HARD CASH

By Rick Haglund

These days, Marc Hudson makes a good living as a financial advisor, but the beginning of his career was humbling.

Required by his new employer in Lansing to come in with a list of 200-300 friends and family as business prospects, Hudson said it made things “difficult.”

“People started avoiding you,” said the now-owner of Hudson Wealth Management.

A move from Lansing to Traverse City didn’t help matters, he says.

“There were some rough bumps; I did a lot of cold calling,” he said.

He hung in there, making phone calls from 8 a.m. to 9 p.m. every day.

“It was a great opportunity to get my feet wet,” he said.

After surviving all the bruises and rejections along the way, Hudson started his own firm in 2015. He said working to help clients achieve their financial goals is immensely satisfying.

“In the beginning you’re eating ramen noodles ... but it’s an amazing career if you get through the early years,” he said.

Hudson’s experience is not uncommon. Being a financial advisor is a demanding profession that requires, in most cases, a bachelor’s degree in a financial area, a lot of grit and a strong desire to serve clients.

It’s also a career where the successful ones say there is much opportunity. That’s due to a lack of new recruits to replace a growing number of retiring advisors, and a heightened need for financial advice by workers being forced to take on more financial planning responsibilities.

“It used to be everyone had Social Security and a pension. They didn’t need a financial planner,” said Debbie Craig, owner of Craig Wealth Advisors in Traverse City. “Now there aren’t pensions anymore and people are taking Social Security early. Everyone’s been forced to plan for their retirements themselves.”

Last year, 18,207 new financial advisors entered the business nationwide, but

Stanley’s Traverse City Wealth Management office. “You need to have a very disciplined work ethic.”

Many firms are looking to hire people who are certified financial planners or who are working toward the designation. Getting that certification requires earning a bachelor’s degree in finance or accounting, passing a six-hour-long test after months of studying and gaining two-tothree years of work experience.

Over the past decade or so, universities have begun to offer bachelor’s and master’s degrees in financial planning and wealth management. Michigan State

Possessing emotional intelligence –the ability to understand, interpret and respond to the emotions of others – is crucial to succeeding in the business, he said.

“You can be really good with the numbers, but not so great working with clients,” Braund said.

Hudson said new advisors often come from other occupations, including teaching, engineering and even bartending. But they must have an aptitude for financial concepts and a desire to help people.

Dave Knight, an independent advisor who works under the umbrella of Stonepath Wealth Management in Traverse City, started out working as a teller at a local bank while studying to become a certified financial planner. He stayed for seven years, eventually becoming a personal banker before joining a local advisory firm.

“I didn’t realize it at the time, but I was developing a very good network that would eventually be my client base,” said Knight, who holds a bachelor’s degree from Western Michigan University’s personal financial planning program.

13,169 advisors washed out – a 72% failure rate, according to Cerulli Associates, a financial services information firm.

Meanwhile, Cerulli predicts that more than 100,000 advisors – 37% of the industry’s total – will retire in the next decade.

“It is extremely hard to crack into this industry and stay alive,” said Mark Lundmark, executive director of Morgan

University’s master’s program, for example, is an eight-month curriculum that qualifies graduates to immediately sit for the certified financial planner exam.

“Having a master’s degree separates you from the rest,” said Eric Braund, who is currently looking to hire an advisor at his firm, Black Walnut Wealth Management in Traverse City.

Craig become a certified financial planner after a career in corporate finance at the former Oldsmobile division of General Motors in Lansing. She decided to switch to personal finance as a way of having more independence and flexibility while raising a young family.

She and her husband, who also had high-stress job, wanted off the corporate

Short’s Thirst Mutilator Hop Water treadmill and relocated to Traverse City in 2000.

“We were always moving for one of our jobs,” Craig said. “I was 38 and thought there’s probably a better way to live. We moved up north for the quality of life.”

Craig worked for several other local advisory firms before starting her own business in 2004. Nationally, she’s part of a small percentage of woman working in the financial advisory industry; one reason why there’s a shortage of advisors.

Experts cite a variety of reasons why so few women are financial advisors, including gender bias, lack of mentors and unsteady pay. That hurts the entire industry because women control about 40% of wealth in the United States and many of them want to deal with women advisors.

The industry’s largely commission-based pay structure and low starting pay also deters people from entering the business.

“You might work 60 hours a week and make less than the year before,” Craig said.

Michigan financial planners are among the lowest paid in the country, according to a recent survey by online job website ZipRecruiter. Michigan ranks 40th in the country with average financial planner pay of $75,212 a year. Many starting out make less than $35,000 a year.

Lundmark of Morgan Stanley said the financial advisory business has changed a lot since he started 37 years ago, with cold calling and luring potential clients to investment luncheons becoming relics of the past.

“Today you probably don’t even answer your phone unless you know who’s calling you,” he said.

Lundmark said the best way for someone to become a financial advisor is to join a reputable firm that offers comprehensive training, mentorships and financial support along the way – something Lundmark said he’s doing with a recently-hired advisor.

“That is truly the ticket in my view for these new people,” he said. “It’s almost impossible as a young person to start out on your own.”