How can I get new clients as an introverted financial advisor?

October 29, 2011 2:07 PM

I'm finishing my economics degree this year and I've decided that I would like to become a fee-for-service financial advisor. The one major issue is that I'm strongly introverted and I'm not confident about my ability to find new clients. I'm looking for book recommendations and sage advice from those with similar types of careers.

I've had an interest in financial advising since my teenage years when my mother was given awful advice from a commission based advisor (a widow with two children was advised to leverage her house to buy mutual funds, just prior to the dot-com bubble in 2001) and lost a great deal of money. I've read many consumer financial planning books since then and I've taken a couple of financial systems courses in university. After my B.A. I will take a series of courses on Financial Planning and get certified.

I'm excited by the prospect of helping people invest their money and get their financial lives in order, but I worry that I won't be able to find enough clients to earn a living. A majority of the industry still seems to be commission based, so I there aren't many options for joining a big firm while I start out. There are a few small companies (1-2 advisors) and one larger company (10-15 advisors) in my city which operate on a fee-for-service basis.

I think I'm fairly good at one on one conversations and conversations where there is a clear topic or reason to be talking, but small talk and being social for the sake of being social is difficult for me. Because of this my personal network is rather small, and I'm not sure how I should go about increasing it. Book on how to find new clients and get referrals would be helpful. Something along the lines of 'Sales for Introverts' perhaps.

Bonus: Personal experience of how you got in touch with your financial advisor and other miscellaneous advice for this type of career.

Thanks!

posted by Homo economicus to work & money (11 answers total)

Don't take this the wrong way, but "economics degree" does not suggest to me someone qualified to deal financial advice to people.

Pursue the CFA designation. Network with people and meet older, more experienced people who work in fee-only financial planning. Get a job with their firm. Establish a track record. Then found your own fee-only financial planning business.

That you're introverted is pretty irrelevant to the larger question of how to become a fee-only financial planner.
posted by dfriedman at 2:33 PM on October 29, 2011 [1 favorite]

Yes, my degree won't be enough, but I said that I will be taking the necessary courses and exams afterwards for the Certified Financial Planner designation.

I know how to become a fee-only financial planner, but getting enough paying clients is what I want to learn how to do. How am I going to market myself? Should I work for free for some people in order to generate paying referrals? These are the types of answers I'm looking for.
posted by Homo economicus at 2:48 PM on October 29, 2011

Based on my dad's experience switching careers and becoming a CFP, it seems like the keys to success include having at least three years of expenses saved up (it will probably take you that long to turn a profit), connections (especially wealthy ones), and networking with other CFP's and accountants to learn as much as you can and get leads. I get the impression CFP's tend to specialize in particular types of transactions and partner with other CFP's one transactions they're less familiar with.
posted by postel's law at 2:58 PM on October 29, 2011

... on transactions ...
posted by postel's law at 3:01 PM on October 29, 2011

Based on my experience as being a solo law practitioner, if you don't like marketing yourself and being social, and you don't have a pretty big network starting out, you are going to HATE working for yourself, since marketing yourself is probably 75% of what you do the first few years. You don't get to do a hell of a lot of the actual work; you spend tons of time marketing.

As an alternative idea for you, the credit union I belong to offers appointments with a financial adviser free to all members; the financial adviser is paid a salary by the credit union and recommends primarily investment products the CU doesn't offer, that you can then go invest in yourself through a Fidelity account or whatever. She receives no commissions. It's like a fee-based adviser, but salaried through the CU. That also means she gets to work with a much wider range of people, not just people sophisticated enough to know they need a financial adviser. She also works with people climbing out of poverty, young people just starting out, teenagers with babysitting money -- anyone who's a member of the CU and wants her services.

Potentially you could pitch this sort of job to local CUs or to community banks.
posted by Eyebrows McGee at 3:27 PM on October 29, 2011 [3 favorites]

If you think too much about the temperature of the water, you'll never dive in. I know heaps of independent professionals who are introverted and have had very successful careers.

1) Keep in mind that the antidote to being introverted is being fucking good at what you do. People can mask mediocre skill with gregariousness. Similarly, people without strong interpersonal skills can complement that by being absolutely great at what they do.

Introverts are often more thorough and diligent in their work than distractible extroverts. As a financial advisor, your clients will hire you based on 1) your results, and 2) how you are to work with. Focus on the former and force yourself to get good enough at the latter to enable the former.

2) You can always hire a salesman or set up a referral structure with other businesses (accountants and lawyers) to produce leads.

3) If you really love what you do and become obsessed by it, that energy will come across very strongly and far outweigh what you perceive as awkwardness. This ties in closely with the next point...

4) Pick a speciality for your business and devote 20% of time to mastering that. It could be your city or state tax code, it could be how high-net worth families handle offshore investments. Make it specific -- very specific -- and something you enjoy. Become the go-to guy in this little niche of the world. Present at conferences. If you present, invites are often free.

I have seen several people build careers of really cultivating their knowledge of very specific problems. One of them is a financial advisor that today is a multi-millionaire. His topic? Guiding Chinese investors interested in residential real-estate in Southern Oregon. Specific? Yes. Profitable? Yes. Obvious? No.

5) Join Toastmasters. It may not make you the premiere after-dinner speaker but it will take the fear out of presenting your results.
posted by nickrussell at 3:43 PM on October 29, 2011 [4 favorites]

My father is the world's most introverted introvert. For about 10 years he was a successful self-employed consultant-type person. He did it by working in that industry in more standard ways first, so he already had the networks when he went solo. Also, instead of going after clients directly, which he found really difficult, he befriended and extended his networks with other people and businesses who provided the same services, but who were super successful and really busy, so that they passed on the clients they didn't have time for. This meant he got the dregs at first - the difficult clients, the ones who ended up not paying, the ones who only wanted tiny amounts of work done. But they often referred other people to him later.

He also got lots of ballpoint pens made with his name, job description, and phone number on them, and left them lying around where ever he went (the bank, the doctor's surgery, the local schools, the bus). He seemed to get quite a bit of business through this!
posted by lollusc at 5:58 PM on October 29, 2011

You need to get in as an assistant in a high quality wirehouse wealth management branch in a very wealthy area. You won't make a lot of money to start but you'll learn how it really works, and won't be pressured to land your uncle as a client in the first month.

Don't be so focused on the revenue model.

A lot of the biggest and best private wealth management practices are commission-based or are on a hybrid of commissions and fees. They are managing money for incredibly demanding self-made millionaires, or for generations of wealthy families who have tough lawyers and accountants watching their back. You don't get to run a billion in portfolios at Merrill Lynch in Palm Beach by doing anything other than delivering performance consistently.

You can also find plenty of lazy and exploitative fee based advisers, who will happily clip 1.25% a year, leaving every one of their clients' money in the same dozen mutual funds, basically doing nothing that someone who spent an hour on month at Vanguard.com and Fidelity.com couldn't do for themselves.
posted by MattD at 7:37 PM on October 29, 2011 [1 favorite]

My partner and I recently went through the financial planning process with two different advisors. One fee-only and the other fee + commissions. We found both via recommendations from work colleagues. I don't think we would have gone to someone who hadn't been recommended by someone we know who had direct experience using that advisor.

I am going to assume that if you are just finishing your BA, that would mean that you are quite young. I hate to say this, but this is one place where ageism could really affect your ability to attract clients. I'm not sure if there's a common pattern to who seeks FP advice and when, but I'm in my 40's and I never would have considered using a planner before this stage in my life. (As a younger person, my finances were simple enough, and meagre enough, that the DIY approach always seemed perfectly adequate.) And I would be uncomfortable working with an advisor who appeared to be significantly younger than me. For me to get comfortable with the whole experience and trusting of the advice provided, I definitely needed to feel like my planner had the requisite wisdom and experience. I would simply never have that confidence in a 25 year-old, no matter how intelligent they might be. That might be kind of unfair, but going through the financial planning process is an incredibly invasive and personal thing.

It seems to me that someone who was interested in this career would do well to spend some time working for financial services companies, learning from the inside about how different products and services work and generally how the industry works. Then I would think that you could slowly begin developing an independent planning business on the side. Even here, you might be better off joining an established practice and learning about the systems and processes they have set up, before trying to strike out on your own. Both of the planners I worked with had access to a range of tools and resources provided through their firm. It would take an independent planner a lot of time and effort to develop that kind of thing solo.
posted by amusebuche at 7:55 PM on October 30, 2011

I work as a salaried financial planner for a credit union.
Doing what you talk about fresh out of school is very, very difficult.

I will elaborate more on this tomorrow when I'm not replying from my phone, but the short version is that I would recommend finding yourself a position as an assistant with a local firm while you learn the business for a couple of years.

I'm under 30 and ageism is a very real issue in attracting the trust of investors.

In addition, its a very competitive market. In addition to other financial planners, you will be competing against brokerages, banks, online self directed services, and more. Selling yourself is essential and i've seen many, many people fail (which only makes your job harder, everyone has had a bad experience with regards to financial advice and you have to win over every client).

I am very fortunate as a fairly introverted type myself to be working as a planner for a credit union. However, even to promote myself here I literally knock on doors in the neighborhood, give talks on retirement, all sorts of stuff to connect with potential members.
posted by smitt at 9:41 PM on October 30, 2011 [1 favorite]

I think I'm fairly good at one on one conversations and conversations where there is a clear topic or reason to be talking, but small talk and being social for the sake of being social is difficult for me. Because of this my personal network is rather small, and I'm not sure how I should go about increasing it. Book on how to find new clients and get referrals would be helpful. Something along the lines of 'Sales for Introverts' perhaps.

This will easily be the hardest part for you, because sales don't make themselves and customers don't walk in the door nearly often enough on their own.

The number one thing, no matter what route you take in the financial planning/advising world, is this: You will have to get comfortable very quickly with the fact that you're going to spend a majority of your time on the phone trying to get clients. Not just new clients, but trying to get your existing clients in the door to sit and talk to you.

After that, you get creative. I've met with various firms over the last few years as I tried to find my place in all this. Most of them are almost entirely hands-off when it comes to finding new clients. They'll give you pointers, but they're not doing it for you. As far as they're concerned, you should be happy they're advertising in the media (whether print or commercials). Nonetheless, they're not going to hand you any customers until you're established.

A lot of firms (the Edward Jones' of the world) are sink-or-swim. They will hire you on the spot. Some may give you a meagre salary for a year. They hope you will bring in as many of your friends and family as possible at the beginning. The failure rate is so high they are hoping you'll quit, and leave whatever meagre book of business you were able to put together and then do their best to retain it by handing it to an established advisor. Many of these places will give you a phone book and tell you to start working. I've met people who hire lead-generation companies to give them somewhat qualified leads to work from.Yes, there will come a point, and it takes a very long time, when you will not have to do all this to get clients. When you can bank on your trailers and referral business. They will tell you wonderful stories about their successful advisors. At one firm I went to, they had a floor with 200 "advisors" trying to get business. I RAN away from that place. It will take a lot of work to get to these "success stories". (Protip: Avoid any place that shows you a video to convince you to join the company.) All said, I would not recommend this route.


That's just one way. You have an economics degree, and you'll be working towards a CFP. You want to try to get in with a brokerage or similar firm as an associate to an established planner. You will learn a lot of the business this way. But your job, as an associate to a planner, is to call clients and do paperwork. You will spend all your time on the phone.

If you're lucky, you'll be allowed to grow a book of business of your own as you do this. Many good firms will let you do this.

You can also start with a bank, and work up towards it. This is the route I took, and the bank paid for most of my courses and certifications as I went. But its not an easy job, and it doesn't pay well.


All that out of the way... I'm not trying to dissuade you. It's a great career, and you can really help people.

There are a lot of paths to get to where you want to go in this business. None of them are "easy". And you're going to have to get over a a lot of your introversion - you will HAVE to sell, you will HAVE to ask for business, and ask for referrals. You will need to become skilled at interviewing, probing, and finding out more about your clients. Having a "clear reason" to meet with someone is nothing but a starting point when you meet with someone.

I hope this helps. Feel free to private message me with any other questions..
posted by smitt at 6:35 AM on October 31, 2011 [1 favorite]