Would you say Financial Advisors are a respected career or just salesman hawking life insurance and annuities to people ? Would love to hear the B&I boards thoughts .......

very helpful, much obliged

I don't use one right now, as an accountant serves my needs. I have considered using a FA when I get longer in the tooth, and I need my wife to get sound advice. Have also considered a trust.

Recommended a fa to my inlaws.

You get what you pay for.

Mine advised me to get an additional term life insurance policy as my income and family grew. I never thought there was anything shady about it. He may have made some money from the deal but I do agree I needed more life insurance and think it was good advice. I guess it all just depends on your situation but I am very happy with the services mine provides and we have developed a great relationship.

Edit to add he is a CFP and Fiduciary

If he's a true fiduciary (fee-only) then he didn't receive any compensation for the life insurance policy.

neutics said:

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If he's a true fiduciary (fee-only) then he didn't receive any compensation for the life insurance policy.

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Yes, fee only.

I'm a FA who is a true fiduciary. Fee-only financial services...no insurance or annuity product sales.

I refused to go into that business, but that's not to say that they're all purely "salesman". But I would recommend you go the fee only route if looking for a FA that truly 100% looks out for your interests.

neutics said:

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If he's a true fiduciary (fee-only) then he didn't receive any compensation for the life insurance policy.

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You don't fully understand fiduciary

tarhee200 said:

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I'm a FA who is a true fiduciary. Fee-only financial services...no insurance or annuity product sales.

I refused to go into that business, but that's not to say that they're all purely "salesman". But I would recommend you go the fee only route if looking for a FA that truly 100% looks out for your interests.

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Tell me, Tarhee. What's makes you a "true" fiduciary? Be specific like this is a court room and not just a marketing brochure your company printed.

Stagecoach said:

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neutics said:

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If he's a true fiduciary (fee-only) then he didn't receive any compensation for the life insurance policy.

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You don't fully understand fiduciary

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Sure I do. Everyone tries to call themselves a fiduciary now, including the insurance salesman and B-D's, and I fully recognize that all of us have certain conflicts of interest. Thank the CFP Board for watering this term down tot he point that it means almost nothing.

Also see you have a history of self-righteous indignation on this board, so yes I'm a CFP among other things.

Ha...I'll give you the "official" explanation and then a short layman's terms answer:

Official - We're a registered investment advisor (RIA) firm that is legally required to serve their client's best interests ("fiduciary duty"). We are not a broker/dealer. We do not sell "products" (insurance or otherwise). We do not receive commissions for any investments in the portfolio. Non-RIA's generally are only required to steer you towards "suitable" investments/products (which allows a window for them to say "hey, option X and Y basically accomplish the same financial goal for the client, but X throws me an extra 2% commission, so I'll just put him in X").

Unofficial - Like I said above, we are completely fee-only. We only get paid for providing advice/managing your portfolio. We do not get paid by anyone (institutions, etc.) for carrying certain funds in our portfolio solutions. I'm required to report all my personal investing activity to ensure no "funny business" is going on. For any outside needs (legal, insurance, etc.), we advise the client if there is a need for those services, but we do not recommend any one, specific source to go to (and certainly don't get paid a referral fee). We provide a few different options of attorneys/insurance brokers who we deem creditable to even eliminate the appearance of favoritism towards a particular vendor. We even have pretty strict reporting requirements on accepting gifts from clients or business connections (i.e. value of a dinner or going to an Astros game, etc. has to be disclosed if over a certain amount, etc, etc.). Very tight restrictions on anything that gives the appearance of a preferential business relationship.

Hope that helps! Again...it doesn't mean all non-RIA's are swindlers or won't act 100% in your best interest. It just means that they are not legally required to. I feel like the safer route is always to go with an advisor who is bound to act under the fiduciary standard.

I assume you're talking about whatever bear trap I just walked into by responding....

I haven't posted in the investing Texags realm often, so be gentle. Was just trying to casually help explain. Hopefully I'm not stepping into an ongoing battle that has been litigated ad nauseam on here already.

i wasnt trying to cause conflict, headed down a path to be a FA myself, doing some research and there is alot of flack towards FA's

No worries Hedge...I hope I was helpful.

I would say the negative stereotype is heavily related to the insurance/annuity sales that adviser-brokers were pitching to clients. A lot of permanent insurance which functions as a hybrid insurance/investment vehicle, but generally carry fairly high premiums (and commissions for the broker).

I'm still fairly new to the industry (worked as a consultant in the Big 4 world for a while previously). I've been happy so far with the switch. But you're taking a good approach doing some due diligence and research up front.

tarhee200 said:

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I'm still fairly new to the industry (worked as a consultant in the Big 4 world for a while previously). I've been happy so far with the switch. But you're taking a good approach doing some due diligence and research up front.

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Did the change from Big 4 consulting equal a pretty big income hit in the initial year or two? Would be curious what your transition experience was like.... I often think of getting out of corporate finance into the FA world as that is something I am much more passionate about but with a wife who stays home with 3 kids not sure if I could afford to do so.

hedge_zer0 said:

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i wasnt trying to cause conflict, headed down a path to be a FA myself, doing some research and there is alot of flack towards FA's

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There's flack in places like this board where you have a concentration of people that are interested in managing their own investments and have the time to do so. Out in the real world there's not that much flack directed at them.

I'm not discouraging due diligence. Dig deep, ask questions, and follow your instincts. With very little exception all FA's have to sell something: themselves. You're marketing yourself in some way/shape/form to attract a client base. Some sell services, some sell products, some sell both. There are different dynamics at play when you begin vs 10 years into the business.

Hopefully Stagecoach won't come in and nuke your thread by being condescending towards everyone's different experiences and advice. Beyond that, there's some smart guys in here that are in that world and that have very different paths and focuses.

Good luck with your research!

Yeah it's definitely an adjustment in the compensation area. I don't have a family to provide for yet so the switch was a little easier for me to manage, but depending on where you end up and what their comp structure is and their career progression plan, it can be quite a hit up front.

I also ended up with a firm that doesn't load you up with BD requirements from day 1. They give you a pretty decent salary for a couple years and then gradually start to move you towards bringing in some new business. Honestly, it's really a unique situation which is a big part of the reason why I ended up here.

Happy to explain more via DM or off the public forum if you've got other questions.

whats the difference between FA and WM ?

Adding my comment just to follow the thread.

You definitely get both. Generally speaking, folks who work for insurance houses call themselves FAs, but are in fact salesman who see insurance (particularly permanent policies) as the answer to all life's needs and then some.

hedge_zer0 said:

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whats the difference between FA and WM ?

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They are one in the same by definition. However, WM's won't work with you unless you are able to start with a 7-figure investment balance. Their clients are primarily high net worth individuals.

They have access to other investment opportunities (commercial property, company investments, etc.) that are better able to guarantee returns and preserve wealth.

commercial property, meaning REITS?

hedge_zer0 said:

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commercial property, meaning REITS?

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Yes, and private opportunities with other high net worth individuals of similar risk appreciation, investment history . . . not stuff with ticker symbols.

I think many of these guys come from the Big 4 accounting firms and other large security firms.

Are you interested in WM? What are you doing now?

im an associate, working on cfp, maybe cfa down the line

hedge_zer0 said:

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im an associate, working on cfp, maybe cfa down the line

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I would have loved a career in FA/WM. I assume you have passed all your tests. Good luck to you, I"m sure there are some guys on here that would be more than happy to help you, but you better get your AgTag locked in place.