September 2001
Becoming a Financial Consultant
By Robert A. Pietroburgo
Every company—and most individuals—needs someone to balance their books, develop a budget, and determine taxes. CPAs interested in other career options have the luxury of exploring a number of related alternatives. But one career option sometimes overlooked is that of financial consultant.Most accounting and finance jobs focus on a specific part of an individual’s or business’s finances. Financial consultants, however, have the opportunity to look at the entire financial picture and take it from dream to reality. What does a financial consultant do? In a nutshell, a financial consultant listens to an individual’s investment goals, looks at available assets, and allocates those assets into a comprehensive investment strategy to realize those goals. In order to effectively manage assets, a financial consultant must be able to understand all of the financial tools available and how these tools will impact the overall financial plan. More importantly, a financial consultant must be able to listen to an individual, understand risk tolerance, and provide the advice and resources that lead to a solid long-term relationship.
Fitting the Profile
It takes the right personality to become a successful financial consultant. “You need to have a strong desire and strong capability to work in a consultative capacity,” said Mike Pela, vice president–investments and senior financial consultant at A.G. Edwards. “You have to want to work with people, not just with products, and you have to know your clients as people and not just numbers.”
Aside from the desire to form long-term relationships, a good financial consultant candidate would be a CPA who wants more control of his working environment, who wants a significant challenge, and who is interested in the broader financial picture. CPAs that want control of their income, have an entrepreneurial flair, and can control the flexibility and freedom of being a financial consultant have the potential to be successful.
Financial consultants have the opportunity to work with a variety of investment vehicles to help achieve planning goals. One individual may need help with estate planning, which might include establishing a revocable living trust and will as well as updating beneficiary information. Another may want to start planning for a child’s college education, so the financial consultant might talk about planning tools such as an educational IRA or a section 529 college savings plan. Other individuals will need tools such as life insurance, a mortgage, or simple investment advice on stocks and bonds to give them an opportunity to enjoy their years of hard work.
It can be difficult to uproot oneself from an otherwise comfortable job. “Giving up the security of a steady paycheck was difficult,” said Gene Diederich, vice president–investments at A.G. Edwards. “But my CPA background was a perfect fit because of my experience consulting with clients and my general orientation to business.”
Advantages to Making the Transition
Choosing to become a financial consultant after having worked as an accountant or in an accounting-related field can be a big change, but there are significant benefits that a CPA can realize in a career as a financial consultant. CPAs bring with them their ability to read and understand financial statements as well as their ability to anticipate the tax implications of investment decisions. For example, a tax advisor also has credibility when speaking about personal financial matters. An advisor is already trusted and there is usually a seamless transition from being someone’s CPA to being their financial consultant.
An existing client base can help a CPA get off to a better start as a financial consultant.
CPAs that become financial consultants must complete a thorough training process to prepare for the change in career focus. A financial consultant-in-training typically starts her career by spending nine weeks studying for the Series 7 exam. She then spends at least seven additional weeks learning about products, sales, and prospecting techniques. And there is still the anxiety that some might feel about starting a new career.
“It was a natural fit with having been a CPA,” said Bob Lauer, vice president–investments at A.G. Edwards. “The sales training was helpful, as I already understood most of the technical aspects of the job.”
When to Make the Move
It is not always easy to know when to make a career change. It is easy, however, to tell when a job has become stressful and unfulfilling. Many CPAs decide to become financial consultants after working as an accountant for just a few years, while others make the change decades later. Some CPAs suggest acquiring at least five or six years of experience before becoming a financial consultant because of the business experience and contacts that can be gained in that time.
The most rewarding part about a career as a financial consultant is the chance to help people achieve their dreams. “As a tax accountant I would tell people that I saved them $1,000 on their tax bill, but I was just giving them better bad news,” said Pela. “Now I get to tell people, ‘You know that $5,000 we invested a year ago, now it’s worth $6,000.’ It’s still the same $1,000 in their pocket, but now I get to tell them the good news. That’s the best feeling.”
Editor:
Anthony H. Sarmiento
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