With the economy seemingly on the mend, newbie financial advisers are finding that it's a great time to be breaking into the game
Fledgling financial advisers find that it is a great time to be getting their wings.
Neil Teubel considered three offers from advisory firms last summer as he finished the master's program in financial planning at Texas Tech University.
One firm was so small that it had no human resources person, so he would have had to find his own health insurance. Another firm was too large; Mr. Teubel wouldn't have had an opportunity to interact with clients for years, he said.
Mr. Teubel landed at RegentAtlantic Capital LLC, which manages $2 billion in assets, where he earns about $50,000 a year, plus bonus, and evaluates client retirement and life insurance needs for wealth managers. He presents findings to clients and enjoys some unusual benefits.
“The real selling point for me was not being forced, immediately, to go out and get my own clients,” said Mr. Teubel, 24.
LOOKING UP
As the nation's job market shows early signs of getting back on track, the outlook for new advisers is also improving — albeit slowly. Last year, the average salary for financial advisers with less than four years' experience was $47,450, up slightly from $47,404 in 2009, according to the Financial Planning Association's latest salary survey.
Professionals who help graduates of finance and planning programs find jobs said that entry-level positions at advisory firms are paying from $35,000 to $55,000 a year.
In 2008, starting salaries fell slightly, according to Deena Katz, associate professor in Texas Tech's Division of Personal Financial Planning and chairman of wealth manager Evensky & Katz Wealth Management. In fact, some graduates who found jobs in 2008 had lost them by 2009 because of the struggles in the financial services industry, she said.
“Kids are doing well at finding placements right now,” Ms. Katz said. “The most successful are those who are comfortable working with people and have good analytical skills.”
The salary offered directly out of school depends on many factors, chief among them the responsibilities the position entails, she said. Most new hires join as an entry-level adviser or analyst able to hit the ground running, having had the opportunity to use multiple planning and portfolio management software systems in the classroom, Ms. Katz said.
Typically, new graduates want a salary, the opportunity to learn about planning and to be mentored, said Ruth Lytton, a financial planning professor at Virginia Polytechnic Institute and State University.
Finding jobs is going to be easiest for effective communicators; those with the ability to speak, write and be team players, she said.
“When an adviser interviews a candidate, they ask themselves, "How quickly can this person be client-facing?'” Ms. Lytton said.
The starting salary also depends on the job's location, as positions in larger metropolitan areas usually pay more than those in smaller cities and rural areas, she said.
Of course, starting salaries are just that.
“Earning investment series licenses and passing the certified financial planner exam all help to boost salaries,” said Deanna Sharpe, an associate professor in the University of Missouri's personal-financial-planning department.
“It's a profession where smart and diligent efforts are rewarded,” she said.
First Command Financial Services Inc., which expects to hire about 50 new graduates this year, is offering a $2,000 per month salary with a bonus program that together should translate into earnings of $50,000 to $70,000 a year as the individual meets certain goals, chief executive Scott Spiker said.
About 100 of the 200 new people First Command expects to hire this year will be career changers, he said. Many of these individuals are coming out of the real estate industry, the mortgage finance business or from banks and insurance companies, he said.
“People who want to run their own business are our target advisers,” Mr. Spiker said.
Typically, adults getting into planning as a second career can expect to start out with a higher salary than someone right out of school, especially if they come in with a Rolodex and good presentation skills, recruiters said.
Brokerage firms seek out career changers because they have the maturity, life experience and contacts that make them more likely to succeed, said Mark Elzweig, who heads an eponymous national executive search firm focused on the asset management community.
Wirehouses typically put career changers in a mentoring program and pay them a salary of $75,000 to $100,000 that declines over the first two years, Mr. Elzweig said, adding that a branch manager once told him that he looks for “someone who has faced a setback in life and was able to overcome it.”
Other favored recruits are accountants, lawyers and consultants because they have worked successfully with high-net-worth individuals, said Mindy Diamond, president of recruiting firm Diamond Consultants LLC.
Compensation typically starts near the employees' former salaries for the period of time it takes for them to get started, she said.
“Firms have told me they like to create a compensation program that's significant enough so the recruits can eat, but one that also leaves them hungry,” Ms. Diamond said.
Of course, compensation isn't all about the cash.
BENEFITS IMPORTANT
Even budding financial professionals want health and life insurance, retirement programs and support for further education, Ms. Katz said. Other benefits could include disability insurance, gym memberships and charitable-contribution allowances, she said.
For Mr. Teubel, “health benefits were a big thing,” but he also appreciated the firm's reimbursing him for expenses related to the CFP exam, which he took in July even before he was an employee.
His other favorite benefits? RegentAtlantic sponsors a softball team and pays for other intramural sports, including soccer and basketball. It also has a “fun committee” that hosts social events, including lunches, cookouts, happy hours and team competitions such as tug of war, Mr. Teubel said.
E-mail Liz Skinner at lskinner@investmentnews.com.
