The Key to Making it in Wealth Management: Who’s Your Daddy?

eFC logo

Analytical skills, business savvy and a great work ethic: these are not the things that will get a job in wealth management as a twenty-something. Rather, you need to know a host of rich people – family and friends, mostly – who are willing to do you a personal favor. Succeeding as an entry-level financial advisor takes an impressive personal network along with an understanding that, for the first two to five years on the job, you’re nothing but a salesperson.

Yin and Yang

Two people in their mid-twenties, each who asked to remain nameless, took a job as a financial adviser a few years back, right around the time of the financial crisis. One at Wachovia Securities, now Wells Fargo Advisors, and the other at Merrill Lynch. They were both college-educated, but the latter had the network: family and friends of family who had money. The former didn’t have a relationship with any high-net-worth families.

One made warm calls, the other cold. One is still in the business while the other is in a whole new line of work. You can guess which one is which.

“In the interview, nearly all the questions are about who your parents are, who their friends are,” said the former Merrill Lynch adviser, who has since moved on to another firm. “Money is a funny thing. Understandably people want to know the person they hired is trustworthy.” In five years on the job, he’s never made a cold call.

“The advice used to be that family and friends are the last people you want to do business when you’re new and prone to make mistakes,” said Paul Werlin, president of Human Capital Resources, a Florida-based financial services recruiting firm. “Now, it’s part of the overall strategy.”

The Wachovia broker’s work-life was quite a bit different. He paid for a list of names and numbers from a service and began pounding out cold calls, offering people on the other end of the line a free financial review in an effort to get in front of them. “Most of the time I’d get my name out and then hear a click,” he said. His greatest opponent was a Griffin system, preventing him from contacting those on the do-not-call list.

“Everyone who has succeeded in the business will tell you that they made it by cold-calling,” he said. “It’s a crock.” His former boss told him the same thing: he made cold call 10 hours a day until he made it. “I later found out his top 10 clients were family,” he said.

The attrition rate for entry-level financial advisers is lofty; experts speculate that only 10% to 20% stick. The former Merrill Lynch adviser came in with a class of 30 recruits. Before he left three years later, he was the only one remaining.

“From my view, I represent the last generation of kids who are hired blind,” said the former Wachovia adviser. “With no network of rich friends, no business-to-business background.”

In fact, Werlin said that some banks are now targeting older entry-level professionals, people who worked in completely different industries but who are looking to make a move into finance. “There are a large number of people in their 30s or 40s making career changes. They have better, more trusting networks.”

How to Make It In Wealth Management

Even with a strong network, growing into a successful financial adviser is no walk in the park, hence the propensity for wirehouses to poach experienced talent from rival firms by offering huge signing bonuses.

“Even family members can be tough,” said the former Merrill adviser. “You naturally think they’ll hand it to you. Really, you need to get a little bit lucky.”

His best piece of advice to newbies: know that it’s a 100% sales job. “If you want to find out who’s not going to make it, walk the bullpen and look for the guys sitting at their desk analyzing charts or looking for the next great stock pick” he said. “It’s a complete waste of time. You should spend every minute growing your book.”

Having a lot of hobbies is helpful to networking and growing your business. Golf, horseback riding, mountain biking and squash are great ways to meet people, he said. Getting on boards of clubs and non-profits is another great networking tool. One woman he works with found clients through a book club.

“Ask everyone what they do for a living, then they’ll ask you back,” he said.

If you found work at a large bank, network within the company, Werlin said. Retail operations can offer great leads. “Tellers see dividend checks and have access to lists of expiring CDs,” he said. “It’s a great way to talk to bank customers about investment options.”

But perhaps the best way to make it as an entry-level financial adviser: joining a team. Goldman Sachs brings new private wealth management hires under the wing of experienced advisers, for example. But those jobs are much harder to get.

Popular job sectors


Search jobs

Search articles