Why I Quit Being A Financial Advisor
Back in 2011, I graduated college with a degree in economics and business. I wasn’t sure what I wanted to do coming out of school, but my dad offered to retire his financial advising business to me if I wanted it. At the time, I was ecstatic. I’ve always had a passion for finance and investing, and this would be a great opportunity to showcase those skills while helping people grow their net worth at the same time. I thought I could make big money from this and benefit others at the same time. But that feeling didn’t last.
As the transition was happening to introduce me to all his clients, I felt very out of my league. I just came out of college with a net worth of $0 (maybe less at the times, thanks to student loans) and trying to help 60 to 70-year-old retirees manage their retirement portfolio. I felt a huge burden to make sure these people’s funds were invested in what I truly believed was the best investment for them. But all I could sell them were mutual funds, high expense ratio mutual funds. This is what my dad had sold to these people for 30+ years, and I was expected to carry that on. The reason these were so attractive to sell is because part of the expense would come back directly into my pocket, rather that was the upfront cost or the quarterly fees. I didn’t feel right selling these investments when you could purchase a low-cost index fund for much cheaper and receive the same returns, if not better.
On top of that, clients were needy. I was expected to meet with clients on a regular basis to discuss how their investments were doing and I didn’t have time to do that. This is about the time my fiancée and I were getting married, buying a new house, and starting a new life together. I just didn’t see the value in continuing when I felt dishonest selling these products that I knew weren’t the best for my clients.
I’m not saying financial advising as whole doesn’t have value. I think it does. There are people out there who simply wouldn’t purchase an investment if someone wasn’t in their face selling it to them. For those situations where someone might spend their money on extra stuff instead of investing, then that route makes sense.
There are also fee-based advisors out there which is a completely different topic. Fee-based absolutely create value and in 9 cases out of 10, would be a better option.
I still deeply have a passion to help people with finances, and want to find other avenues to help them. This blog will hopefully be one of the ways I can accomplish this.
So, readers, what are your thoughts? Did I make the right decision or should I have stuck it out and trucked forward?
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