All worthwhile endeavors require a solid understanding of the advantages and potential pitfalls. Becoming a bank financial advisor is no exception. My experiences have been fulfilling, both personally and professionally, in ways that extend beyond financial compensation. Here are a few of the positives and negatives of a career as a bank advisor.

Let’s begin with the positive:

1. Accessibility to customers and referrals. This is probably the number-one reason advisors choose to work in banks. The idea of accessibility to potential clients can make advisors giddy with excitement, particularly if they have slugged it out in a non-bank environment for a while. Finding new customers to fill a book of business can be competitive, grueling work. Lack of trust in the financial sector further complicates the issue. One Bernie Madoff spoils the whole barrel and unfortunately there have been plenty of “Bernies” in the field. Fortunately, this is where banks can transcend the tarnished image. Community banks typically have a solid rapport in their communities and advisors can leverage that relationship. And although large banks have been scrutinized in the press lately, their perceived additional oversight and vast size also make them an attractive choice for the skeptical customer. The smart advisor utilizes the banks name, reputation and regulatory oversight to their advantage.

2. The support structure available to the advisor. When you talk to an independent advisor who runs his or her own business, you’ll hear about all the costs and hassles associated with operating a company. The computer acts up and you either learn to fix it or hire a specialist. Snow on the walkway? Get your boots on, it’s time to shovel! Bills to pay, payrolls to be met, taxes due….and yes, somewhere in your day you need to market, find new business, service your current clients and tend to the things that bring money in the door. Becoming an entrepreneur is not for everyone. Some people prefer to focus on the task at hand for which they have been trained. The bank provides the perfect environment for these types of advisors. After the bank acquired my business, we were in operational heaven! The computers were set-up, functional, updated and tended to by a responsive IT department. No more writing payroll checks, depositing taxes, and writing checks; all covered by the Human Resources and cashiering departments. The offices are cleaned daily and inclement weather is handled by the contracted staff. Need to round up marketing materials or put together a seminar? No problem, visit with the friendly folks in the marketing department. So, what’s left for you to do? Nothing but develop relationships and concentrating on customers.

3. Social interaction and camaraderie. Banks tend to hire across a wide range of ages from the young adults right out of high school to the older baby boomers and every XY&Z generation in between. Bank employees cross over every social group and financial level from the new family just getting started to the wealthy retiree looking to stay busy. Typically, banks are heavily involved in their communities, sponsoring community events which broaden the advisors access to businesses and influential people they otherwise would not come in contact with. Banks, by nature are community hubs. Leveraging that access is a huge positive for the bank advisor.


Now let’s take a look a couple of drawbacks to the profession.

1. You do not build a business (asset) that you can sell to fund your retirement. The accounts you open are the banks accounts, not yours. Should you leave the banks employ, the accounts remain with the bank and a well drafted employment agreement and non-compete clause are standard in the industry. If the bank offers a retirement plan with a healthy “match” or an ESOP, this could soften the impact at retirement assuming you remain at the bank long enough to satisfy the vesting requirements. Of course, the value is in the plan match or stock granted by the bank for employment. Supposing you start your own firm, you would most likely implement some type of retirement plan to defer taxes and save for retirement. You would also build value with the accounts that you manage. Run the numbers and see what works best for you. Building a practice takes time and effort, but each account builds future value.

2. Compensation Plans. Compensation plans can be a virtual minefield waiting to blow up with unmet expectations unless well thought out in advance by banks management and the advisor. Advisors could potentially earn more than the banks senior managers (and many do) causing ill will and resentment. The list of potential compensation plans is only limited by the imagination. Salary plus commission, salary plus bonus for goals obtained, commission only, salary only and everything in between have been attempted at one time or another

3. Compliance, Audit and Regulatory Oversight. Bank advisers can fall under multiple regulatory agencies and the list can be extensive; The Office of the Comptroller of the Currency (OCC), Financial Industry Regulatory Authority (FINRA, potentially the Securities and Exchange Commission (SEC), internal bank auditors and external bank auditors. As a bank employee, you are required to complete the banks continuing education. Couple these requirements along with your securities and insurance continuing education, professional designation continuing education and the demands of audits and examinations and this becomes both time consuming and aggravating. It takes a well-organized and disciplined individual (and department) to manage the demands of compliance while building and growing your client base. Sure, some of the compliance demands can be delegated to an assistant, but inevitably the advisor is responsible and it can be a heavy burden when exams go badly. Many of the requirements between securities and banks are redundant, but all consider themselves your “priority” and all consume valuable time. Consider your willingness to manage this issue carefully before entering the bank environment

4. Cultural differences. Cultures are vastly different between financial advisers and bankers. About the only similarity between them is that they both work with money. The investment department in a bank is typically not the largest source of income for the institution and, therefore, is not a high priority. Banks earn their main income from loans, plain and simple. Banks do not understand the unique challenges of the financial advisor and nor do they care (They are after all, a bank, not a securities firm). I have heard multiple stories of banks purchasing advisory firms only to have them purchased back by the owner due to the inability to integrate into the bank culture. Make sure you have an advocate for the department (preferably the CEO and the board) and be prepared to continually communicate your message as to what you do and how you do it.

Becoming a bank advisor can provide a rewarding and fulfilling career. The transition from an independent firm or a wirehouse can be tricky and expectations on both sides are best addressed upfront. Just remember the words of motivational speaker Earl Nightingale: “Wherever there is danger, there lurks opportunity; whenever there is opportunity, there lurks danger. The two are inseparable. They go together.”

John Brunett, CFP, is the Chief Trust and Investment Officer at Los Alamos National Bank. He can be reached at

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