Please Help Me Decide - Stay at my current job or take another route?

Hi folks!

Thanks for reading. Your opinion on my situation is much-appreciated.

Context: I am in my mid-late twenties, and my ultimate goal is to start an investment company. I am not sure what kind yet, but I am thinking either something structured like Berkshire where I can buy stocks and other companies, or something like a hedge fund. Idk yet. I just know that I want to do something that is purely capital appreciation in the future. I think/know that I will enjoy it better than my current role because it is potentially more lucrative and also seems to be more exciting/challenging. I love risk and challenges and I love trying to make money.

Situation: I am currently an associate financial advisor at a financial advisory/wealth management firm with 2 financial advisors/private wealth managers (we use both terms interchangeably), each managing about $250 mill for a total of about $500 mill AUM. They are business partners. My undergrad is not in finance, however for a while now I have had a strong interest in investing. I took this job as a way of breaking into finance. My plan was to do this for a year or two and then apply for MBA or attempt CFA in order to cross over higher finance - into a part of finance that I think will be more relevant to my goal of starting an investment company.

So far I have learnt a lot about finance by working here. I have passed the Series 7 and 66, attended several wholesaler meetings, I have access to several investment research tools, so this has been great for a non-finance major so far. But financial advising is a lot more than just investing; we deal with setting up IRAs, 403(b)s, Annuities, life insurance, and different other things that are not relevant to my goal of becoming a better investor so that I can have a chance at running an investment company. In fact, I do way more of these administrative things than investment-related things, so I always knew I needed to find a better role. I never did worry about bringing in clients because I planned to leave shortly. The partners are aware of my long-term goal, and they are aware of my intention for my employment with them to be short-term.

Dilemma: One of the partner wants to retire soon. Both partners like me and think I am competent, so they asked if I would be interested in the retiring partner transitioning his practice to me. The company will finance the buyout of the practice, and I will be making around $700k per year. Aware that my intention is to start an investment practice in the future, both partners think financial advising/wealth management can be a good route to my destination. Their rationale is that (1) I will be learning more about finance and investing as I become more responsible for managing client portfolios, and (2) I will start earning close to a million per year around age 30 (the transition will take about 3-4 years) which will help me accumulate assets fast and put me in a good spot to start an investment company later on in life. 

That said, buying the practice would mean I would have to commit to the financial advisory/wealth management role for about 10 years at least because I will have to payback the loan I get to buy the practice. I will also have to make detours such as study for the CFP instead of CFA which is more focused on investing, and I will have to deal with retirement-related things I don't really care for such as: social security rules, retirement account rules, annuities, life insurance, etc. (left to me, I just want to be an investor! I want pure capital appreciation).

I know this is not a bad spot to be in, but I really do need some advice. Should I quit this job as planned and try to enter a part of finance is more focused on capital appreciation in pursuit of my goal to start an investment company? Or should I stay where I am, take this good opportunity to buy an established practice and start making upper 6 figures around age 30? (If I take this deal, I will try my best in addition to being a financial advisor/wealth manager to learn as much about capital appreciation as I can. Maybe even attempt the CFA after the CFP. Another advantage to this route is that I will already have some existing clients that I can ask to be investors in the in the future investment company if they believe in my vision/ability to make them money).

I am so confused and this is such a huge weight on my shoulders. Had the possibility of this deal not been offered to me, I would have been planning to move to another role next year. But now that it has been offered to me, it gives me something to think about. I don't want to feel as if I am selling out of goal, but I also don't want to shut the door on a great, lucrative opportunity without thinking it through.

Thanks for reading, and thanks for your suggestions. I will be happy to elaborate more and answer questions.

Comments (5)

Most Helpful
2mo
rickle, what's your opinion? Comment below:

I think I've seen this topic in a different thread but this one provided much more info. My first thought is you stress a large distinction between investor and advisor. I don't disagree as investors are typically managing a fund that needs to find its place in a client portfolio assisted by an advisor. You also mention the other advisor tools like insurance, retirement planning, etc. and consider them to be outside the investor role. While they are certainly outside the fund manager role (analyzing companies, deciding on trading strategies, building a portfolio), they are part (an important part) of the overall portfolio. So in that sense, the PWM is acting as the investor for his client while considering a 360 degree view, not just building a specific asset class sleeve. I get the difference, been doing this a long time, but wanted to put a different face on what an investor is. There are institutional investors and there are retail investors. They both serve a very important role.

Now re your specific situation, I would think, provided you're comfortable with the debt finance / structure  AND you like being client facing (that's a huge component), I would buy the practice. What do you have to lose? You gain incredible client facing experience. You get to make investment decisions / recommendations within client portfolios. You earn a ton of money. You OWN a business! And if you don't like it, you have an asset you can sell. Very difficult to move to a "investor role" from where you are. You would need top MBA from a quant oriented program (Chicago, Wharton, Sloan, etc.) Very few seats and long runway to that spot. You would recruit to an analyst program and stay there for many yrs (most stay there forever or at least 8-10 yrs prior to becoming a PM). You'd be making more money with the purchase (assuming some growth) all way up until you were a seasoned PM. The amount of return you could earn in your own investments created by cash flow could be rather large.

I think two big pieces of the puzzle are: do you want to be client facing and do you want to own a book? Takes a certain type ofperson.

2mo
413dude, what's your opinion? Comment below:

Thank you very much for this! Yes, I made a shorter, more catchy post because no one responded to this lengthy one.Based on all the advice I received here and some of my initial considerations, I have decided to accept the offer from my boss, so the transition will be structured shortly.No, I do not mind facing clients & I do not mind owning a book. Just as you stated, I can always sell it if I do not like it. What is so crazy to me is how the trajectory of plans and life can be so greatly affected by one event, albeit a good one in this case.I've started taking the FA journey much more seriously since it will be my life for the next couple of years at least. I will keep your advice in mind and make the best of the process. Thanks again!

2mo
rickle, what's your opinion? Comment below:

Good luck. Also, those other planning opportunities (life insurance, annuities, long term care, etc) represent a huge opportunity to truly help your clients and create tremendous practice revenue growth. You can always bring in an expert to handle that part of the practice. And no, it doesn't have to  cannibalize your business. It can very easily be additive while you get your arms around the whole client. Would be a great opportunity for an insurance based planner to partner with you.

2mo
413dude, what's your opinion? Comment below:

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