The paycheck potential is a big lure for would-be financial advisors, but most don't last long enough to reap great rewards.
Turnover in the first few years is brutally high.
"You've got to hit the ground running or you're out pretty quickly," said Joe Matthews, who teaches investment planning as an adjunct instructor at New York University School of Continuing and Professional Studies. "There are goals that have to be met or the compensation doesn't pan out for the amount of effort that you're putting in."
Jeremy Joiner started paying his dues when he was still in college. He majored in personal financial planning at Texas Tech University and completed two brokerage-firm internships. After graduating in 2006, he started financial planning as a "paraplanner," analyzing data that advisors collected from clients -- 50- to 60-hours a week. "You do the grunt work," he said. "A lot of days are spent grinding it out." After about a year, he took off six months to study for the Certified Financial Planner exam and passed.
Joiner, 27, is now a wealth adviser in Houston at United Capital Financial Partners Inc., a Newport Beach, Calif.-based wealth-management firm. "Eventually you're going to have to come down to where you have a life," he said. "But it's not an 8-to-5 job." Joiner is now planning to pursue a Chartered Financial Consultant credential. He estimates that advisors with similar backgrounds earn $45,000 to $75,000 a year, the upper end of that range comprising those working directly with clients as he does.
Peter Izzo, a financial adviser in New York at Bank of America Merrill Lynch Global Wealth Management Group, began his career in Merrill's training program, which was then a two-year program. After completing the training, it took about a year before he felt comfortable that he'd "make it."
"It is a meritocracy; it is a cut-throat business," he said. "You have to grow your business in a quickly enough manner so that they don't fire you."
For those who survive the early years, establishing a book of business can take five to seven years, said Matthews, who is also a financial advisor.
"You go from survival to excelling," said Izzo.
Five years into his career, Izzo joined up with a team to offer clients a wider array of expertise, including retirement planning, alternative investments, fixed-income, banking and lending services. The team's book is more than $200 million with the goal of bringing in $50 million a year in the next two years.
"If we can double the size of our business every three years, I'd be pretty darned happy," Izzo said. "I think that's a stretch and an achievable goal."
Financial advisors typically exit the business by forming a partnership and putting a transition plan in place. Retired financial advisors may continue to receive a portion of the book's revenue stream for three to five years.
As for Izzo, at age 35, he is still a long way off from thinking about retiring. But he repeats the mantra he heard often as a young rookie at Merrill: "You want to work harder than anyone else for the first year of your working life, and you'll live more comfortable than most people for the rest of your life."
Write to Laura Lorber