By Dr. James M. Dahle, WCI Founder

I once thought financial advisers were “experts” in their field like a physician and that it was worth paying to get their advice.  Now, while I’m sure there are some financial advisers out there that do their clients more good than harm, the vast majority are salespeople with little to no experience in finance or investing.  Have you ever considered what the qualifications to become a financial adviser are?  They’re posted on job hunting sites all over the internet.


Here’s an Example for an Ameriprise Financial Advisor Job:

Required Qualifications for Financial Adviser

  • FINRA Series 7 and Series 63 or 66 licenses and state insurance licenses, or the willingness and ability to obtain them through our company-paid training and licensing program
  • Ability to pass a pre-employment background verification and U-4 FINRA verification
  • Outstanding verbal, written and listening communication skills; superior customer service skills
  • Ability to develop and maintain professional relationships; have the desire, comfort and confidence in networking with others
  • Ability to quickly compile, verify and calculate information to provide solutions and recommendations
  • Demonstrated ability to display and maintain a highly professional demeanor consistent with Ameriprise values and brand
  • Ability to work a flexible schedule; with some evening hours required
  • High level of confidence, perseverance and a strong desire to achieve and succeed.
  • Demonstrated high level of skill in the following areas: organizing, planning, and prioritization

Preferred Qualifications 

  • Previous sales experience or exposure
  • College degree


Wanted: Sales Guy Who Can Pass a Test

What are they looking for?  Well, mostly prior sales experience it seems to me.  Finance degree?  Nope.  MBA?  Nope.  CFA or CFP (designations that actually mean something)? Nope.  The only technical requirement is a series 7 and a series 63 license.  How long does it take to get those?  Well, I’m not exactly sure, but there is a “Dummies” book for it.  Here’s what some advisers say about it:

  • “Study your balls off for a week and you will pass!  There is NO shortcut to pass this test, If you are a good student, a week is all you need, if you are a moron, you may need a month to study. Take every exam 2X and study why you got a question right/wrong. I did not bother to even read the material. You should not get a single options or regulatory question wrong. I studied for 6 hours a day for 7 days to pass the first time.”
  • “Buy series 7 for dummies 6 months before you take the test. Pick it up and flick through it twice a week for 6 months. 15 dollars USD secondhand on amazon.”
  • “There were guys at bright studying a week and getting high 90s. One guy just studying for the weekend and got something in the low 80s.”
  • “I was basically told “pass this or you’ll be fired” so I read the book, and then spent the weekend before taking practice tests over and over. I got an 89. There is no short cut.”

That was in their own words.  I think most of us have spent four times as much effort preparing for a single anatomy test!


What Financial Advisers Think About Doctors

As long as we’re using their own words, why don’t we take a peek and see what they think about doctors?  We’ll just wander over to and search “doctors.”  Here’s what we find:

  • “Follow them home from the clinic. Give them 5 minutes to kiss the wife and kick the dog. Then smile and knock, knock away….”
  • “I’ve been getting doctors on the phone by telling them I have some great pictures of them with their daughter. The ones w/o daughters call back very quickly.”
  • “You may ask the gatekeepers which times/days he sets aside to meet with drug reps. Call on them at that time.”
  • “If you have a background dealing with these guys and know how to work their psychology to your advantage, it could be a win.”
  • “I agree with Cape1.  I have a few physician clients and prior to becoming an FA, I worked in the medical field.  Learning their psychology is key as well as learning to massage their egos.I’ll go one further though… although most think they know more than you (about everything), what you’ll find is that most have crappy portfolios and ACTUALLY know very little about financial matters.”
  • “I would say 35 earliest, over 40 would be ideal. They are generally horrible investors. Most are too proud to admit they know nothing about investing. I would maybe think about disability insurance or malpractice insurance if I was going to market to doctors.   They hear sales calls and pitches all day from drug reps. Be original. Try speaking to the office manager or doing something different.”
  • “My experience with docs is much better. Dentists, family practitioners, pediatricians, psychs, and even veterinarians, all terrific delegators. Surgeons, on the other hand, not so much.”
  • “From my experience/perspective, attorneys, engineers and surgeons are not who I want to build a book around. I’ve had several engineers come to me through referrals, but I’m really upfront with them about how it’s important that they resist the urge to micromanage.”
  • “I’m looking at the possibility of prospecting doctors for the sole reason I know they have money, and a lot have their own practice where a good potential for 401(k), retirement, business assets could come from.”
  • “I’d figure out where they live and prospect them there.  Too many gate keepers at the doctors office – they are used to sales guys blowing their phones up.”
  • “Clients pay us a lot of money so they don’t have to know what the freakin risk is of a CDO.  If we as advisors can’t see that, then we shouldn’t be in this business.  Most advisors don’t do NEARLY enough to earn their fees.  That’s one thing that bugs me about life at Jones…there is this “belief” (which exists at many firms) that the firm will worry about the investments, and we just go out and prostltute for new clients.  Of course, that’s masqueraded as “planning time with clients”.  In reality, the firms don’t care what we know about investments, they just want us to dedicate as much time as possible to finding more assets.”

If you weren’t sure what kind of relationship a typical financial “adviser” was looking for with you, now you know.


Selling. Selling. And Selling

Our esteemed colleague, Dr. William Bernstein, said this in his classic 4 Pillars of Investing:

“Make no mistake about it, you are engaged in a brutal zero-sum contest with [the financial industry]– every penny of commissions, fees, and transactional costs it extracts is irretrievably lost to you….

Brokers do undergo rigorous training, sometimes lasting months–in sales techniques.  All brokerage houses spend an enormous amount of money on teaching their trainees and registered reps what they need to know– how to approach clients, pitch ideas, and close sales.  One journalist, after spending several days at the training facilities of Merrill Lynch and Prudential-Bache, observed that most of the trainees had no financial background at all. (Or, as one used car salesman/broker trainee put it, “Investments were just another vehicle.”)….

What do brokers think about almost every minute of the day?  Selling.  Selling.  And Selling.  Because if they don’t sell, they’re on the next train home to Peoria.  The focus on sales breeds a curious kind of ethical anesthesia.  Like all human beings placed in morally dubious positions, brokers are capable of rationalizing the damage to their client’s portfolios in a multitude of ways.  They provide valuable advice and discipline.  They are able to beat the market.  They provide moral comfort and personal advice during difficult times in the market.  Anything but face the awful truth: that their clients would be far better off without them.  This is not to say that honest brokers who can understand and manage the conflicts of interest inherent in the job do not exist.  But in my experience, they are few and far between….

Brokers will protest that in order to keep their clients for the long haul, they must do right by them.  This is much less than half true.  It’s a sad fact that in one year a broker can make more money exploiting a client than in ten years of treating him honestly….

Your broker is often your neighbor, fellow Rotarian, or even family.  And eventually, by design, they all become your friend.  Severing that professional relationship, although necessary to your financial survival, can be an extremely painful process.”

Eye-opening?  Of course.  But a sad fact of life.  Now there are financial advisors out there who will act as your fiduciary, but they are few and far between.  The fact of the matter is that by the time you know enough to choose a good financial adviser, you probably know enough to do all of this yourself.