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.

Interview Part 1 - Job Getting or Job Giving?

The interview at the Financial Adviser (FA) firm or the Life Insurance (LI) firm will be one of the easiest interviews in your life.

When you go there, you won't need to worry at all about making a good impression and selling yourself to the interviewer.

I have seen people turning up for the interview in t-shirt and jeans. The next thing I know they end up as advisors in the firm.

In fact before you've even stepped into their office, you have already nailed the interview.

Why?

As long as you are 21 years old and above, have at least 4 credits in GCE 'O' levels, you're not an undischarged bankrupt, have not committed a criminal offence and MOST importantly, you can breathe, you are guaranteed a place.

Although some places have marketed themselves as highly exclusive, accepting polytechnic and university graduates only, one can guarantee they will not turn you away. 

It is getting harder and harder to recruit new people into financial advisory firms and insurance agencies. 

The only times when financial advisory firms and insurance agencies can see a spike in recruitment is during recession periods when firms from other industries are not hiring and retrenching.

When you arrive at the interview, although you will be asked the usual cheesy interview questions at first, you do not have to take the Q&A as life and death.

Those questions are asked to kill some time first. 

You don't have to sound smart. It wouldn't matter at all. 

In fact the questions are simply a build up for the interviewer to sell you the career.

Truth be told, the interviewer has more reasons to be more nervous than you are. 

He has to close cases too, and you are a case to be closed. 

If he lets you slip away, in the next manager's meeting he has to face the embarassment of explaining to his other fellow managers why you didn't join this career in the end or why you ended up with another firm. 

So when you are going for the interview with the financial advisory firm or insurance agency you can just sit back and relax.

Typically, the interviewer is also the manager who is recruiting you. He/she will be your manager if you join.

The truth is, you're not interviewing for a job.

You are being interviewed to become your recruiter's boss.

When you join, you're going to pay for a part of your manager's salary and a part of the directors' salaries.

This is how it works:

As a financial advisor you meet clients. Close cases. Bring in money.

Company takes a cut. Manager takes a cut. 

You take the leftover of what you brought in.

Without you in the equation, company doesn't get paid, manager doesn't get paid either.

So that explains why they are always so nice and patient and keep wanting you to go for the interview even if you can't make it on certain dates. 

However, the same nice and patient attitude isn't always replicated after you have joined the firm and settled in.

However remember that without an additional you, there is NO increment to their salaries.

As a financial advisor or insurance agent, you are powerful. You pay other people's salaries first before you get paid your own salary. In some financial advisory firms, you are even paying for the office building rental. 

If you are at a firm that practices a top down approach to advisors, remember, the power is really bottom up.

Now on to the next part of the interview.