Raj Sharma’s path toward becoming one of the nation’s top financial advisors was filled with twists and turns.
“I stumbled into this profession by accident,” Sharma says.
Growing up in a middle-class Indian family, Sharma started out as a radio disc jockey in Hyderabad, India. “I thought I was going to be in radio for my entire life.”
Sharma’s dad had different plans. He wanted his son to get an MBA and become a banker. “Of course, I didn’t listen – at first,” Sharma writes in a soon-to-be-released book titled, “The Purposeful Wealth Advisor: How to Build a Rewarding Career While Helping Clients Achieve Their Dreams” (Amplify Publishing, $30).
At 31, Sharma joined Merrill Lynch in August 1987 after being rejected by several other firms. Sharma’s timing could not have been worse. Two months later, the stock market suffered its Black Monday October crash; the Dow Jones Industrial Average dropped 22.6% in a single day.
As the new guy in the office, Sharma was put to work answering the phone for senior brokers. “Clients were calling all day panicking,” Sharma writes.
In the decades that followed, Sharma rose to become one of the foremost wealth advisors in the country, recognized by Forbes/SHOOK and other publications.
So what possessed Sharma to write a book? “I give talks to younger advisors and they don’t have a handbook. It is very painful for me to see smart, young people get in the business, get discouraged and six months later they are gone.”
“It is not an exaggeration to say that my work has given meaning and purpose to my life,” Sharma writes, noting that the book’s net proceeds will be donated to non-profit financial planning organizations dedicated to serving low-income families.
In the breezy 248-page narrative, Sharma shares his insights, mistakes and best practices.
Some of Sharma’s advice is common sense: Be prepared to work hard. When speaking to clients listen intently. Wait until they have finished speaking. Treat people with respect. But Sharma also offers valuable advice, namely: develop a positive outlook.
“Optimism does not mean I am unrealistic or Pollyannaish or that I overlook challenges. Optimism is a way of looking at life through the prism of positive expectations,” Sharma writes.
The role of an advisor has changed markedly since Sharma started in the business. Advisors used to be brokers who traded stocks and collected a commission on each sale. Today, advisors are paid a management fee (typically 1% of assets) and they have much greater responsibility beyond selling stocks and bonds. Clients seem to keep asking advisors to do more.
Beyond financial planning and portfolio management, many advisors are involved in estate planning, financing the purchase/sale of homes, helping clients set aside money so their children can attend college, and offering tax advice related to the sale of a business.
Sharma urges young advisors to find a mentor and develop a sense of purpose and direction. His mentor at Merrill was Augie Cenname, who Sharma credits with teaching him the importance of putting clients’ needs first. Keeping a “sense of purpose in mind helps guide the details of what you choose to do and not to do,” Sharma writes.
Individuals interested in becoming a financial advisor do not need to be a math wizard, have an Ivy League degree or an MBA. In fact, Sharma finds psychology majors often make the best advisors. Top advisors are individuals who have a high degree of “emotional intelligence,” they exhibit empathy and a self-awareness of the emotions of the people around them, Sharma writes.
“Being a great advisor is all about understanding clients’ hopes, dreams and fears. It is about asking good questions and pushing people to think more deeply about their life goals,” Sharma writes.
Some of the book’s passages offer a perspective on how the financial advice business is being reshaped by demographics, technology and an aging population.
The profession is currently tilted toward older, white men with 44% of registered investment advisors being 60 or older, according to a paper published jointly by Focus Financial and J.P. Morgan. As advisors retire, firms are having difficulty recruiting replacements.
Why? Wealth management has taken a backseat to other professions that are perceived to offer better growth and pay opportunities. And among those who do enter the field, 80% leave within five years. “The industry has not done a good job of promoting wealth management as a career,” Sharma said in a personal interview.
Sharma’s book is a call to action for younger professionals, particularly women and minorities, to enter the field. Women make up about 21% while 23% are persons-of-color, including 4.5% who are Black and 9% Latino, according to Sharma’s book.
Sharma argues that the need for financial advice has never been greater. There is a generational shift occurring with baby boomers, which control half of all wealth. Boomers will transfer $68 trillion to succeeding generations over the next several decades.
The profession needs new blood to replace retiring advisors and to cater to a different, emerging audience seeking financial advice. Younger generations want to be represented by younger advisors, advisors of color and advisors who women, Sharma writes.
Sharma says there is a great demand for financial literacy. Only about 40% of Americans have a budget or keep track of their spending. Basic life skills like budgeting, saving and investing aren’t taught in schools.
People need advice, education and financial planning. All these services are offered by financial advisors, Sharma said in an interview, adding that “the opportunities in this business have never been brighter.”
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