posted on: 10/5/2006
revised: 3/10/2010
While researching an article on hourly fees for financial advisers, I came a across a publication from the U.S. Department of Labor titled "Financial Analysts and Personal
Financial Advisors" published at http://www.bls.gov/oco/ocos259.htm that was so ridiculous and misleading that I was angry knowing
that public tax dollars were being used to write such garbage.
First of all, the concept of putting financial analysts in the same discussion as personal financial advisers is absurd. The two occupations have almost nothing in
common other than the fact that the job title both contain the word "financial". Analysts do research, work in the corporate offices of financial firm (that tend to be concentrated
in NYC) and have little contact with the public. Personal financial advisers are in the retail business, spread throughout the communities of the country, and split their time
between personal marketing, sales and personal service to clients. The vast majority of people who call themselves "personal financial advisers" are in fact retail sales
representatives of life insurance companies and investment brokerage firms. The article simply says "Some advisors buy and sell financial products, such as mutual funds or
insurance, or refer clients to other companies for products and services—for example, the preparation of taxes or wills. A number of advisors take on the responsibility of managing the
clients’ investments for them". Clearly more than 9 out of 10 fit this category, so the word "some" is misleading and inappropriate here. This occupation is primarily a
commissioned sales job. The Department of Labor completely missed the boat on the job description.
The DOL article says there were 197,000 financial analysts and
only 158,000 personal financial advisers in 2004. These figures sound completely wrong
to me, but I have no other source of contrasting data. Perhaps the
count is heavily dependent on the
nature of the procedure used to gather the data. Two people with the same job could call themselves different job titles. For example, a registered representative working in a
retail office of Merrill Lynch could say she was a stockbroker, while the person a the next desk who performed the same daily tasks could call herself a personal financial adviser.
Common sense tells us that there are far more people working in the retail financial services field than in corporate securities and debt rating. Again,
it seems than DOL misses the big
picture here.
The article continues to lump unrelated data together to arrive at inaccurate conclusions about things like educational requirements, working conditions and earnings.
It's just a shame.
It seems to me that any young person who read this article during the process of selecting a career runs the risk of forming a completely misleading impression of the job of
personal financial advisers.
keywords: personal financial advisers
related topics:
Copyright 2010 by Tony Novak. Originally produced and published for the "AskTony" column syndication prior to 2007. Edited and independently republished by the author in March 2010. All rights reserved. |