Yield of Dreams

Military Experience a Plus When Choosing an Advisor, or Is It?

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A recent Edward Jones survey of 1,006 Americans found that advisors with military experience can be more appealing to potential clients. (We wrote about it in the May 2012 issue.) But a former advisor, who has military experience, says nothing could be further from the truth.

On his blog—the Alfidi Capital Blog—Anthony Alfidi voices his frustration over the Ed Jones survey, saying that nearly every prospect he encountered ignored his military background as a selling point. Alfidi now runs his own investment research firm.

The Edward Jones survey found that 57 percent of people believe the skills gained in the military are transferable to a career as an FA. Ninety-five percent of Americans said they would work with an advisor who was a veteran primarily for their discipline, goal-orientation and integrity. But Alfidi believes those are the traits that worked against him, and that wealthier investors would not feel the same way. Here’s part of his rant:

People with serious money to invest want it managed by someone who’s achieved a comparable level of success. I find it telling that the Edward Jones survey above mentioned households with incomes of $100K or so.  I hate to break this to the 1300 ex-military advisors they employ, but their careers will be short if they focus on acquiring people at that income level.  Wealth management firms are increasingly discarding advisors who pursue clients with net worth under $1M.  Making $100K/year isn’t going to get anyone to millionaire status in an America beset by price inflation, equity overvaluation, creeping hyperinflation, and a rapacious elite bent on regulatory capture and financial repression.

I employed all of my military-acquired skills to establish trust, build rapport, demonstrate an extreme work ethic, prove my integrity, and persevere in the face of adversity. All of those traits turned off people with serious money. All of those attributes got me terminated. Most veterans hired as financial advisors don’t realize that they’re just filling an affirmative action quota and will be gone in a year. That’s why brokerages can afford to brag that some percent of their sales force is comprised of veterans. They know that annual turnover for lack of production enables them to keep hiring and firing unsuspecting veterans over and over again. Americans who say they want military veterans as financial advisors probably don’t make enough money to afford an advisor in the first place. Too many people just don’t know what they’re talking about.  

Alfidi’s claims are quite bold, and there’s no way to know how accurate they are. I also wish he had expanded on his experience and the nature of his termination from his firm.

And of course, this is just one isolated experience, so it can’t be used to draw any conclusions or paint a broad stroke. After all, 3.8 percent of all financial advisors previously served in the military, including 4.2 percent of IBD/insurance brokers and 3.6 percent of wirehouse advisors, according to Cerulli data from 2011. I don’t think it would be that large if military veterans didn’t make good financial advisors.

But his story does provide a valuable contrarian view on Edward Jones’ survey, and a good reminder that any one characteristic is not the be-all, end-all.

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Casting a gimlet-eye on asset management issues.

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