Anyone Here Do Financial Advising Too?

[LifeHealth]

Hey guys I appreciate all the answers I get on this. I don't mind you being brutal at all.

I'm currently a Health/Life/Medicare agent and I'm really wanting to start in investments and financial advising. Is any one here a financial adviser? Did you start in insurance? Not sure what I should do! Should I get my series 7&66 or my 63&65 only? Any advice would be greatly appreciated.

 

[DHK]

"Financial advisor" is not a regulatory term. By all counts, I am a financial advisor, but I do not hold current Series 7/66 licenses.

If you want to be licensed to offer securities products/services, you need to decide what you want to offer and the appropriate licensing:

Selling securities for commissions requires licensing and registration with a broker/dealer:
- Series 6 (mutual funds and variable insurance)
- Series 7 (stocks, bonds, mutual funds, ETFs, municipals, options, and variable insurance)
- Series 63 - Blue Sky Laws often required with either a Series 6 or 7.
- Series 66 - combines the series 63 and series 65 into one license/exam for those who hold the Series 7

Institutional Money Management as an IAR for an RIA (fee-based asset management):
- Series 65 - Investment Advisor Law of 1940.

The commissions on the broker/dealer side can be lucrative, even after the payout grid. However, compliance, rules, regulations... will be a nightmare and will impact every facet of your current insurance business. In fact, you would have to disclose your insurance sales as an Outside Business Activity and you *may* be limited to only selling insurance through your broker/dealer. Any advertising, correspondence, websites, etc., will all be subject to compliance oversight and pre-approval. Technically, all your posts here would also be subject to that oversight.

If you have an idea of the size of portfolios you plan to manage, that can help. RIAs typically don't manage portfolios for relationships with less than $100,000. After all, assuming a 1% fee to the advisor, that's only $1,000 per year. Plus, you need to meet with the person regularly - at least annually to justify the fees that are being charged for giving ongoing investment advice.

That's just a start of some of the considerations to doing this right.

 

[LGilmore]

While the grass seems greener doing 'investments" think it through. I let my 6 &63 go a few years ago. Haven't missed it.

Compliance is a PIA, I found myself arguing with compliance over non security products. I spent 6 hours in my office refusing to show my securities officer my clients health information which they felt was their information. I refused and asked if they understood HIPAA. If it isn't a product I sell through them, it's none of their business what communication I have with a securities client over their life or health insurance. Took about a week for their legal team to agree.

Then there was E&O insurance coverage that quadrupled in one year, that they demanded I buy, even though the coverage was for 7's sales not 6. It would have left me uncovered for four times the cost.

You have to decide if it's worth it to you to do. I found it wasn't after 25 years of having one. just depends on what you're willing to deal with.

 

[rousemark]

I do financial advising all the time.. But my kids just ignore me.

 

[pfg1]

I do financial advising all the time.. But my kids just ignore me.

Ain't that the truth!

 

[LifeHealth]

Thanks for the help guys! I'm mostly interested in the series 65&63 so I can advise and help people set up financial plans, get out of debt and grow investments. This is the stuff I am super interested in doing which seems like I should go the RIA route so I don't have to deal with FINRA at all. I just don't know how much money is in it going fee only. I could still sell life and health insurance for commission right?

I would be ok not making a lot of money at the beginning and helping people grow their money. I have a long time outlook for it as I'm only 27 and with my existing book and a side business I run I'm making 70-80k now. I just want something to spend my time doing thats more productive then sitting looking at Insurance Forums

 

[pfg1]

Thanks for the help guys! I'm mostly interested in the series 65&63 so I can advise and help people set up financial plans, get out of debt and grow investments. This is the stuff I am super interested in doing which seems like I should go the RIA route so I don't have to deal with FINRA at all. I just don't know how much money is in it going fee only. I could still sell life and health insurance for commission right?

I would be ok not making a lot of money at the beginning and helping people grow their money. I have a long time outlook for it as I'm only 27 and with my existing book and a side business I run I'm making 70-80k now. I just want something to spend my time doing thats more productive then sitting looking at Insurance Forums

You don't need the 63 if you have a 65. Its 6/63 or 65.
Typical advisor fee income can vary - industry standard is 1%. So if client has $250k you would make $2500.

Yes, you can still do L&H for commmissions. How it all shakes out moving fwd is still unknown for sure...until the final DOL rule is here. It won't affect the ability to do other things for comm, but could affect the payouts, disclosure, etc.



I agree, would should probably all spend less time here. The only one who gets paid to be on the forums is DHK.

Sorry David, just poking. I do enjoy your posts and knowledge. Hopefully you are making so much money it doesn't matter what you do

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I do financial advising all the time.. But my kids just ignore me.

I just realized that I replied incorrectly last time.

My kids don't ignore me, the do the opposite!!

 

[DHK]

Thanks for the help guys! I'm mostly interested in the series 65&63 so I can advise and help people set up financial plans, get out of debt and grow investments. This is the stuff I am super interested in doing which seems like I should go the RIA route so I don't have to deal with FINRA at all. I just don't know how much money is in it going fee only. I could still sell life and health insurance for commission right?

I would be ok not making a lot of money at the beginning and helping people grow their money. I have a long time outlook for it as I'm only 27 and with my existing book and a side business I run I'm making 70-80k now. I just want something to spend my time doing thats more productive then sitting looking at Insurance Forums

Yeah, these forums can be addicting! lol.

Of those three areas you mentioned - only ONE requires a securities license: "growing investments" - specifically any recommendations on buying, holding, selling, or any analysis of securities.

The rest, you don't need a securities license to do. (You CAN do financial plans without giving advice on securities. Just present any alternatives as just that - an alternative.)

The license will let you be registered with an RIA firm as an IAR to manage portfolios. But if you're wanting to get more into financial planning with just an insurance license, you might want to check out the Insurance Pro Shop and learn how to strategically use permanent life insurance and annuities.

 

[LifeHealth]

You don't need the 63 if you have a 65. Its 6/63 or 65.
Typical advisor fee income can vary - industry standard is 1%. So if client has $250k you would make $2500.

Yes, you can still do L&H for commmissions. How it all shakes out moving fwd is still unknown for sure...until the final DOL rule is here. It won't affect the ability to do other things for comm, but could affect the payouts, disclosure, etc.

See thats why I'm not sure if it is realistic to do a 65 because I think the majority of my clients would be young families that don't have a ton of money right now. I live in a non typical college town. It's an LDS school so lots of young families that are probably going to be soon making a decent living, we also have lots of alarm/pest control salesmen who make a lot of money and don't know what to do with it. The rest of the business would be local families and seniors.

Is it typical to charge a fee to make a plan and help someone get started investing and be an adviser? I would love to help people get off on the right foot I just don't know if it would be a charity or be lucrative at all.

 

[DHK]

If you're not going to be selling insurance solutions for your income, then you may need to sell planning on either a project/plan basis, or an ongoing retainer basis.

https://www.kitces.com/blog/craftin...ancial-planners-value-to-prospective-clients/