What kind of training does a Financial Advisor have?

[FUEGO]

I briefly looked at becoming an FA when I was in college. I remember researching Edward Jones. Here's a link if you, too, want a job with them:

Start a New Career as a Financial Advisor - Edward Jones

From this link on the training process, it looks like about 8 weeks of instruction, which appears to be rather marketing heavy. You also have to pass the series 7 and 66 exams.

My parents are currently being targeted by a financial adviser from a different firm. She's an old family friend and really really really thinks my parents need $hit tons of annuities, whole life and LTC coverage to get them through their old age. I was a little shocked given they have a COLA'd pension and 2 SS's that more than cover their needs plus a couple million worth of gravy 401k and taxable accounts. Apparently this FA vulture didn't even inquire about their actual assets, pension, likely SS amounts, and forecasted retirement expenses. Shocking. The glossy color brochures she left were certainly pretty though.

Similar story with my mom's 403b. Some FA vulture tried to switch her over to craptacular high fee funds and away from her relatively awesome state 457 plan with expense ratios in the 0.10%'s range for a diversified basket of funds. He claimed she should be heavily into fixed income investments and not 80-90% equities in the 457, and therefore should roll over into the 403b (instead of reallocating within the 457). WTF man. WTF. He never asked about the fat pension mom's about to draw or the millions of outside investments or the fact that they will be getting fat SS checks.

[2B]

Quote:

Originally Posted by JoeWras In my industry, anyone can call themselves an "engineer". However, to get the "P.E." after their name is a true accomplishment. Not easy.

In the US state licensing of engineers "offering services to the public" keeps people from calling themselves an "engineer" unless they have a PE. The official levels are "graduate engineer" for someone from an accredited university and "engineer-in-training" for someone that has passed the first of two licensing exams. A PE is officially a "licensed professional engineer."

Private companies that don't do work for others or the Federal government can call people "engineers" but if anyone does anything to imply any sort of certification or willingness to work for others can find themselves in a lot of trouble fairly quickly. Railroad engineers are typically an exception but they just drive the train.

I'm a PE in real life.

[jjquantz]

Quote:

Originally Posted by FUEGO ...snip... Apparently this FA vulture didn't even inquire about their actual assets, pension, likely SS amounts, and forecasted retirement expenses. Shocking. The glossy color brochures she left were certainly pretty though. ...snip... He never asked about the fat pension mom's about to draw or the millions of outside investments or the fact that they will be getting fat SS checks.

Speaking of not asking about things, (or worse) one FA put my FIL in a single life annuity after he was diagnosed with stage 4 lung cancer with a life expectancy of maybe a year. Fortunately, DW had started to monitor the finances about then and managed to get the money back.

[Midpack]

I just double checked and while the FA in the OP studied business for two years, her BA after four years was in Art. Yikes

[HFWR]

As I understand it, the CFP exam is pretty comprehensive, and difficult.

But, as others have noted, entry-level "employees" at insurance companies or places like Ameriprise are mostly sales dummies, enlisted (a) to get access to their network of friends/acquaintances, and (b) for cold-call sales of high-profit margin scams products like whole life and variable annuities.

Not much investment management/advice involved...

[dd564]

I've been debating becoming a financial planner, but I don't want to sell insurance. I'm basically looking at starting my own fee-only practice instead.

I morally can't justify selling some of these products to people who just need good advice.

[Big_Hitter]

Quote:

Originally Posted by bad_LNIP Most people here would get crushed, and I mean like 90% of them on a good day.

I could probably brush up on my portfolio theory and fixed income analysis and pass the first one pretty easily. The second two---that would require some serious effort.

[JoeWras]

Quote:

Originally Posted by 2B In the US state licensing of engineers "offering services to the public" keeps people from calling themselves an "engineer" unless they have a PE. The official levels are "graduate engineer" for someone from an accredited university and "engineer-in-training" for someone that has passed the first of two licensing exams. A PE is officially a "licensed professional engineer." Private companies that don't do work for others or the Federal government can call people "engineers" but if anyone does anything to imply any sort of certification or willingness to work for others can find themselves in a lot of trouble fairly quickly. Railroad engineers are typically an exception but they just drive the train. I'm a PE in real life.

Yes, your details are correct. I left them out. But your clear detail oriented view shows your PE pedigree.

Interestingly, we had a citizen in the local area put together a detailed plan regarding a zoning and traffic matter which he presented to council government and also published on the web. As I recall, he wanted to block something in the works. I think he threw around some words in the presentation that got him a threat of a lawsuit from a local engineering (PE) firm. Although he never called himself an engineer or used a PE designation, the presentation to the public of such a highly polished document was evidence enough of him trying to practice without a licence, the argument went.

I think it worked. He seemed to drop it pretty quickly.

[robertf57]

Hmm,

I think of some of these designations differently than this thread lays out. I don't generally think of a Chartered Financial Analyst as a financial adviser. They tend to be involved in portfolio management (i.e. in funds) or as a research type in financial organizations. Three exams and reportedly pretty tough.

People taking the series 6/7 sell mutual funds, variable annuities and insurance (6) or general securities (7). They are sales people.

A Registered Investment Adviser Representative has taken the series 65 exam. An RIA rep has a fiduciary responsibility to the client. Now they sometime are also sales people and have a series 6/7 but they don't have to be. This exam, in my opinion, is not very difficult but does require some regulatory and financial knowledge. An RIA rep could also have the additional designation of CFP. The CFP involves more than just investments. The exam is fairly rigorous.

There are a bunch of other "designations" of dubious significance IMHO

[Walt34]

Quote:

Originally Posted by dd564 I've been debating becoming a financial planner, but I don't want to sell insurance. I'm basically looking at starting my own fee-only practice instead.

You could sell to people who don't have a clue, wouldn't do anything else anyway, and just want to have someone else do it for them. Put them in a couch potato portfolio rebalanced once a year, charge, say, .4%, and still sleep at night.

[Big_Hitter]

Quote:

Originally Posted by robertf57 The CFP involves more than just investments. The exam is fairly rigorous. There are a bunch of other "designations" of dubious significance IMHO

I agree the CFP is legit. The most difficult part about being one IMO is having to work "under" one for a period of time. I think it may be 2 years. That would suck.

[HFWR]

Quote:

Originally Posted by Big_Hitter I agree the CFP is legit. The most difficult part about being one IMO is having to work "under" one for a period of time. I think it may be 2 years. That would suck.

That would depend on what she looked like...

https://www.youtube.com/watch?v=6zXDo4dL7SU

[tmm99]

FA's (not CFP's, CFA's etc) are like exercise coaches? I think they are more like swindlers - unethical used car salesmen... (not that I have been taken by any of them, but I feel so bad for the people who get caught by them!)

[Sarah in SC]

I hold the CFP designation. It took me three years of coursework and an apprenticeship to obtain it.

There are three components to the CFP: the coursework (the planning process, investments, taxes, insurance, retirement planning, and estates), the apprenticeship, and a two day comprehensive exam that covers all of the coursework and is administered by the national board. It varies from year to year, but when I took it, the pass rate was around 50%. It was very, very difficult, at least for me.


My co-worker is working on the level three CFA exam. That stuff makes my CFP look like last week's lunch as far as analysis goes. There have been two CFA charter holders on our ER board, Brewer and Saluki, and I would imagine they could tell you that it is a very small universe of people who can pass those three exams. Mostly they work for mutual fund companies or other research intensive workplaces and rarely in financial planning for ordinary citizens.

CFP certificants can and do work at places like E Jones and the like, but by and large they work in actual advisory firms and not sales shops. E Jones is definitely in the sales shop category.


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