Are you fascinated with investments and financial markets? Do you get satisfaction out of helping people figure out their financial lives so they can do what’s most important to them? Are you interested in being a financial advisor? What’s more, are you interested in being a million-dollar financial advisor?

If so, check out David J. Mullen Jr.’s book, “The Million Dollar Financial Advisor” (2010), with powerful lessons and proven strategies from top producers. It’s regarded as industry standard, and is a rare book since advisors tend to be segregated from one another and there is little knowledge sharing between them. Keep reading for a brief summary of the main points in the first half of the book.

Just like the investment and accounting professions, financial planning is a competitive field. The best financial advisors differentiate themselves by 1) specializing in an area of financial planning that they tend to be successful with (e.g. tax, wills, small business liquidation), 2) specializing with a client group they are popular with (e.g. doctors, lawyers, middle-aged women with children), and 3) building rewarding relationships with wealthier and wealthier people who they turn into their clients. After getting any designations (CFP is highly recommended), most financial advisors start by serving clients with a broad range of skills to get an idea of what they are good at, and they often open hundreds of small accounts per year. Over time, however, the top producers realize that they cannot effectively service more than around 500 small clients a year, and they start trimming down their client base through a process called divesting. Basically this means that they pass the clients with the lowest potential to more junior advisors whose business would benefit most from helping clients of that size, while the rising-star advisors would convince their current clients to invest more money, or start meeting bigger clients. An advisor has reached critical mass when he/she serves less than 100 millionaire clients per year. It was surprising for me to learn that an advisor succeeds with a few wealthy customers versus many low-budget customers; the explanation the book provides is that less wealthy customers means more time available to develop each relationship. Compared to a generic salesperson, a financial advisor is more of a selective educator who “doesn’t work with everybody”, and takes pride in being able to offer their services to people. After all, who wants to work with clients that don’t take their advice, don’t benefit from it, and can’t rave about the advisor later? I believe this selective approach for clients can apply to any field and any industry.

You might be wondering how advisors find wealthy clients. Millionaires tend to find their advisors through professional referral networks; i.e. through their CPA or lawyer. Financial advisors should spend an average of 18 months building a professinal relationship with every new CPA they meet. Usually the financial advisor discovers a few areas of the CPA’s practice that he/she can strengthen, and proceeds to collaborate on client projects together. The CPA has to be convinced that if he/she refers any clients to the advisor, the advisor will provide their clients excellent service and strengthen the CPA’s reputation.

Another way is for financial advisors to serve on the board of a nonprofit they care about, and usually this requires an upfront investment of $10 000 or more. They would demonstrate their financial expertise on the board and develop organic relationships with the other board members, who are often
wealthy people. Because of their common interests and goals, and because the advisor has earned the trust and respect of the other members, they can transition from a working relationship to a business relationship with little difficulty.

The most important thing that struck me in the book was that a financial advisor is proactive about caring for their clients and will always put their clients first. With financial advice, if a client is not convinced that an advisor is acting in their best interest, the client will no longer do business with the advisor. A top advisor will sacrifice short-term business if that means the client will benefit in the long-run, and is willing to make minor discounts and cuts to their price (a percentage of assets) if that means that the client’s needs are met. This is especially if the client shows promise of being a bigger client in the future. Remember, a client can switch to any other advisor at any time.

When they first start out, ambitious financial advisors work all weekends, including Easter weekends. They choose to either study the markets, learn more professional skills, or to go canoeing, fishing, golfing, and more with their current and prospective clients. Let’s all learn from their work ethic and hustle hard in building great careers. Some of the top advisors interviewed in the book did not receive any kind of financial education in university, yet they climbed up from the bottom – and so can you, whether it is financial advisory or another profession.