If I knew then what I know now. After some experience in the financial advisory industry, I learned a lot about how it works from the inside and I love helping out others looking to join the industry. Its one of the few careers where the pay is high, there are not many barriers to entry, and employment opportunities are expected to grow much faster than average.

According to the U.S. Bureau of Labor Statistics. from 2010 to 2020, the number of financial advisors is expected to grow by 32% (much faster than average). The exact number of jobs is expected to increase from 206,800 to 273,200. The average salary of a financial advisor was $64,750 per year in 2010.

Financial Advisor Job Growth

1. Proceed with caution: There are many firms out there looking to take advantage of you.

Be wary of commission-only positions where the firm encourages you to sell insurance and investment products to your friends and family. It can ruin relationships and often times you dont know enough about those products yet. If the products dont work out for your friends and family, they may be stuck with the negative effects for years after you leave the company. With the standard turnover rates for these positions, it is likely that you will leave quickly.

I wont mention the companies because I dont want the liability, but in my opinion, they are the ones that advertise their jobs the most frequently and dont require any experience. They can do this because many of these firms have an extremely high turnover rate for these positions (upwards of 80%) so they are consistently hiring to replace those who left.

This does not mean that some will not become successful through this route, but just be aware that the odds are you will not be successful and will be out of the industry within 5 years. The biggest thing contributing to your success at these positions will be your sales ability.

2. If you are not good at sales or cannot learn within a matter of months, youre gonna have a bad time.

Its hard to start a career as a financial advisor because no matter how great you are at recommending sound financial decisions and tools, at the end of the day you have to bring in new clients. That means most positions will require that you go out and try to gain clients through calling, emails, meeting in person, public speaking, seminars, and other forms of marketing.

Most training programs and offices require that you gain a certain number of clients in the first 6 months, or you will be let go. Of utmost importance is the ability to gain clients and sell products and/or your services, so if you dont have confidence to pursue and ask someone to trust you with their money, this job is not for you.

3. There is a big difference between the types of financial advisors.

There are four main types of financial advisors:

Commissioned These financial advisors are often referred to as Brokers, agents of Broker Dealers, or Registered Representatives. The financial advisor receives a commission for selling an insurance or investment product, such as mutual funds, variable annuities, structured products, and insurance. In these commissioned transactions, the financial advisor is not required to act in a clients best interest, but just needs to make sure the investment is suitable. This can lead to conflicts of interest where the advisor is selling a financial product that is suitable, but has higher fees and a higher commission than other options.

Fee-only Fee-only financial advisors only charge fees by a percentage of assets managed, a retainer, or by the hour, and do not make a commission for selling insurance or an investment product.  An example of this would be if a client has $100,000 in their account, the advisor could receive a management fee of 1% per year, or $1,000. Fee-only advisors are required to act in a clients best interest (a fiduciary standard is the technical term for it). Most fee-only financial advisors heavily advertise that they are fee-only, so you can easily learn if this is the case by visiting their website.

Fee-based   Fee-based advisors sell both products for a commission and have the ability to charge management/hourly fees. It is a combination of the two above options. This creates some confusion, because at certain times they are required to act in a clients best interest, and at other times they are not.

Salaried Another situation that is becoming more common is salaried employees that can receive bonuses based on the products they sell or assets they gather. This is a form of advisors that has popped up more at banks and credit union locations. They often receive bonuses paid in one of the three ways mentioned above.

Keep in mind, a advisors title or designations, such as CFP, CFA, financial advisor, or financial planner does not indicate what their fee arrangement is. These titles are completely independent of the type of fee structure.

4. You can go independent and have your own business.

Start Your Own Independent Business

Even though you may start under a companies brand and with their training, after establishing your clients you may be able to start your own independent business. Can you take your clients with you? The industry standard answer is yes, but some companies require you to sign agreements that dont allow this. If the firm you are currently at or potentially joining has signed on to the broker protocol. you may be allowed you to take your clients with you if you join another firm that has also signed it if you move your clients in a very specific way.

Why would you want to do this? At some of the larger companies, your payout (the percentage of commission or fees you keep) can be as low as 25%. As an example, with a 25% payout, if you make $10,000 in commissions or fees, you are only able to keep $2,500. If you go independent your payout can be as large as 100%, and you can keep the whole $10,000, but you dont have as much marketing and overhead covered by the company. You also dont always need to have the startup money saved to go independent. Many independents are provided big upfront bonuses when they move with their clients.

5. You can become set for the rest of your life and pass on your wealth to your family, or sell for a big payday.

Gathering clients takes years, but once you have an established book of business, it becomes a real asset that produces income every year. Many advisors are able to take this asset and transition in another family member as an advisor to service these clients after they have retired. Also, you can sell you book of business to an unrelated advisor and transition the business to him or her for a substantial sum of money.

6. Its a cut-throat business.

Just because the industry is heavily regulated by both the SEC and FINRA, does not mean that other advisors wont play dirty. The competition is stiff and the money is lucrative, so some advisors try to poach each others clients, even if they have to stretch the truth and do unethical things to make that happen. Watch out!

7. It can be extremely rewarding, and not just financially.

The best part is you get the opportunity to help regular people who will rely on their savings to live a long and healthy life.

Its not like some other financial careers where you help really rich people get richer. If you can give excellent financial guidance, you can help people make hundreds of thousands of dollars over their lifetime and provide them with a comfortable retirement.

You can really help

8. Where the best place to start is