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So You Want To Be a Financial Advisor | Learn How to Make Big Bucks

By Edited Nov 13, 2013 0 0

So You Want To Be a Financial Advisor?  Great, you have chosen a career path that offers a lot of flexibility, the potential for big paydays and an opportunity to positively impact people’s lives.  Now this all may sound good to you, why wouldn’t it.  However, even with all of its positives, the world of a financial advisor isn’t all golf and business lunches.  In order to be successful it requires a lot of hard work, dedication and a love for sales and marketing.  The best of the best in this industry are great networkers and personal marketers who happen to handle people’s finances.  Get this formula down and you will be a success.  Don’t, and you will be looking for work elsewhere in short order.


What Level of Education is Required:  Most reputable advisory firms will require at the minimum a bachelors degree.  The degree however can be in anything from sociology to finance.  The rigors of financial advising require little in the way of financial acumen, certainly nothing that can’t be learned quickly.  Besides a four-year college degree, a budding financial advisor will need to pass the Series 6 or Series 7 licensing exam as well as a Life and Health insurance exam before they can practice. 


A Day in the Life of a Financial Advisor:  So you have decided that you have the educational background to pursue a job in the financial advisory world, but what does a financial advisor do?  As a first year advisor, your title may be something like “Marketing Associate.”  As a marketing associate you will generally be tied to a senior advisor for whom you will be setting appointments.  How do you find appointments to set?  Cold Calls.  Yeah, not quite as glamorous as you had hope, huh?  This is the life of a first year, heck, first few years advisor.  Your job will be to “bang the phones,” searching for leads and setting up appointments for the person above you.  You will be allowed to venture out on some of these sales calls, which will be your on site education in how to make money in the business.  You may need to work weekends sending out marketing pieces to prospects or drumming up business in other ways such as seminars or speaking engagements.  You will eat sleep and breath sales and marketing.  Don’t fool yourself into thinking that you will be trading equities.  This is a sales job.  Nothing more.  As a seasoned advisor, with 3-4 years of experience you will likely have an associate working under you who will be responsible for filling your appointment book with prospect calls. Your job of course is to close these deals.  You will be face to face with clients all week.  It is flexible, but stressful because you wake up January 1st without a dime of guaranteed income.  Eat what you kill.  Get it?  Learn EXACTLY what it takes to succeed in sales with Jeffrey Gitomer's Little Red Book of Selling: 12.5 Principles of Sales Greatness



How Much Money Do Financial Advisors Make:  Financial advisors are compensated based on their sales.  They are responsible for selling life insurance and other financial products to their prospects.  Since this is a sales job, the sky really is the limit from an earnings standpoint.  Your income will be wholly dependant on your ability to close deals.  Seasoned advisors with a large book of business and 20 or so years of experience can earn upwards of $1 million per year.  5 years of experience typically generates incomes of $100,000 or more.  The first few years are typically very lean however.  A new advisor in ramp up mode will find sales to be few and far between until they fill their sales pipeline.  So unless you have parents with a lot of connections that you can sell to right away, don’t expect to make big bucks in your first couple of years.  It will be a war of attrition.  The turnover ratio is over 60% for new financial advisors.  Weathering the early storms are key. 


Who Do Advisors Sell To:  Financial advisors will honestly sell to anybody, but most will target the bigger fish in the sea, executives, lawyers, doctors and business owners.  These are the market segments that yield the highest return on invested time.  It may take the same amount of time to close a life insurance sale for a paperboy as it would a doctor, however the doctor’s policy would likely net the financial advisor five to six times the cash flow.  So when advisors consider their call lists, they aim for higher net worth individuals who will provide them with not only riper sales opportunities, but, better referral networks to sell to down the road.  The referrals are key.  Referral business typically accounts for half or more of a seasoned financial advisor’s sales revenue. 


How Do Financial Advisors Get Paid:  The pay structure for financial advisors depends wholly on the firm for whom they work.  Some firms push a fee based platform whereby the financial advisors earn an hourly rate for planning activities.  Other firms work on a commission only basis whereby the advisors earn money based on sales of company sponsored products.  In this case, financial advisors make a large portion of their income from the sale of life insurance products.  Life insurance generally pays advisors 50% of first year commission.  First year commission is industry lingo for the total first year premium paid by the customer.  For instance, if you sold a family a term life insurance product that costs $1,200 per year, you would be entitled to a commission of $600.  Not a bad deal.  Now if the cost of the insurance policy was $5,000 per year, you would be in line to make a commission of $2,500 from that sale.  See how it works?  Advisors also earn money from assets under management, succession planning, trust planning and long-term care policy sales.  Each of which has a pay structure unique to its own. 


So, you want to be a financial advisor still?  It is a good job with a lot of perks, but don’t fool yourself into thinking that it is all fun and games.  You will need to study the market you are targeting and saturate it with marketing in order to grow a successful business.  But don’t be discouraged, successful new financial advisors start every year, you could be one of them!



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