There are a lot of stressful jobs out there. But most of them at least offer a sense of accomplishment.
Financial advisors might help their clients reach their goals, but they never get to feel that reward because all they do is sit and wait for their phone to ring.
If you are unhappy with your job, then it’s time to consider making a change. But if you have invested years of your life into becoming a financial advisor and have never considered leaving the field, then this article might just change your mind about being a financial advisor.
In this article, we will discuss five reasons why I quit being a financial advisor and why you should too.
What Is A Financial Advisor?
A financial advisor is also known as a wealth manager. He is a professional who manages your finances by creating a personalized plan for managing your investments and reducing taxes.
The core responsibility of financial advisors is to help people achieve their financial goals. Whether by achieving financial independence in 10 years or planning for retirement.
Financial advisors are typically paid through commissions on products they sell such as life insurance policies and mutual funds.
Reasons Why I Quit Being A Financial Advisor
Following are five major reasons why I quit being a financial advisor. Before, you should be aware that this decision may not be an easy one to make. So read these reasons first.
1. Poor Salaries
Financial advisors are generally paid by commission. And while they can earn decent annual salaries, the reality is that most of them are only making around $50,000 or $60,000 a year.
Most of their income comes from commissions. And in some cases, those commissions come at their client’s expense. That is because fees for financial services typically run anywhere from 1-3%, and many advisors take these fees right out of client accounts rather than charging them directly.
In other words, if an advisor charges 2% per transaction, then he might make $100 every time he sells a mutual fund to his client.
If he sells 10 funds to his client over the course of a year, then he just made an extra $1,000 off that one client. Money that could have gone into investments for his clients instead.
2. Stressful Jobs
According to research, it can take about a month for a person to begin to feel comfortable in their new position. That is because people entering a stressful situation often experience what psychologists call dysphoria.
Dysphoria is characterized by cognitive and emotional stress that interferes with your work and day-to-day life.
If you are feeling particularly overwhelmed at work or if you just want to reduce your overall stress level, make an effort to look for ways to manage or reduce your levels of discomfort. This could mean getting more sleep or making time for exercise during lunch breaks or after hours. It could also mean talking through problems with co-workers, friends, or family members who are able to provide support and perspective.
Moreover, If you stay under stress for a long time then it also affects your health badly. Following are some Stress-Related Health Problems you can get:
- Heart disease
- Depression and anxiety
- Gastrointestinal problems
- Alzheimer’s disease
3. Limited By Company Rules
Most advisors are stuck working with products that are offered by their employers. This limits choice, which stifles creativity and flexibility.
If it is not in their company’s plans or product line, it doesn’t exist. Even if there is a better option out there that would work for clients better.
You can offer additional and higher-quality options to your clients when you aren’t bound to one set of products.
Additionally, you have access to tools and strategies that will help you make even more money for your business. The only thing stopping many advisors from offering these services is their current employment situation.
4. Unethical Practices Allowed
A few people make quite a bit of money at first. But later they realize that their actions were unethical. We found out that there were many other advisors doing things exactly like this. And that they had even started several different firms to avoid detection.
It is not a few, in fact, there were thousands of other advisors who were using unethical practices in order to make more money.
5. Too Much Competition With Little Reward
Competition is tough in almost any industry, and being a financial advisor is no exception.
The industry is so full of well-qualified professionals that there is little incentive for firms to pay their advisors more. In fact, compensation for entry-level advisors dropped 8 percent between 2020 and 2022 alone. And it doesn’t look like things will get much better.
A recent report from financial services research firm Cerulli Associates predicts an 18 percent decline in revenue among independent brokers/dealers by 2020.
As a result, many advisors are looking elsewhere for employment and it is not hard to see why they might want to leave.
We don’t say that becoming a financial advisor is bad, or that it is hard work. We know plenty of very hard-working and dedicated people in finance who have made great lives for themselves.
Take some time to consider whether or not the finance advisor job is right for you before you dive in with both feet.