According to most industry benchmarking studies, average income of an experienced financial advisor is roughly 2x to 3x the average household income in the U.S., which makes being a financial planner an incredibly appealing career, both to college graduates looking for a career, and those who may feel they have “topped out” in their current industry and wish to make a career change into financial planning. The caveat, however, is that financial advisors also have an incredibly high attrition and failure rate in the early years, which means the decision to try is not without significant risks. For many, their greatest fear in getting started is simply that they don’t have the “right” personality type to succeed in the first place.
In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we look at what kind of personality type it does take to succeed as a financial advisor, and how despite the conventional view that being a financial advisor is a quintessential career for extroverts (where you meet lots of people to work with and do business with), in reality many introverts are also very successful at being a financial advisor. Because while being an introvert might be a little more challenging when “prospecting” for potential clients, the fact that introverts more commonly form deeper relationships to fewer people is actually a great fit for establishing a great and loyal client base!
In fact, for many who start out as a financial advisor, the biggest roadblock is not about being an introvert versus extrovert, but simply about having the “grit” necessary to handle the emotional rollercoaster that is being an entrepreneur and building your own business. That includes both the sheer financial ups and downs of starting a business from scratch with no income, and the amount of rejection that occurs when prospecting for clients, where “just” being rejected 2-out-of-3 times is actually a fairly solid 33% close rate!
Fortunately, there is an alternative career path for financial advisors beginning to emerge as well – the employee advisor path, which starts out as an entry level “paraplanner” and climbs from there to an associate advisor, lead/senior advisors, and perhaps even to becoming a partner someday. Unfortunately, though, the relatively slow progression down that career path – which may take as long as 7-10 years to reach a senior advisor position – is for many career changers “too long” to wait to reach the income levels of their former careers.
Nonetheless, the bottom line is that the “right” personality type for being a financial advisor is not about being an introvert or extrovert – because either can create meaningful relationships with clients (and both will struggle if they are too extreme in either the introversion or extroversion direction) – but about having the patience and focus to build your career as an employee, or the sheer grit (and financial capabilities) to handle the entrepreneurial rollercoaster of starting your own advisory firm from scratch!