Ed Caldwell remembers the exact minute his life changed. It was 3:58 p.m. on Thursday, January 28, 2010. He was on the phone with a guest scheduled to appear on Bloomberg TV, where he was an executive producer. His other line lit up with an incoming call from his company's human resources department.
This was the call. At the age of 52, Caldwell was about to be laid off from the television news business, just as 100 of his colleagues had been a year earlier.
Given the previous staff reductions, the call wasn't a surprise, he says. It was nonetheless a shock. Married with one son in college, and another on his way there, Caldwell had a severance package and 30 years of experience in an industry he suspected he'd never work in again. "Whoa," he thought to himself. "Here I am in what's supposed to be my peak earning years and I'm starting over."
The idea to become a financial adviser didn't occur to him overnight. While researching what to do with his 401(k) plan, his own adviser suggested he'd be good at it. Soon after, a friend and managing partner at the firm, Langdon Ford Financial, called to see if he'd consider undertaking the training and licensing exams necessary to join the firm as an adviser.
“In my peak earnings years, I'm starting over
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Financial advising is a growing field, with total employment expected to reach 271,200 by 2018, a 30% jump from 2008, according to projections from the Bureau of Labor Statistics. At a median annual salary of $69,000, the pay is good across the board. Advisers at brokerage firms like Morgan Stanley Smith Barney and Bank of America Merrill Lynch, often referred to as wealth managers, handle clients with holdings in the tens of millions. Those brokers can command commissions as high as 44% of every dollar in fees that they bring in, said Howard S. Diamond, chief operating officer of Diamond Associates, a recruiting firm that specializes in the industry.
Entry-level financial advisers usually have a bachelor's degree in a financial discipline like accounting or economics, and take a two-year training program where they are given a small salary while learning the profession. Mid-career professionals who want to break in can do so based on the strength of their personal network and financial knowledge, like Caldwell did.
At first, Caldwell was hesitant about becoming a financial adviser. He had relied on a regular paycheck for his entire career. But many financial advisers work for little to no base salary, with the vast bulk of their compensation coming in the form of commissions from fees they bring to the firm from clients. The measure of Caldwell's success, and paycheck, would be determined by how many new customers he could attract and keep happy. "You're largely setting up your own business, and it's reliant on your setting up your own clientele," Caldwell says. Or, as the recruiter Diamond puts it, financial advisers "eat what they kill."
Unique Preparation
On the other hand, Caldwell's 20 years' producing financial news programming at CNBC and later at Bloomberg L.P., was unique preparation for distilling complex monetary information for busy people who want to buffer their nest egg or save for a vacation home. Caldwell always saw his job as demystifying the arcane language of the investment world anyway, he says. Plus, he had a big Rolodex from which to pluck potential clients.
Despite his long career working with economists and business people in television, Caldwell wasn't going to be awarded an honorary degree in financial advising. He had to take the Series 7 and Series 66 exams to become a registered securities broker and financial adviser. The exams, administered by the Financial Industry Regulatory Authority (Finra), consist of hundreds of multiple choice questions and take about three hours to complete. For months he studied using an online tutorial, poring over financial regulations and taking practice tests. He passed the Series 7, but suffered a setback the first time he took the Series 66.
"You had to get a 75% to pass," Caldwell recalls. "The first time I took it, I got a 73% and that was the first time I saw how much I wanted to go into this field because of how much it bothered me."
In August of last year he began his new career as a licensed financial adviser at Langdon Ford's Parsippany, N.J. office. The job, which often requires house calls, brings satisfaction in a way that TV news never did, he says. He always hoped that viewers of Bloomberg and CNBC would make money from the information his programs provided, but he never saw the results. In his new job, he helps clients plan for retirement, find ways to invest their excess income, and save money to put their children through college.
That House on the Shore
"When you're sitting across the kitchen table with a husband and wife and you can show them, 'Look, you've always wanted that house on the shore, here's how you can do it.' You feel like you've really done something," he says.
It's not unusual for experienced professionals like Caldwell to make a transition into financial advising, says Diamond, the recruiter. Lawyers, doctors, and business professionals have all made the career leap, he says. But it's very competitive. Firms like to see some form of financial experience, and a big network of friends, colleagues and associates to acquire clients from.
Indeed, in 2012, experienced advisers with large, profitable client bases are expected to be the target of a poaching campaign not seen since before the financial crisis, according to a survey by the Alite Group. An adviser who brought in $10 million in the last year can get as much a $13 million bonus to switch to a new company and agree to stay for a nine- or 10-year period, Diamond says.
For small- to middle-income advisers like Caldwell, the hope is that there will always be people who don't have the time or desire to master the intricacies of personal finance; that like Caldwell, there will always be people who are struck by some life-changing event and who need guidance about how to keep themselves solvent and secure as they head toward older age.
Caldwell's job, he says, is to help his clients forge ahead amid uncertainty and doubt, just as he did when he was laid off. "When somebody gives you that call and hands you a white envelope and sends you on your way, you have a choice," he says. "You can hang your head and point fingers and sour on everything, or you can say wait a minute, what's the gift in this?"
Write to Joseph Walker at Joseph.Walker@dowjones.com