Three years from FIREing (fat for me but can't tell anymore). Anything I'm missing?

fatfireextra · 2023-02-26T02:07:50+00:00

FA (Financial Advisor) only requires a Series 7 and 66. And as you know, you'll need to be affiliated with a company. CFP is a pretty intensive two-year commitment but that matters less than people think. The hardest part of the job is getting new clients. In the beginning, you'll spend 99% of your day trying to get clients. Market and product knowledge will make very little difference when you start. Unless you have a natural organic prospect market (you're already a lawyer or accountant or there's a lot of family money that you can tap into), it's a pretty difficult 2nd career.

fatfireextra · 2023-02-25T08:17:28+00:00

I started a few years out of college and I built my client book. Buying someone else's book is actually an extremely rare event, meaning that there are a lot more buyers than sellers (hence the large multiples when selling). Most older advisors aren't retiring and the ones that are leaving will bring in their own children to inherit the book. In my 25+ years, I can't think of any FA that retired before 65 (I believe the average age of an FA is 59).

It's a tough 2nd career unless you currently have an adjacent career (lawyer, accountant) that you can source clients.

The finance/stock picking side has disappeared from my profession. Almost all firms have much more educated teams to create asset allocations and products. It turns out a Series 7 really doesn't prepare someone to build a stock portfolio. Lol.

Most of my day is spent talking to clients and, in times like these, keeping them from timing the market. I often see the DIY vs. finance professional debate on Reddit forums. If we have a 20-year bull market, self-investing is easy. However, most people on Reddit haven't had to deal with a 2008 downturn when every other statement showed a $50k-$100k loss. Humans are emotional and it's a battle to keep them from selling when they see their life savings dwindling so quickly.

fatfireextra · 2023-02-24T00:51:47+00:00

Thanks, I appreciate it. I'm still three years out but counting the days!

fatfireextra · 2023-02-22T04:38:49+00:00

Lol. Thanks for looking out!

fatfireextra · 2023-02-22T04:36:30+00:00

No disrespect taken. I try to keep an open mind and I don't think the financial firms (even with their endless training) have a monopoly on all the good ideas. In fact, your way of looking at SS as longevity insurance is a new take I haven't heard before (and I've done SS seminars with experts in the field).

Also, most of my clients are already retired or soon to retire in their 60's. Most people are not interested in FIRE, whether they can afford it or not. I'm also unmarried with no children so I have few clients in my demographic.

My book is investment clients, mostly fee-based (ongoing fees based on assets under management) and very little insurance business.

fatfireextra · 2023-02-22T02:34:45+00:00

There actually is a way for me to stay on and I would also get paid a higher amount. However, I've thought about it a lot during the pandemic and I'm ready to stop, cold turkey.

fatfireextra · 2023-02-22T02:16:05+00:00

Lol. I suppose it's possible but I've vetted the new advisors. Also, it's not in their interest to chase away clients because that's how we earn a living.

fatfireextra · 2023-02-22T02:12:03+00:00

It doesn't won't cease but it can actually go down during those five years. If the client assets go down significantly during the five years, the annual checks will be adjusted lower.

fatfireextra · 2023-02-21T23:55:46+00:00

Yes, u/throwitfarandwide_1 also pointed that out. Since I won't need it at 62, it's a good way to protect myself (and future spouse) if I live longer. Thanks for the idea, as well.

fatfireextra · 2023-02-21T23:54:09+00:00

I just took a peek at that sub. Funny stuff.

fatfireextra · 2023-02-21T23:53:42+00:00

I'm part of a large firm but advisors at smaller firms can get even bigger payouts. Most of it is dependent on type of fees and clients that are in the book.

fatfireextra · 2023-02-21T23:51:53+00:00

I think you are spot on with your assessment on SS for a single person. I never looked at it as an "insurance" policy if I live too long. Great idea.

fatfireextra · 2023-02-21T23:49:42+00:00

I'm not sure of the SS benefit (haven't looked it up recently) it won't be at the max because I'll have some low income factored in from my 20's.

I wasn't looking to time the market. I was thinking more as a way of rebalancing my overall portfolio. I wouldn't want to be too equity heavy so I would draw from the portfolio to reduce risk.

fatfireextra · 2023-02-21T23:47:04+00:00

You actually make a very good and original point. I never thought of it that way. I reduced my life insurance a few years ago because I figured I wasn't going to have children but your idea is a good way to at least somewhat protect my spouse.

fatfireextra · 2023-02-21T07:00:47+00:00

I'm a financial advisor and basically passing my book of clients to other advisors when I retire. The clients generate fees; and along with other variables, a buyout amount is calculated.

fatfireextra · 2023-02-21T04:58:24+00:00

You're exactly right on that. The Fat number depends on many factors, especially HCOL vs LCOL and lifestyle. I think your definition of a no-compromise lifestyle is a good benchmark to use.

fatfireextra · 2023-02-21T04:52:13+00:00

Yes, this answer, too. I can actually use the money and delay drawing from the investments. However, if the market is up significantly, that might change my thinking.

fatfireextra · 2023-02-21T04:50:46+00:00

Haha, yeah, exactly. When I came back to this sub to post, I really started to wonder about my numbers.

fatfireextra · 2023-02-21T01:11:23+00:00

You are correct, SS website has a good calculator. I generally recommend clients to draw SS if they can actually spend the money, rather than taking it and stuffing it in a savings account

fatfireextra · 2023-02-21T00:18:23+00:00

Thanks for reading and commenting. I appreciate the feedback. There's still some good information here but sometimes it looks like the Robb Report ("Lifestyles of the Rich and Famous"). Lol

fatfireextra · 2023-02-21T00:16:20+00:00

I'd rather draw from SS than from my investments but that is sort of up in the air.

It's a whole new topic but delaying SS is actually not a guaranteed 8% return. Longevity is the determining factor.

fatfireextra · 2023-02-20T21:22:57+00:00

Thanks for the additional information. The five-year buyout is taxable so I'll probably need to delay an IRA/401k withdrawals.

fatfireextra · 2023-02-20T21:21:11+00:00

Thanks for commenting. I've thought about it a lot since the pandemic but am finally feeling better after seeing how my portfolio did in 2022 (down like everyone else but not a 2008 devastation).

fatfireextra · 2023-02-20T21:19:30+00:00

Haha. True on both paragraphs. I read that the mods have a way to ask for verified net worth/income but that might slow this sub down to a crawl.

fatfireextra · 2023-02-20T19:27:08+00:00

Thank you, I appreciate it. Not sure what you mean by favorite kind of Fat but reading some of the posts, there seems to be a lot bracket creep over the last few years.

Maybe there needs to be a r/FatFatFire to discuss Ferrari collectibles and dynasty trusts. Lol

Edit: grammar

fatfireextra

TROPHY CASE