Marine Officer looking to transition into Finance

[gsgarcia1]

Hello everyone,

I am looking to make my transition into the civilian sector and the path that has captured my attention is Financial Advising and eventually Certified Financial Planner. I have always had a passion for finance as well as helping the Marines that I was in charge of to make good decisions with their savings/retirement investing (mainly TSP and Roth IRAs). I am an infantry guy by trade so I currently do not possess any certifications.

I have been looking into Financial Advisor trainee programs at a few firms/agencies. I have applied to Merrill Lynch's PMD program as well as made initial inquiries with Northwestern Mutual and Raymond James. I also have a phone interview with State Farm this afternoon. I understand that beginning a career down this path is very much sales, especially at the beginning. I know it will be a lot of hard work, but I am more than willing to put in the effort into a career field that I believe in. I have two reasons for posting this today :

1) I really want to be in the business to truly help others make good choices about their future. Am I deluding myself and getting into a position where I will be forced to compromise integrity and JUST sell a given company's product with little regard for the client's desires? How do I avoid that?

2) If my goal is to help out "the middle class," so to speak, am I better off going for a smaller agency like State Farm or Edward Jones than say Merrill Lynch.

It sounds cliche but the appeal of becoming a financial advisor, for me, is to educate and help people and I

[bottlecap]

This thread seems to have some helpful suggestions: viewtopic.php?f=2&t=106025&newpost=1541127

But basically, the path you are choosing with any of those "advisors" entails selling products that are bad for people (in the sense that they are unreasonably costly or unnecessary). I don't know whether State Farm or Edward Jones market more to the middle class, but their products are likely just as expensive. So selling for them wouldn't exactly be "helping" the middle class even if that were their target market.

JT

[Mel Lindauer]

Thank you for your service and Semper Fi from a Marine veteran.

I've asked Rick Ferri to respond. He's a veteran fellow Marine Officer who initially went the same route that you're considering.

[Rick Ferri]

When I left active duty in 1988, I joined a nationally recognized Wall Street firm (Kidder Peabody, now UBS). After 5 years, I went to another firm (Smith Barney). Stayed there 5 years and then started my low-fee adviser firm (as an RIA, not a broker)

The benefit of a large firm is that they pay salary and benefits while you're in training and for a few years after. It's tough being in a brokerage firm when you know what they are selling isn't in the best interest of investors, but it's a way to get experience and some clients and I'd probably do it again if I were to start today. My two cents.

Rick Ferri

.

[wilpat]

Semper Fi ---- 1957-1965

[gsgarcia1]

Thank you all for the replies thus far. Mel, thanks for bringing Rick into the thread, and Semper Fi: It was encouraging to read. That is exactly the type of path I would see myself going down. I know there may be necessary hurdles on the front end as Rick mentioned, but I welcome the challenges for the greater good.

Anyone that has any thoughts, please keep the thread going as I am eager to learn all I can in any forum in order to make the most informed decisions

Gabe

[Jason Hull]

Thank you all for the replies thus far. Mel, thanks for bringing Rick into the thread, and Semper Fi: It was encouraging to read. That is exactly the type of path I would see myself going down. I know there may be necessary hurdles on the front end as Rick mentioned, but I welcome the challenges for the greater good.

Anyone that has any thoughts, please keep the thread going as I am eager to learn all I can in any forum in order to make the most informed decisions

Gabe

Gabe--

I'm a former Army officer, and the whole reason I wanted to get into financial planning was because I saw soldiers getting screwed (can I say that? If not, mods, please edit!) by some of the shadiest money people around - payday lenders, the former military officers and NCOs who prowled the post selling high load funds, crappy insurance products, etc.

So, by definition of the things I hated seeing soldiers get roped into, I went down the path of a fee-only, hourly financial planner. However, I took a longer route to get there, via business school and then starting/selling a company before taking/passing the CFP(R) exam and getting my one-man band...err...shop accredited as a RIA firm.

Regardless of the route you take to get there, you will be well-advised to get some experience in sales. It doesn't have to be financial products (and I also don't believe that all people who sell financial products are bad, but there are a lot of bad ones out there), but it does have to be consultative selling. Financial planning is about having a relationship between you and your client that is strong enough that the client is going to feel comfortable opening up the kimono and showing all of their personal financial information. You have to be able to think in terms of benefits and value because, for most people, ponying up a couple of thousand isn't a decision that's taken lightly. I have found that there are many cases where I am half financial planner and half marriage counselor, and you have to be prepared to build up a relationship to enable that if you want your clients to succeed.

Good luck. I wish there were more people who could creditably serve the military. I don't know if he pops on here at all, but a good person to know is Doug Nordman: http://the-military-guide.com

[danieljquirk]

Love the Marines!

A couple of thoughts:

1) Going to work for the large wire house is definitely a deal with the devil. You'll get good experience, but the products and strategy aren't the best for clients.

2) Is it possible to start you're training/planning while you are still a Marine and getting paid as a Marine? Will the Marines allow you to "moonlight" on the side as a budding financial planner? Perhaps the best solution is one where you gradually transition over the next few years. First step would be to spend a lot of time reading the bogleheads website, wiki, and a couple of the suggested books and actually learn how to advise people. Bogleheads and its members are AMAZING--they are among the best and smartest investors in the world, and it is fairly easy to learn. You will learn A LOT, and after a few weeks, you'll be more knowledgeable than 99% of financial advisors out there.

3) The advantage of developing the practice while you are a Marine is that you have access to a lot of your fellow soldiers. You might be able to develop a very substantial referral-based network in a short amount of time, particularly if it is based on a "bogleheads" philosophy.

4) One of the nice things about being a financial planner is that as long as you have a computer and can access the internet, you can do your job--so even if you get deployed, you can do your job. I would just explain to your clients that if you do get deployed, there may be times where it could take a couple of days to respond to a request from a client. But if you set up the business and investing strategy properly, there should be very few situations where your clients absolutely need something done immediately.

5) If you want to set up your own RIA (registered investment advisor), you'll have to register with the state where you reside. To set up an RIA, you will be required to pass the Series 65 exam, which costs $135 and will require a few weeks of studying. I would recommend going with Schwab as your RIA partner/custodian. (That is who the vast majority of independent advisors use, including Rick Ferri's shop, Portfolio Solutions.) If it gets to that point, I can introduce you to someone at Schwab who would likely be thrilled to work with an active Marine.

6) Another possibility would be to partner with an existing "bogleheads" RIA. This would probably be much easier than setting up your own RIA. I can provide some suggestions here as well.

6) I would sign up for the CFP (certified financial planner) exam. You won't be able to use the CFP acronym until you get the appropriate amount of experience (3 years of financial planning or investment experience), but you can certainly tell people you've passed the exam, and eventually you'll get to use the designation, which will be helpful once you are out of the Marines.

7) Personal note: I've often wished I had started my career in the military--this strategy I've laid out to you is how I would have made my transition out of the military, assuming they actually allow you to moonlight on the side. Even if they don't allow you to moonlight, I would still consider doing it--just officially charge $0 for your services while you are an active Marine. Maybe your clients can pay you in cigarettes. But be sure to tell them that you will charge a real fee once you are out of the Marines. Charging $0 might be an interesting way to initially gather a lot of assets as well.

Dan

[Calm Man]

My 2 cents. You can work for a large or small brokerage and unfortunately the only way you can make money is either via assets under management, fees on selling products or a combination of both. Almost by default anything you sell will have a profit motive in one way or another as you have to be paid, as does the supervisor, other employees and shareholders. It is admirable to want to help the middle class. If by that you mean people with 100 or 200K in assets, you will not be able to reasonably handle those accounts as there is no money to be made. If you really want to do this, you probably need to bite the bullet as Rick suggests and gain the needed experience. Good luck.

[david99]

Why don't you try to get a job at Vanguard? You can get some experience and your CFP.

[gsgarcia1]

Once again, thank you to all of you that are contributing to this thread.

Jason, I feel your pain on the topic of seeing Marines and soldiers get screwed by companies that charge extraordinarily high fees. I just finished up Company Command in the Infantry, which means I was in charge of 190 Marines. I took it upon myself to educate them as best I could on retirement investing, Roth IRAs and most importantly, the Thrift Savings Plan (military version of a 401(k))..and this is where a lot of my passion for getting involved with Financial Planning/Advising is stemming from. I am also very much with you on your suggestion to acquire sales experience. I just completed a hiring conference and I conducted two interviews for sales jobs, one of which was for Allergan Medical supplies. Both interviewers mentioned that they could see me doing well in sales and more and more I am understanding that sales (and like you said, the industry does not necessarily have to be finance) is the life blood of our economy. Also, I completely understand your guidance about the consultative process. That is one of the appealing things to me as I look at a financial advising/CFP future. Again, I know it sounds cliche, but my goal is really to help educate and support people through integrity.

I have received follow up, on site interviews for Merrill Lynch as well as Northwestern Mutual - both are for financial advisor positions. Much as Rick said early on, and others have agreed with (Calm Man), I will probably have to put in the time with these larger companies on the front end to gain the experience and expertise to get what I desire on the back end - actually much like Rick. I definitely plan to acquire my CFP license and I am excited to continue learning about this industry.

Dan, your points are well taken and I truly wish the Marine Corps would allow me the time to moonlight on the side. But was I to stay in, I would have 190 Marines I was in charge of and another, quickly approaching, deployment to Afghanistan. I am fortunate enough, though, to have about 80 days off (called terminal leave) beginning in two weeks. I will use that to follow your advice on reading this website up and down, left and right to utilize the wealth of knowledge available here. Both of your #6 suggestions were very appealing to me. I would absolutely be interested in partnering with an existing "boglehead" RIA and learning more. You mentioned you could possibly provide suggestions - anything you had in this arena would be much appreciated.

Lastly, David, I have looked on the Vanguard website and through LinkedIn. I have come across Internal Sales Rep and High Net Wealth Managers. I will be applying for the Internal Sales Rep, but was curious if you may have any other connections along that route.

Again Gents, thank you for taking the time to keep this thread going. I appreciate your insights, suggestions and support. I look am looking forward to entering this industry.

Gabe

[Beat The Street]

I started out at a life company which is pretty horrible but they teach you to sell, all they cared about was generating commissions though. They knew what products they would recommend before they ever met with the clients. I left after six months and found a great position as an advisor at a community bank, we use Raymond James for our brokerage (and I am a big fan of RJ). We aren't fee only but 90% of the accounts I open are fee based and i dont collect 12-b1s off them. No one tells me what products I have to use or how much I have to bring in every week. Customers walk in wanting advice and I don't feel as if I have ever sold anything. If someone chooses not to do business with me it's not a big deal because there will always be plenty of other customers. My pay is still based on fees and commissions but I use almost all vanguard funds as well as Ishares and bridgeway. A bank is a great place to start in my opinion, if you can find a local bank with a brokerage. Don't get stuck slinging annuities and non traded REITS though. Just always do what you think is right and invest in the funds you recommend to customers.

[RadAudit]

A bank is a great place to start in my opinion, if you can find a local bank with a brokerage.

You also might want to look at a similar position in a local credit union. We have a number of service personnel in the local area and a CU that is focused on the military. I'm sure there are similar CUs where ever there are military personnel.

[SNR]

My 2 cents. You can work for a large or small brokerage and unfortunately the only way you can make money is either via assets under management, fees on selling products or a combination of both. Almost by default anything you sell will have a profit motive in one way or another as you have to be paid, as does the supervisor, other employees and shareholders. It is admirable to want to help the middle class. If by that you mean people with 100 or 200K in assets, you will not be able to reasonably handle those accounts as there is no money to be made. If you really want to do this, you probably need to bite the bullet as Rick suggests and gain the needed experience. Good luck.

I don't understand why you believe assets under management or fees is the only way to make money as a financial advisor. Why can't one have a business where he charges an hourly rate for objective financial advise to middle income clients?

thanks

[Beat The Street]

My 2 cents. You can work for a large or small brokerage and unfortunately the only way you can make money is either via assets under management, fees on selling products or a combination of both. Almost by default anything you sell will have a profit motive in one way or another as you have to be paid, as does the supervisor, other employees and shareholders. It is admirable to want to help the middle class. If by that you mean people with 100 or 200K in assets, you will not be able to reasonably handle those accounts as there is no money to be made. If you really want to do this, you probably need to bite the bullet as Rick suggests and gain the needed experience. Good luck.

I don't understand why you believe assets under management or fees is the only way to make money as a financial advisor. Why can't one have a business where he charges an hourly rate for objective financial advise to middle income clients?

thanks

You would have to do much higher volume if you charged hourly, and just because you hang out your shingle doesn't mean people start lining up for your services.

[SNR]

My 2 cents. You can work for a large or small brokerage and unfortunately the only way you can make money is either via assets under management, fees on selling products or a combination of both. Almost by default anything you sell will have a profit motive in one way or another as you have to be paid, as does the supervisor, other employees and shareholders. It is admirable to want to help the middle class. If by that you mean people with 100 or 200K in assets, you will not be able to reasonably handle those accounts as there is no money to be made. If you really want to do this, you probably need to bite the bullet as Rick suggests and gain the needed experience. Good luck.

I don't understand why you believe assets under management or fees is the only way to make money as a financial advisor. Why can't one have a business where he charges an hourly rate for objective financial advise to middle income clients?

thanks

You would have to do much higher volume if you charged hourly, and just because you hang out your shingle doesn't mean people start lining up for your services.

What you wrote is accurate but does not the address the point in question. I questioned the statement that "......the only way to make money is either via assets under management, fees on selling....". I agree that one won't make as much and in the beginning one will struggle building the business..... but why can't an individual charging $75-200 per hour for advice or writing a financial plan not be able to make a living?

[Beat The Street]

You could make a living that way, I misunderstood. I believe Allan Roth is mostly an hourly planner and I would imagine he does very well.