According to the Bureau of Labor Statistics, there are 249,400 financial advisers in the U.S. The field has a projected growth rate of 30% from 2014-2024. That's significantly higher than the average job outlook and there are several reasons why. Taking on the role of a financial adviser provides opportunities not afforded to individuals in other career fields. In addition to offering invaluable advice to clients, financial advisers reap personal rewards throughout a successful career, including unlimited earning potential, flexibility in work schedule and control over one's practice. However, a career as a financial adviser carries with it a slew of drawbacks that range in severity and duration. Among the most prominent cons are the high-stress environment of the industry, the length of time it takes to build a client base and the continuous need to meet regulatory requirements.
Offering Meaningful Advice
While offering meaningful advice is not often the reason financial advisers begin a career in the industry, it is common that this aspect of the job is the most rewarding. Consumers are all too often overwhelmed and confused regarding which investments or insurance vehicles are appropriate for them. The greatest role a financial adviser plays is providing education to clients so suitable decisions can be made. A success in the financial life of a client often equates to success for the client's financial adviser.
Unlimited Income Potential
For most financial advisers, there is no limit on earning potential. The financial services industry employs the vast majority of advisers on a commission basis, meaning income is based on the amount of new business or recurring revenue created each year. While payout rates and bonus structures differ among financial services firms, advisers have the ability to earn as much, or as little, as they are able.
Work Schedule Flexibility
Finding a balance between work and personal life can be a challenge when starting a new career, and financial advisers are no different. However, once an adviser establishes a client base, the career lends itself to flexibility in work hours. Seasoned advisers have the advantage of scheduling client meetings around their personal calendars, and over time, have the opportunity to work less than a full 40-hour week.
Creativity in Practice Structure
Financial advisers have the opportunity to be creative in building their client bases. While some advisers focus on serving the baby boomer generation, others prospect exclusively to millennials. Advisers can also decide the type of clients they want to spend their time serving, such as doctors, lawyers or entrepreneurs. Firms also provide a wide range of products and services advisers can offer to clients, including fee-based financial planning, investment management, life or disability insurance or retirement plans, giving advisers full control over their practices. While the list of pros related to working as a financial adviser is lengthy, there are a number of cons to consider.
Financial advisers can experience a great deal of stress when starting this career. The financial services industry is cyclical and deeply intertwined with the performance of domestic and global markets. When economies perform poorly, clients reach out to their advisers first. Financial advisers are constantly managing the emotions of their clients based on downturns in the market, and this can lead to a high level of stress over time.
Starting a career as a financial adviser is not an easy task. Most financial services firms have sales quotas to be met each month, which means that, until a robust client base is established, advisers are constantly in need of new prospects. A high number of advisers who leave the financial services industry speak to the stress caused by the amount of time and money spent creating and maintaining profitable prospecting systems. For new advisers with a small personal network, building a book of business as a financial adviser is the most challenging aspect of the career.
Financial advisers must be licensed to provide advice or sell products to clients, and the process to obtain those licenses can be lengthy. Additionally, advisers are required to complete a certain number of continuing education courses each year to keep their licenses in good standing, and they must carry errors and omissions insurance coverage throughout their careers. Keeping up with these regulatory requirements helps protect clients from adviser malpractice but can be a costly and time-consuming endeavor for a financial adviser.