several people who have approached me to do specifically what I do (just advice, no products) but they tend to bail out because they can’t generate the clients they need.
You have to go in with your eyes open and REALLY want it. It’s not something you fall into because you think it might be fun (unless you’re independently wealthy and have time to spare).
I consider my work a calling, and I have never thought there was an alternative to helping people plan their financial lives. Well, maybe helping people plan their entrepreneurial path and get right with money…but those things are byproducts of the primary calling. I consider my practice successful NOT because I understand and love financial planning, but because I understand and love entrepreneurialism…and I committed 100% to this path. There has never been a career alternative to working for myself.
If you’re interested in a career in financial services, here’s what I encourage you to do:
- Interview CFP®s with traditional practices…because you would likely start working in a practice under another person. That will give you an idea of what your day-to-day might look like, plus build a few contacts who could hire and sponsor you for the CFP®.
- Assess the industry. When I started my career, I assess the new advisor program at 8 different firms and interviewed with each one of them before I made my choice. That was A LOT of due diligence, but it paid off in terms of knowing what to expect my first year in the business. I ended up getting more clients than anyone else my first year, because I was ready to go from day one.
- Take an aptitude test. Before I became a planner, I took an aptitude test that told me I would be great at connecting with clients and marketing, but that I would SUCK at selling things to them. That test was pretty prophetic.
- Build your “start up” reserve. If you’re transitioning from another career, you’re going to need a good cushion for the first few years. Of course, if you love personal finance, you probably already know this.
- Assess your entrepreneurial aptitude. How would you be working for yourself? Ask your spouse how they feel about it. What would cause you to want to quit? These are important questions to ask yourself, and you might want to check out my post on 10 Reasons Self Employment Is Not For You.
Do you have any career questions or some advice? Leave it in the comments!
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