After working so many years helping out junior stock and insurance brokers to join the financial jobs industry, we will explain in this FAQs page briefly and clearly the main differences of the 2 roles, Financial Advisor vs Insurance Agent.
Some people can instinctively recognize that they were born to be salespeople. Their interpersonal and salesmanship skills can bring them great success into the financial industry; in this article, we’ll consider some of the pros and cons of each position, in order to let you decide what is more lucrative and rewarding: Financial Advisor vs Insurance Agent?
BROKER
- Depending on the firm, many stockbroker jobs and financial advisor jobs can provide very good commissions, which will lead the high performing professionals to a good lifestyle.
- As we’ve been explaining in our Tips & considerations regarding financial planning jobs, It may take many years for a broker or a financial advisor to build up a substantial client base and to have a large sum of money under management. However, once a broker has built up a formidable base of business, he or she may be able to live off of the commissions that are generated, simply from servicing existing client accounts.
- Brokers and financial advisors often sell many different products, from stocks, bonds, convertible debt and options, to wrap accounts and futures contracts to people of all age groups and socioeconomic statuses, meeting all the varying needs of either the conservative and the risk-averse clients.
- On the cons side, stock brokers and financial advisors are also under an enormous amount of pressure to perform. In fact, stress is a major reason why many brokers tend to burn out of the profession within their first few years of employment.
INSURANCE REPRESENTATIVE
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- One of the biggest benefits of being an insurance representative is that every year when a client pays his or her renewal premium, the representative receives a renewal commission. These renewals add up over the years, particularly as the representative garners more and more clients. Over time, they can mean big (almost guaranteed money) for the representative each and every year, almost like an annuity!
- People tend to be more loyal to a good insurance representative than they are to a stockbroker because the insurance representative is protecting them in case of a disaster, whereas a broker’s job is to let the client make more money and unfortunately there are higher chances for a broker to lose a client’s money than an insurance representative.
- On the cons side, some obstacles, like the client not meeting or willing to be checked for some health standards, can prevent an insurance representative from receiving his or her commission, while as soon as a client pays for a purchased stock, a commission is paid straight to the broker.
- Most insurance companies offer only a few products, i.e. health insurance, whole life insurance, term life insurance and variable life insurance, while the advisor generally has the option to sell shares or debt instruments of literally thousands of public companies.
- Insurance representatives usually book their appointments in the evening when people are home from work: this is a major source of burnout, especially with young families at home.
When determining which is best for you between insurance broker vs stock broker, consider which of your temperament features and preferred lifestyle will make a good fit in either profession. However, keep in mind that your choice of career does not have to be completely final. The education and experience you will gain from each of the two professions will be precious and transferable into the other.