When considering any career path, it’s important to properly manage expectations. As a financial advisor, your job is to help people become financially independent and retire comfortably. It’s a noble profession, but it can be challenging. Even so, there are many benefits to be had from this rewarding career. If you’re still deciding whether or not this is the job for you, explore some of the pros and cons of a financial advisor career below.
Pros of a Financial Advisor Career
To whom much is given, much will be required. In other words, being a financial advisor will not always be days of sunshine and roses, but the pros can far outweigh the cons if you put the work in. It’s important for you to understand exactly what you’re in for. Let’s take a look at the positives first. Here are some of the benefits of a financial advisor career:
- Personal Income: The average financial advisor makes over $90,000 per year. Many make significantly more than that. Between fee-based services and commission products like annuities and mutual funds, the earnings ceiling is high. Add that to the low start-up costs of opening your own firm and you can do quite well.
- Growth Potential: The Bureau of Labor Statistics calculates the estimated growth rate for financial advisor job opportunities is 15% over the next ten years. Baby boomers, born in the 1950’s and early 60’s, are entering their retirement years in the next decade and need sound financial planning. They are all potential clients for you.
- Client Diversity: You can pick and choose who you want to work with. Most financial advisors select a specific niche based on their experience and educational specialty. Professional athletes and airline pilots are good examples of this. They build their client base using their industry contacts, otherwise known as their “natural market.”
- Professional Flexibility: You can work for a firm or set yourself up as an independent advisor. The latter will give you flexibility to work when you choose. Since you grow your income by adding clients, you can choose to stop prospecting when you reach your financial goals—or continue to build grow your business.
- Help Others: Helping others is one of the best ways to help yourself. It can feel great to help people achieve their financial goals, and happy clients who are treated right by their advisor tend to refer their friends as well.
Cons of a Financial Advisor Career
Bask in the glow of positivity for a moment. Everything we just described to you can be a part of your new reality as a financial advisor. That said, there can also be some drawbacks, as is true for any career. Nothing good comes without a price tag, including successful careers in finance. The following is not meant to deter you from choosing this path. It is simply a reality check. Some cons of being a financial advisor may include:
- High Stress: Balance your checkbook, pay off your credit cards, then make some good investment decisions. No problem, right? Now do all of that for 100 clients. Or 300. Or maybe 1000. Add in a market crash or two and you will be stressed out. Be prepared. Regardless of what you’re feeling, your clients need you to tell them it’s okay. Outsourced financial planning can help you get your time back while expanding your business.
- Prospecting: New clients don’t just walk through your door. You’ll have to prospect for them. Phone calls, emails, conferences, and networking will be a big part of your daily schedule, particularly when you first start out. If you’re preparing to become a financial advisor, you should already be thinking about who to contact first. Lead Generation and Marketing services can help you to find and convert new leads.
- Regulations & Compliance: This is a topic that makes every advisor’s stomach turn. Every state has different guidelines. Licenses are required to sell certain financial products. The SEC enters the picture when you reach $100 million under management. Do yourself a favor and hire a compliance firm to handle all this for you.
- Continuous Education: You will be required to complete continuing education courses in order to maintain your licenses each year. This can be viewed as a con but staying current on new developments in financial services can be also good for business. Keep yourself up to date and continue learning, for your clients’ sake and yours. It’s worth it.
- Lots of Hard Work: Have you figured it out yet? It will take a lot of hard work to get up and running. More effort will be required to grow your client base and manage your practice. Most advisors put in over sixty hours a week when they first start out. Those flexible hours and hefty paychecks need to be earned. They don’t just happen.
Good Life Companies Can Help You Manage & Grow Your Business
There’s a lot work involved as a financial advisor, but you don’t have to do it all alone. Good Life Companies offers a range of services to help advisory firms establish, manage and grow their business. Now that you’ve weighed the pros and cons of a financial advisor career, reach out for assistance with your business plan, marketing, compliance, practice management, and more. Contact us today for more information on how we can help.