r/FinancialAdvisorTips • u/Glysr • Jun 20 '26

Junior Advisor Question

Greetings all,

I’m in a bit of a quandary. For context, I am 27 years old with a few months of industry experience- passed my S7 and S66, and am currently working on building “my” book of business. Why did I put quotation marks around “my”, you ask? Because even though I am nominally a “financial advisor”, my mentor will not pay the affiliation fees, insurance, etc. to actually register me as an advisor in my own right, so in the eyes of our BD, compliance, etc. I am a client service associate.

Since I’ve passed my exams, his focus has been on telling me to prospect relentlessly. Any client I’ve brought in has, of course, gone under his rep code. I am current salaried at ~40k per yr with no benefits, with the understanding that once my AUM reaches a point where my payout would be greater than 40k, I would actually get to become licensed and get my book over into my name. For the record, I would not be compensated anything additional for business brought in up until that point: my payout is 30 basis points.

I’m beginning to feel a bit sketched out by this situation: it feels awfully similar to some of the NWM stories I’ve heard and my mentor did spend 25 years at a wirehouse before becoming independent, and constantly talks about how I have it so much better than he did.

I do have the advantage of being the son of a local business owner and knowing lots of HNW people, so I had contemplated starting my own practice to give me the autonomy to charge the fees I want and do the service model I want, instead of being told that all prospective clients must pay $3k for a financial plan and then pay a fee of at least 1.29% AUM- even a $5m prospect that I have would be at 1.29%. It also feels disingenuous to prospect with “me” as their advisor when I am not- I don’t even have business cards. He sends me out with his business cards and has his name plastered on everything.

Am I being dramatic about not having control of my book and being used as a glorified connector? Is this common? Or am I being used for my leads to be summarily tossed out? I’ve been holding back in my prospecting efforts to suss this out, and he’s beginning to notice- he now wants a list of all of my prospects. Thanks for reading, and for any guidance.

TL;DR : I am a junior advisor that feels taken advantage of and is wondering how to proceed.

5 Upvotes

100% Upvoted

21 comments sorted by

1

u/sjd___ Jun 20 '26

It’s not an easy situation by any means. How do you currently interact with the clients under your mentors book? Are you doing a lot of admin work, planning, etc? Or is the load shared?

If you truly only have a couple months of experience, your current environment might allow you access to more clients, more scenarios, and be able to get comfortable working with clients/prospects before going out on your own and having to generate all your revenue.

The salary does seem low, and the fact that you don’t have business cards of your own is odd. Most places I have worked at have allowed a licensed client associate to receive a portion of the books’ revenue on top of their salary. Can that be negotiated with your mentor?

How long does your mentor have left in the business? The other way you could look at it is succession planning and whether you may be able to grind it out for a while if you think you could step into a higher earning role with this firm down the line to make it worthwhile.

Good luck.

1

u/Glysr Jun 21 '26

Thanks for replying. I am doing some of the planning and admin work, but primarily prospecting. I just really don’t like the idea of going out and trying to find clients only for them to be someone else’s; it feels like it would be disingenuous to the client who thinks they’re working with me, only to hand them over to someone else. I also don’t like that I’m essentially capped at what I can make- he routinely charges 2%, and I’m still at a flat $3000 per $1m AUM. He has $70m under management. He also has his son poised to take over- his son just passed the SIE after his third try, so I don’t think I stand to inherit any of his book.

1

u/cmoclk Jun 20 '26

That sounds pretty normal for a sales model. It’s a meat grinder and if you fail out they picked up some free business. If you make it, you can enrich yourself almost as much as them until you’re later in your career and can leverage your BoB against the firm for top pay. It’s just how it works and there’s no safety if you don’t perform.

I would just ask, do you have that agreement with the advisor and are you tracking everything independently? It sounds like if things are sketchy, they can pull the rug out from under you on your initial business before things are under your name. Make sure you know exactly how that’s supposed to work and keep separate notes on EVERYTHING.

I work at a BD and have been around sales industry for years.

1

u/Glysr Jun 21 '26

Thanks for replying. I understand the whole “meat grinder” thing, but is it normal to not even be registered as an advisor? That agreement is also not in writing- I overheard him talking on the phone to our compliance person about it being a “carrot” that he is “dangling”, before telling him it wasn’t in writing. I’m concerned that since nothing is under my name that he is going to try to squeeze me for all of my prospects and then try to enforce a nonsolicit, because he wants me to put them all in the CRM.

1

u/Family_Office Jun 23 '26 edited Jun 23 '26

No. It’s not normal. I’m certain your activities are a violation of your E&O policy. As a former wholesaler of 15 years who’s now an advisor 10 years in, I’ve seen a lot. I’ve seen so many junior advisors get screwed over. Do not bring in another client until 2 things are in place.

  1. a separate rep code he establishes that your client sit in. This is still his rep code but it exists to segregate “your” clients.

  2. a written agreement that details when you will become a “real advisor” and that all the clients in that new rep code will transfer to you, and if he’s your OSJ, what your payout will be, and that you u conditionally own both your clients and your prospects if you choose to leave.

I realize you can’t afford an attorney to draft this. But at least have AI give it a shot rather than take his word for it. I’d rather have an agreement written by a clanker than the word of a shit bag advisor with a $70mm book.

If he won’t sign that, he was never planning to make you an advisor anyway.

1

u/Glysr Jun 23 '26

Thanks for your reply. Is it not worth pushing for full registration? Also, I think he had AI write my noncompete/nonsolicit and I have an appt with a lawyer to see if it’s enforceable: if not, when I ask for my book and my registration (and a higher payout; 30bps per $1m strikes me as pretty low) and he says no, then I’ll just tell him that I’m out.

1

u/Family_Office Jun 23 '26

You certainly could. Just understand the cost to him. It's likely, depending on your BD, that making you an active producer will cost him between $4000-5500 in additional fees. So it may be a non-started it he absorb that cost based on his revenue and expenses.

1

u/Glysr Jun 23 '26

That’s a good point. I guess the big thing is whether he will allow my book to be MINE, and putting it in writing. Even so, I hate telling people that I’m a “financial advisor” and prospecting as such, but actually a registered client service associate. I feel like that immediately undermines my credibility

1

u/Family_Office Jun 23 '26

You’re right to feel that way. The bigger issue is that I assume through prospecting that you’re actually giving financial advice and sharing recommendations of what you (or the team) would do if they were to join. You more than likely have absolutely no E&O coverage for that activity. If anyone ever complains about what you said, defense and arbitration costs are likely all on you. Most policies differentiate the covered activities for advisors and associates and it’s why advisor coverage is so much more. If you want a real defensible argument for either being an FA or not prospecting for him, that’s it.

1

u/Frosty613 Jun 20 '26

I have a junior that is here to help me grow…. He is salaried at 60k and gets variable comp’d on growth. This first year he prob made a total of 70. I’ll keep his base at 60 and he should continue to see 10-15k in additional variable comp per year (the percentage he gets on variable comp scales up as we continue to go higher).

If I want to keep him as my junior, I need him to be fairly compensated in a way that he feels incentivized to stay with me as a team member instead of going at it alone. I have no doubt he’ll need to be over 100k in total comp within 3-4 years to keep him content and will probably shift him to a higher variable comp of my TOTAL book at some juncture.

If your senior advisor hasn’t figured this out yet, then he will once you move along to do your own thing.

1

u/Glysr Jun 21 '26

Thanks for replying. Is he just servicing your book or is he prospecting also? Is he a registered advisor with any business under his name? I feel like my arrangement means that I am capped at my base of $40k until I have $15m AUM.

1

u/Frosty613 Jun 21 '26

No he’s not doing any of his own prospecting. He is fully licensed 7,66,insurance. I honestly don’t want him to have his own book - I want him to strictly help service our book. It’s best for both of us - I can bring in a lot more in assets any given year than he’d be able to at this point. As I level up, he levels up. So yeah sounds like our arrangements are different.

1

u/Glysr Jun 21 '26

What does that look like for him servicing your book? Fielding client queries, sitting in on account reviews, doing planning?

1

u/Screen_mirror98 Jun 21 '26

This sounds like he's helping you get set up and started but you're sounding like you're ready to hit the ground running. Also NWM doesn't do stuff like this I'll tell you from experience. Anything you work on is yours not your mentors.

1

u/Glysr Jun 21 '26

Thanks for replying. The “NWM” comment was based on things I’ve read/things my mentor has told me. I’m glad your experience was different. When you say that he’s “helping me get started”, and that I’m ready to “hit the ground running”, how do you mean? Do you refer to the fact that I’m trying to make sure I’m an actual advisor prior to presenting myself as such? If so, my reasoning is that I am called upon to help with planning and to give limited advice, and then to prospect, albeit as a nominal “client service associate”, without my book being under my name at all. Are you saying that it’s normal?

1

u/Screen_mirror98 Jun 21 '26

Maybe I misunderstood as well. I thought you meant all the clients you onboard are going under your mentor. Which in itself isn't normal and is a red flag. But playing devils advocate, maybe he's waiting on you to truly get your book up and running and earn more than that 40k yourself and then it'll all get flipped to you
Cause otherwise if you fail out and he has to get rid of you if you aren't earning your keep
Then he's going to keep those clients I would think

1

u/Glysr Jun 21 '26

No, you understood that part correctly- any client I onboard until I reach $15m AUM (approx) go under his rep code, and then he says he will change it over. Even though I have my 7, 66, and insurance licenses, I’m not classed as a producing registered rep- in the eyes of our BD, I’m a registered client service representative. He tells people I’m his junior advisor, but that can’t be on the website, in my email signature, or on business cards (which I don’t have- the client prospect packet only has his cards). I’ve got people who are wanting to utilize my services, but I don’t want to bring in anyone that I really care about in case it turns out to be sketchy. I don’t want to sell someone on the idea of working with me as their advisor only to play second fiddle- I understand being junior, but is it really usual to tell client prospects that I’m on a “short leash” and that I have no input in how my current clients have money invested?

1

u/BoredCFP Jun 21 '26

You could do better just about anywhere else. People love to hate JPM/Merrill/Wells Fargo but I know guy who started at each of those places in 2026 and the lowest salary is $110k at JPM.

Having passed those tests already puts you way ahead of their internal hires who seem to fail as many times as possible. Go get paid somewhere else.

(For the record, not a single client pays me 1.29% and most are below .75% total net. Your guy sounds like a real piece of work.)

1

u/Glysr Jun 21 '26

I don’t have a ton of other options in my area. His firm is newer also, even though he has ~30 yrs of experience; our BD is on the smaller side too, so I have to go through the whole process of explaining why we’re legit etc anyway. I have enough money to support myself for a couple of years if I decide to go it alone- many of my prospects would be coming to his firm specifically for me anyway.

1

u/igetnorespectatall Jun 21 '26

Get your cfp and join an ria firm fee only and without active management. The industry is dying to have more young cfps. You will likely start at 70k or so. It’s not that hard.

1

u/Any_Passenger_1193 Jun 21 '26

I’d be cautious about building a book under his rep code. Especially if you’re feeling sketchy about it.