Interview Part 2 - Myths and Truths about the Financial Advisor's Career

There are many myths surrounding the career as a financial advisor.

Management people repeat these myths over and over again during recruitment campaigns and company events as if they are true. 

As these myths get so much air time, they have generally been perceived to be true. 

Even advisors have been conditioned to believe its true.

During your interview, the manager will regurgitate to you these common myths as part of his/her sales pitch to you about being a financial advisor.

Myth No. 1 : This is a business. You become a business owner.

This is one of the most overused misconception. A financial advisor is not a business owner. People like to use the word business very loosely.

You are really a self-employed professional.

Even when you become a very highly paid self-employed professional, it doesn't transform you into a business owner.

The advisor's business doesn't run without the advisor.

The advisor has to meet clients and close cases personally. 

He/She has to do all important paperwork personally and a lot of these paperwork involves writing long essays of reasons for recommendations for each financial product that is sold. (More of the financial advisor's job scope is discussed here)

The advisor cannot be removed from the picture and still expect to generate new business.

No work from the advisor = No pay for the advisor.

The advisor has merely given himself a job.

Like the Char Kway Teow man, to run his business he needs to open his stall. If he is not at the stall frying kway teow and selling them, the business doesn't run. Even if he has sold enough kway teow to buy him a Sentosa Cove residence, the stall cannot run without him. He has set up the business to employ himself.

However the Char Kway Teow man still has his advantage over the financial advisor.

He can take a backseat by hiring workers to fry and sell kway teow. Without him in the picture, the kway teow show still goes on and fresh new business comes in daily. 

The same can't be said for the financial advisor, even if he changes course and becomes a manager.

Myth No. 2: You are your own boss.

Myth No. 1 and Myth No. 2 sound similar, but have different points to expand on.

You are your own boss BUT you have to attend regular meetings you didn't call for. 

On top of that you go for mandatory 30 to 36 hours of trainings every year. 

If you are unlucky, you get signed on to a firm that insists advisors step into office by 9am, just like an employee. 

Almost every week there is a team meeting. During the team meetings you answer to your manager about your production figures. Sometimes you even answer to your team mates about your production figures. 

It is extremely illogical that you pay your manager and the directors a part of their salaries yet they make you answer to them about your work. 

Doesn't sound like much 'own boss' benefits.

Myth No 3: Unlike over at the banks, there is no sales quota.

At least the banks are upfront about their quota. You will know about the FA firm / agency's expected performance when you become licensed as its advisor.

Some firms work on creating an environment of peer pressure. Under the environment, you will be compared to your peers and you mind will be framed to compare yourself to your peers. This type of quota has a never ending ceiling.

Myth No 4: You'll be better off than your peers who are working 9 to 5. They are trapped in the rat race.

'You'll be better off than your peers who are working 9 to 5'

It really depends on what one defines as 'better off'.

The better off points I can think of is that the advisor has the potential to make much more money than his/her peers who take a salary and doesn't have to worry about taking leave or taking a MC.

'They are trapped in the rat race'

The advisor is also a rat trapped in the perpetual sales treadmill.

 No matter how well he/she has done in the past, the Management's pursuit of sales accolades for the advisor like MDRT, COT & TOT puts him/her back on the treadmill year after year. Other than these 3 things and some other internal sales awards, the firm doesn't really publicly chart any other career progression for the advisor.

No matter how hard the advisor works, he/she doesn't get out of the rat race. Just becomes a richer rat thats all.

Whether the same advisor is 21, 40 or 50 years old, one thing never changes. 

The company asks the advisor to run the MDRT / COT / TOT treadmill every year. 

Very simply, year after year that is all to work towards to. 

For the typical advisor, career progression is summed up in these 3 sales accolades.

As long as the advisor is still breathing, it never changes, even at age 70.

Financial advisors always compare down to the 9 to 5 workers.

How about the investor and business owner?

Myth No 5: You get to enjoy freedom of time.

You ought to know by reading this far that this cannot be true.

Officially you get to have freedom of time.

Whether or not you'll let yourself enjoy is another matter.

For the advisor, More Work = More Pay.

You could be resting. But if you were working you would get more money. So you compel yourself to work. And if you rest, you would feel at least a little guilty about resting. So that really doesn't count for enjoyment.

Even if you are able to let yourself enjoy the freedom of time, if you haven't met your sales production goal, your manager will remind you. Everytime. Without fail. You will be conditioned to feel guilty.

Even if you have met your sales production goal, MDRT for example, your manager will sell you the idea of striving for the next production level, COT. You get the idea.

With so much sugar-coating removed, what are the real benefits of being a financial advisor? Why are we still here?

It is financially rewarding. The satisfaction of having won over your clients is indescribable. You forget what its like to get a MC. You get to meet all kinds of people and learn from them. Along the way you establish friendships. If your firm agency doesn't force you to step in office by 9am, you get to enjoy driving or public transport during off-peak hours.You get to go to the gym during off-peak hours. You get to have lunch and avoid the lunch crowd. You know how to use a financial calculator. Your social intelligence and emotional intelligence improves. You get to network. You learn how to ask good questions. You learn to present effectively.

If it sounds good enough, lets move on to the 3rd part of the interview.