New career as Financial Planner late in Life?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
User avatar
Topic Author
gasdoc
Posts: 2039
Joined: Mon Nov 03, 2014 7:26 am

New career as Financial Planner late in Life?

Post by gasdoc »

I am a 54 y/o physician, not wanting to practice medicine past age 60-62. Would a new career as a financial planner make sense for 5 years or so, starting at age 60-62? I have an MBA from back in the late 90's, in addition to an MD. Does this make sense if I were able to get the various certifications while still working as an MD? Would it be possible to merge the two careers for a few years- working part time as a planner?

Thanks!
HIinvestor
Posts: 1877
Joined: Tue Apr 08, 2014 3:23 am

Re: New career as Financial Planner late in Life?

Post by HIinvestor »

What kind of planner to you envision for yourself? Would you be more like White Coat Investor and Bogleheads? Fee only financial planner? AUM % total fee?

If you are suited for the field, I can see that perhaps other professionals might find you credible, especially if you "speak their language."

I have mostly met younger financial planners, so am not familiar with too many that are in their 50s and older. If you are planning to guide folks to low E/R index funds, would you be wanting them to pay you by the hour or by the session, with rebalancing once or twice a year? I'm just curious. I had a fee only financial planner meet with me once as a fringe benefit from my job and have consulted with Vanguard, Fidelity and Schwab. I did not compensate the latter 3 -- it was part of their duties.
carolinaman
Posts: 5453
Joined: Wed Dec 28, 2011 8:56 am
Location: North Carolina

Re: New career as Financial Planner late in Life?

Post by carolinaman »

I considered a career in FP several years before I retired at age 66. I concluded that it would take years to build up a good client base and by then I would probably be ready to fully retire. It did not seem worth it to me. I felt I would really enjoy working with FP clients but I also wanted to be compensated for my efforts.

If you are only looking to work as a FP for 5 years, it may not be worth it for you either unless you look at this as more of a hobby.
User avatar
goodenyou
Posts: 3601
Joined: Sun Jan 31, 2010 10:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: New career as Financial Planner late in Life?

Post by goodenyou »

I would think that most people who frequent this site do not and would not use a financial planner. Most are DIY Bogleheads who do not extoll the virtues of a financial planner. Therefore, trying to create a meaningful career (and getting paid sufficiently) as a financial planner and maintaining Boglehead philosophy, would be difficult. Turning a passion (low cost investing and sound financial planning) into a career does sound tempting. I have resorted to limiting it to helping friends and family that will listen to me at no charge, of course.
"Ignorance more frequently begets confidence than does knowledge" | “At 50, everyone has the face he deserves”
Pizzasteve510
Posts: 635
Joined: Sun Jul 27, 2014 3:32 pm

Re: New career as Financial Planner late in Life?

Post by Pizzasteve510 »

It seems like you may want to sell a sponsoring organization on your concept first, perhaps a large hospital or health care plan. You might ask them to commit to a contract with you for a specific minimum number of hours, for which you might create for them an employee education program and be available to provide independent advice to employees.

It might be a nice way for a firm to differentiate themselves. Just my 2 cents. If you can't get an anchor account type accelerator, I agree the build up to a practice would take a while. Another idea is to seek employment by fidelity, schwab or vanguard as an advisor.
User avatar
Topic Author
gasdoc
Posts: 2039
Joined: Mon Nov 03, 2014 7:26 am

Re: New career as Financial Planner late in Life?

Post by gasdoc »

There is a higher up borkerage representative in the town where I live, but I am pretty sure my values do not allign with his in terms of giving valid advice and not up selling. By any chance, would anyone out there in Boglehead land work for Fidelity or Vanguard? If not, thank you everyone for the advice thus far!
User avatar
CABob
Posts: 5091
Joined: Sun Feb 25, 2007 7:55 pm
Location: Southern California

Re: New career as Financial Planner late in Life?

Post by CABob »

bkinder wrote: By any chance, would anyone out there in Boglehead land work for Fidelity or Vanguard?
There may well be, but, it is doubtful that they would identify themselves here.
As others have stated I think it would be difficult to establish a business and prosper in the timeframe you envision.
Perhaps contacting a FP to investigate a partnership or mentoring or assisting arrangement would work.
Perhaps Ms. Garrett of Garrett Planning Network would be of help.
Bob
ccieemeritus
Posts: 706
Joined: Thu Mar 06, 2014 9:43 pm

Re: New career as Financial Planner late in Life?

Post by ccieemeritus »

I've also been tempted to do financial planning when I retire from my high tech day job.

Being a Boglehead, I'd feel guilty to charge more than 0.5% of assets under management. So to earn $100k in income I'd have to have 200 x $100k = $20 million in assets under management. I don't see myself getting that kind of practice on a part time basis without building a full career out of it. And even then the income would be less than my current high tech job (in a high cost of living area).

So I don't think the numbers add up to make it financially rewarding. Personally rewarding? Possibly. Sometimes I think about VITA or teaching personal finance. But that would be more of a "do good hobby" than "2nd career".

More generally, now I understand why the "evil" financial planners charge what we would call a high expense ratio of 1%. I also know that plenty of people don't have the knack for financial self management and need professional (or at least outside) help. What I don't know is how to provide financial planning services to everyone who needs it without charging them about 1/7th of their expected returns.

The lack of a personal finance class in most high school graduation requirements bothers me more and more.
downshiftme
Posts: 1142
Joined: Sun Mar 11, 2007 6:11 pm

Re: New career as Financial Planner late in Life?

Post by downshiftme »

As a profession, it might be hard to get a large enough book of business to be worthwhile if you are recommending low fee index funds and Boglehead philosophy. But if you are doing it as an early retirement project to promote the concepts and don't actually need the income, it could make an interesting volunteer or part-time low paying job.
User avatar
CABob
Posts: 5091
Joined: Sun Feb 25, 2007 7:55 pm
Location: Southern California

Re: New career as Financial Planner late in Life?

Post by CABob »

What I don't know is how to provide financial planning services to everyone who needs it without charging them about 1/7th of their expected returns.
By spending time and contributing to this forum. :beer
Bob
bluemarlin08
Posts: 1561
Joined: Wed Aug 29, 2007 12:18 pm

Re: New career as Financial Planner late in Life?

Post by bluemarlin08 »

I think you might have a great idea, especially if you are financially independent. Determine how you want to get paid for your advice and I would also suggest getting licensed to broker life, disability and health insurance.
derosa
Posts: 464
Joined: Wed Jul 24, 2013 5:18 pm

Re: New career as Financial Planner late in Life?

Post by derosa »

What you are talking about is a hobby.

Do you want to go to a doctor that only wants to practice for a few years when he retires from something else.

And you have never had to sell. No matter what style you think you might bring you are selling selling selling... Any good at that?


Go for it if you want to be it is a tough tough field to get started in.
User avatar
Dutch
Posts: 1277
Joined: Thu Jun 27, 2013 2:12 pm

Re: New career as Financial Planner late in Life?

Post by Dutch »

Not apropos of the OP, but I wonder if older financial planners (lets say > 55 - 60) are by definition bad financial planners. Since they obviously weren't able to plan for their own early retirement :P
bluemarlin08
Posts: 1561
Joined: Wed Aug 29, 2007 12:18 pm

Re: New career as Financial Planner late in Life?

Post by bluemarlin08 »

Many of the older financial planners I know don't want to retire, many work half the time and earn more than they ever earned.
tibbitts
Posts: 23588
Joined: Tue Feb 27, 2007 5:50 pm

Re: New career as Financial Planner late in Life?

Post by tibbitts »

bkinder wrote:I am a 54 y/o physician, not wanting to practice medicine past age 60-62. Would a new career as a financial planner make sense for 5 years or so, starting at age 60-62? I have an MBA from back in the late 90's, in addition to an MD. Does this make sense if I were able to get the various certifications while still working as an MD? Would it be possible to merge the two careers for a few years- working part time as a planner?

Thanks!
No, it wouldn't make sense, and ranks among the worst ideas in the history of the forum.

You have an MD degree, which is a unique ticket to any number of (relatively) high-earning, low-hour, low-stress jobs. I know because my father was an MD, and found such a job at roughly the same age you are now. He missed surgery, but suddenly was never on-call after hours, had no self-employment hassles, could easily schedule vacations, and had no malpractice expenses/worries. Some days work was just a few hours, some days it cancelled entirely, but the salary and benefits came in regularly either way. He even got an employer-provided car for work (well, a slant-six-powered Plymouth Valiant with no radio, A/C, or carpet... but it was free.) So instead of using the education you worked so long and hard to obtain, you want to hit the pavement competing against a bunch of community college drop-outs peddling the latest magic financial formula. Seriously?
epitomist
Posts: 240
Joined: Mon Jul 21, 2014 2:00 pm

Re: New career as Financial Planner late in Life?

Post by epitomist »

Imagine you get a new client who just experienced a 50% increase in their portfolio and are switching to you to get lower expenses. You tell them a perfect Bogleheads portfolio and over the first year they are your client, the stock market cuts in half and their portfolio goes down by 40%.

Now imagine yourself explaining to them why their retirement plans are up in smoke but it isn't your fault.
User avatar
goodenyou
Posts: 3601
Joined: Sun Jan 31, 2010 10:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: New career as Financial Planner late in Life?

Post by goodenyou »

epitomist wrote:Imagine you get a new client who just experienced a 50% increase in their portfolio and are switching to you to get lower expenses. You tell them a perfect Bogleheads portfolio and over the first year they are your client, the stock market cuts in half and their portfolio goes down by 40%.

Now imagine yourself explaining to them why their retirement plans are up in smoke but it isn't your fault.
I would bet that the doctor can take that stress.
"Ignorance more frequently begets confidence than does knowledge" | “At 50, everyone has the face he deserves”
tibbitts
Posts: 23588
Joined: Tue Feb 27, 2007 5:50 pm

Re: New career as Financial Planner late in Life?

Post by tibbitts »

goodenyou wrote:
epitomist wrote:Imagine you get a new client who just experienced a 50% increase in their portfolio and are switching to you to get lower expenses. You tell them a perfect Bogleheads portfolio and over the first year they are your client, the stock market cuts in half and their portfolio goes down by 40%.

Now imagine yourself explaining to them why their retirement plans are up in smoke but it isn't your fault.
I would bet that the doctor can take that stress.
Maybe, but it's a different kind of stress than most doctors experience, so maybe not.
User avatar
Topic Author
gasdoc
Posts: 2039
Joined: Mon Nov 03, 2014 7:26 am

Re: New career as Financial Planner late in Life?

Post by gasdoc »

Thanks, everyone, for your perspectives. The point about the market dropping by 50% and everyone losing a lot of money really hit home. As my clients would tend to be hospital employees and other healthcare workers I knew well:
1) I would potentially tarnish a good reputation earned over several decades of days, nights and weekends, and
2) I doubt I would make a significant income.

As an anesthesiologist in modern day medicine, I would have a hard time finding the laid back situation I would like- at least in this country.

Thanks again.
HIinvestor
Posts: 1877
Joined: Tue Apr 08, 2014 3:23 am

Re: New career as Financial Planner late in Life?

Post by HIinvestor »

Might you consider teaching medicine? Nursing? Going on medical missions? Maybe teaching some form of health professionals at a community college? Being a medical director? Getting involved in public health policy? All of these areas could definitely benefit from your skills and experience and you could use your training in a different way.

If you have enough to comfortably retire, you could do whatever you choose that gives you pleasure, including any of the above or volunteering as you see fit. Many nonprofits could really benefit from having knowledgeable physicians and other professionals in their organization and on their boards of directors.

Yes, being a financial advisor would definitely carry the risk that YOU will be blamed when the market tanks and investments and net worth are suddenly, permanently reduced.
island
Posts: 1971
Joined: Tue Jul 23, 2013 1:45 pm

Re: New career as Financial Planner late in Life?

Post by island »

bkinder wrote:I am a 54 y/o physician, not wanting to practice medicine past age 60-62. Would a new career as a financial planner make sense for 5 years or so, starting at age 60-62? I have an MBA from back in the late 90's, in addition to an MD. Does this make sense if I were able to get the various certifications while still working as an MD? Would it be possible to merge the two careers for a few years- working part time as a planner?

Thanks!
If I met a financial planner who was new to the field, near retirement age, and used to be an MD I'd be suspect that s/he washed out as an MD, or didn't manage own finances well and needs a job, or is trying to win business by impressing potential clients with the MD rather than any bonafide credentials and experience.
tibbitts
Posts: 23588
Joined: Tue Feb 27, 2007 5:50 pm

Re: New career as Financial Planner late in Life?

Post by tibbitts »

bkinder wrote:Thanks, everyone, for your perspectives. The point about the market dropping by 50% and everyone losing a lot of money really hit home. As my clients would tend to be hospital employees and other healthcare workers I knew well:
1) I would potentially tarnish a good reputation earned over several decades of days, nights and weekends, and
2) I doubt I would make a significant income.

As an anesthesiologist in modern day medicine, I would have a hard time finding the laid back situation I would like- at least in this country.

Thanks again.
You're giving up way, way too easily, and greatly underestimating the value of an MD. You may not find exactly the situation that would be perfect for you in a medical-related position, but not many people have perfect jobs. You didn't really think that as an FA, you'd get to just sit behind a desk, have clients magically appear, and preach the benefits of indexing and a sound asset allocation, did you? Or maybe you did. Well, there are no such jobs. But there are lots of jobs your MD qualifies you for. Why do think, particularly since you've now had several examples of jobs that would be available to you, that you'd have such a hard time finding a situation you'd enjoy?
User avatar
Topic Author
gasdoc
Posts: 2039
Joined: Mon Nov 03, 2014 7:26 am

Re: New career as Financial Planner late in Life?

Post by gasdoc »

HIinvestor wrote:Might you consider teaching medicine? Nursing? Going on medical missions? Maybe teaching some form of health professionals at a community college? Being a medical director? Getting involved in public health policy? All of these areas could definitely benefit from your skills and experience and you could use your training in a different way.
Good ideas there. I actually am participating in a medical missions tript to Guatemala this spring. The problem is that I have become so specialized over the past 25 years that I would not be particularly qualified to do or teach general medicince. Now perhaps teaching or guest teaching at a local college or high school, in topics related to my field? Anyway, thanks, again, Bogleheads.
Last edited by gasdoc on Fri Jan 30, 2015 7:44 am, edited 1 time in total.
SGM
Posts: 3341
Joined: Wed Mar 23, 2011 4:46 am

Re: New career as Financial Planner late in Life?

Post by SGM »

Tough to develop a large enough group of clientele to make it worthwhile financially I would think. Long time financial planner and CPA relative will never retire although he can well afford to. He has too much fun and makes money hand over fist. He is not a BH type though.
uglystickrules
Posts: 85
Joined: Thu Oct 17, 2013 3:14 pm

Re: New career as Financial Planner late in Life?

Post by uglystickrules »

I know of people who have done this - former CFO's of small accounting firms, business professors, etc. - it's something that can work if you have a client base. As a doctor, I would think you would know plenty of people with enough money to develop a business. Much of a financial planner's business, or independent advisor if you decide to take a 65 or get a CFP, is based around family however. Professionals in the family without an advisor or those without any form of retirement can make good clients. You can make a good living, even write-off a home office. I would recommend it if you can commit to the due diligence of being in compliance with FINRA and other jurisdiction acts and rules, and it's an easy way to make a lot of money using passively-managed funds and sticking to a game plan.
epitomist
Posts: 240
Joined: Mon Jul 21, 2014 2:00 pm

Re: New career as Financial Planner late in Life?

Post by epitomist »

goodenyou wrote:I would bet that the doctor can take that stress.
Stress schmess. I'd be more concerned about turning people who used to be friends and coworkers into people suing you to recoup their losses. I was once sued frivolously by a desperate person. It took 18 months and $35,000 in my attorney's fees to get to court. We picked a jury, the plaintiff put on their case and rested within 2.5 hours. We went to lunch, my attorney made a motion, the judge dismissed their case.

Eighteen months of terrible stress, hundreds of hours spent on it and $35,000 flushed down the drain. And that is called winning a court case in this country.

Desperate people do desperate things. No sense putting a target on your back for them to home in on.
HIinvestor
Posts: 1877
Joined: Tue Apr 08, 2014 3:23 am

Re: New career as Financial Planner late in Life?

Post by HIinvestor »

Yes, recognize that one of the possibilities is that FPs can be sued and it can be stressful and cost money to defend yourself, especially when the market tanks, as does happen. Be sure that you are willing to deal with these potentila issues going forward.
User avatar
Topic Author
gasdoc
Posts: 2039
Joined: Mon Nov 03, 2014 7:26 am

Re: New career as Financial Planner late in Life?

Post by gasdoc »

epitomist wrote:
goodenyou wrote:I would bet that the doctor can take that stress.
Stress schmess. I'd be more concerned about turning people who used to be friends and coworkers into people suing you to recoup their losses. I was once sued frivolously by a desperate person. It took 18 months and $35,000 in my attorney's fees to get to court. We picked a jury, the plaintiff put on their case and rested within 2.5 hours. We went to lunch, my attorney made a motion, the judge dismissed their case.

Eighteen months of terrible stress, hundreds of hours spent on it and $35,000 flushed down the drain. And that is called winning a court case in this country.

Desperate people do desperate things. No sense putting a target on your back for them to home in on.
HIinvestor wrote:Yes, recognize that one of the possibilities is that FPs can be sued and it can be stressful and cost money to defend yourself, especially when the market tanks, as does happen. Be sure that you are willing to deal with these potentila issues going forward.
Are you kidding me? I am looking for a way out of worrying about frivolous lawsuits. Teaching college/high school kids is looking better all of the time!
HIinvestor
Posts: 1877
Joined: Tue Apr 08, 2014 3:23 am

Re: New career as Financial Planner late in Life?

Post by HIinvestor »

Teaching at HS or CC can be a very rewarding encore career. Your knowledge will be greatly appreciated and help the subject matter come to life--math, science, medicine! Perhaps School of Public Health?
AWH_CPA
Posts: 247
Joined: Tue Jan 20, 2015 5:44 pm

Re: New career as Financial Planner late in Life?

Post by AWH_CPA »

You could do actually financial planning instead of just managing assets. Create a plan for people that shows all their goals, (retirement spending, new cars, travel etc) and their resources (social security, pensions, investment accounts etc) and walk them through what various rate or return environments will due to their ability to meet their goals.

You could charge a fee for this plan and then simply recommend they implement a boglehead investment strategy. This way you are not investing their money for them. Instead you are simply recommending the Vanguard Total Stock Market fund and telling them the risks involved in investing. It isn't your fault if the stock market tanks 50% and they are in an index fund. They would be invested in something so it might as well be a great low cost option that gives them the best opportunity for success.

The above works and gives people a sense of relief as the near retirement. (You would still need some credentials to legally do this.)
Post Reply