From the February 2008 issue of Research Magazine • Subscribe!

February 1, 2008

Portrait of a Rookie

At 23, rookie financial advisor Jonathan S. Israel already has his own branch office, a full-time assistant, a couple of bonuses under his belt and, perhaps most important for this Edward Jones second-year FA, a healthy flow of client referrals.

"It's such a compliment hearing, 'My friend [such and such] told me I should be your client.' It really doesn't get better than that," says Israel from his Studio City, Calif., base in Los Angeles' San Fernando Valley.

When we first visited with the tall, young go-getter last August, he'd been selling investments since January, after joining the firm as a trainee in September 2006. By March, he was doing well enough to take over an existing branch office -- in his chosen town -- and in June, profitable enough to hire assistant Kristina.

As we join Israel now, the new FA continues apace on the fast track.

"I was told that I've moved more quickly than most and reached a level of accomplishment in a fairly short amount of time," he notes, referring to Edward Jones' Segment Milestone advancement system. Measured by a combination of new accounts opened, new assets under management and production, Israel's progress from Segment 1 to Segment 2 (out of five segments) has been swift.

Outgoing and industrious, he has been an ideal match with the firm's approach to building a book of clients through face-to-face prospecting: that is, knocking on the doors of neighborhood residents and businesses. For Israel, that means prospecting in Studio City and adjacent upscale Sherman Oaks, both communities rich in entertainment-industry companies and a wide variety of small businesses, especially on lively Ventura Boulevard, where he's located.

What has been a big surprise to him is that door-to-door prospecting does work. "I've realized that door-knocking actually pays off. Most of my referrals have been from clients I've met on their doorsteps," he says.

"Originally, I was unsure about what would happen between my meeting someone at the doorstep and their coming into my office and opening an account. The goal is to make an appointment. I've learned that it's about earning people's trust. If you can do that," says the FA, "then they'll trust you with their money."

Israel's biggest challenge at this juncture? To "keep doing what I'm doing -- hopefully with little improvements here and there. The toughest part of the job still is meeting as many new people as possible," he says. "I need to meet enough to open a certain number of new accounts every month. If they open an account, the rest of the stuff will follow."

Beginning this month, Israel will no longer receive the small salary that, in addition to commissions, he has been earning. From now on, compensation by commission will be all.

This doesn't faze him. "I'd much rather get paid more for working more than not have the incentive to work harder. I was never scared of a hard day's work," says the University of California-San Diego grad, who came to Edward Jones right after earning his bachelor's degree in economics.

It was the inherent excitement of the job that prompted him to opt for financial services. "I never wanted to be doing the same thing every day," he notes.

New 401(k) AccountOne morning last December, a reporter found Israel "swamped," as he succinctly put it. In fact, during the last six months, the FA's in-office busyness with both clients and prospects has increased substantially.

The volatile market hasn't thrown him. In fact, those big fluctuations have been a plus. "It's a good opportunity to talk to prospects about investing and having a plan and sticking to it. My business has grown because of that," says Israel.

He conducts portfolio reviews gratis for prospects who are worried that their current advisors are failing to "keep a close eye on their investments," he says. But should Israel find nothing that needs changing, he wastes no time in being up-front.

"They appreciate my honesty -- and that I've contacted them a lot more often than their own broker," he says.

He has also used the bumpy market to impress upon clients the wisdom of putting additional money into their investments when prices are lower.

"Some clients are a little uneasy about that. But I tell them, 'Let's not get scared. Let's use this as a time to shop around for good investments that might be a little bit cheaper than normal. Remember, this is long-term investing.'

"I'm really particular about sticking to a plan," he continues. "So I like to look for certain investments within a plan that we can add to if the market is low. I can't say I've had to do a whole lot of handholding."

And indeed, the FA has been converting more and more prospects to clients. His biggest ones are long-term individual investors.

Last December he also scored big when he enrolled 20 of 22 employees in a 401(k) plan after explaining the importance of retirement savings and plan benefits at a consulting company's enrollment meeting.

But Israel isn't letting success go to his head. "It feels good to get new clients. If I can help someone and if they trust me, that's really great and I'm glad that my hard day's work has paid off. But I don't do a whole lot of celebrating because the next day is a new day, and the next month is a new month. You can't celebrate forever."

Another fact of business life this grounded young advisor has learned: Everyone "has their own unique trust meter," he says. That's fundamental when trying to set up those all-important initial appointments.

"For some, it's the fourth or fifth time I get back when they agree to a meeting. I've had cases where, in the beginning, I thought they were probably just making excuses -- but now they're clients," says Israel. "I try not to assume that their intentions are anything other than what they say they are -- and that they'll tell me if they don't want to do business with me."

But in these wary times, how welcome is a stranger suddenly showing up on the doorstep?

"I've been invited into homes. Surprisingly enough, it does happen," he notes. Most of the time, however, he generates a brief chat at the door, either introducing himself or following up with an investment opportunity in which a previously contacted prospect may be interested.

With the fast development of his burgeoning practice, Israel's routine has changed. For one, he works six days a week now instead of seven, reserving one weekend day for clients and prospects unable to make it in Monday through Friday.

A Juggling ActBy now, Israel has clients who are due for an annual portfolio review. To be sure, they are scheduled accordingly. "My biggest requirement with all my clients is that they meet with me every year so that we can review their diversification," the FA says.

During the week, he manages to leave the office by 6:30 p.m. -- after putting in 11 hours. But he still lugs home loads of investment and new-product material to pore over. ("I used to love reading fiction. I hope to start again!")

Perhaps the biggest shift is the greater amount of time Israel must spend in the office versus knocking on doors.

This is certainly a juggling act because, after all, the FA's chief goal is to meet as many new people as possible. Door-knocking, though, must yield to the need to serve existing clients and meet in-office with prospects.

Doing more business is of course "a good thing," says Israel -- particularly because the progression from one Edward Jones segment to another is largely based on production level. "I'm always looking at my production so I can move up as quickly as I can."

It is Israel's production that, requisite to running a profitable branch, has chiefly helped him earn those bonuses.

"Edward Jones rewards you with bonuses on certain milestones, based on your performance," he explains. "You have to be above your own personal standard that was set for you. Everyone has their own individual milestones."

Apart from door-to-door visits, another prospecting tack that's worked for the personable Israel is conducting seminars. He holds them at clubs and organizations. "I love doing seminars. I was never really shy. When it comes to the attention, I soak it up. Maybe one day I'll be a politician," he cracks.

This year, he plans to hold tax-planning seminars for clients and their friends in his office. Also, he's hoping to give a talk to the Rotary Club members with whom he lunches once a week at the Sportsmen's Lodge, a fancy landmark restaurant complex close by his office.

"I don't think of the Rotary as a referral network," he says. "I've gotten business from it, but those weren't my intentions."

What hasn't worked for Israel, when it comes to prospecting, is the semi-mass mailing he sent out early on. "It wasn't effective. I don't think people value mailers as highly as they do face-to-face contact -- and that's what we're all about," he says.

You won't find phone cold-calling on his to-do list either. "It's funny, I can't get the guts to cold-call someone on the phone, but I can knock on the door," he says with a laugh.

As a beginning FA, his biggest shock has been the tremendous number of folks who are ill-prepared financially for retirement. "There's a lot of need out there for people to work with advisors. They don't know how to prepare. Everyone says they wish they had started when they were 20. It's really hard to catch up," he says.

Israel himself has "taken that to heart" and even as he's just kicking off his career, is already investing for retirement. "I realize the benefit of starting this early. I wish I could get people who are [as young as] 25 to think about retirement."

Along similar lines, the advisor will this year strongly recommend long-term care insurance to clients. "It's something I'm passionate about. Health-care cost is growing even faster than inflation. The biggest risk to retirement is something happening to a person's health. Their retirement can be gone in a flash."

For all his successes, Israel does have the occasional discouraging day. "Sometimes you talk to more people who say 'no' than 'yes.' But you have to remember that it's not personal," he says. "I don't like to dwell on negatives."

Still, at such times, he often rings up Andrew, his Edward Jones volunteer mentor, based not far away in Los Angeles. "I ask him mostly his opinion on overcoming objections with prospective clients," he says.

Apart from Andrew, Israel finds support in meeting monthly with other new Edward Jones FAs in his region. There is good camaraderie in the group of eight to 10 rookies.

"We pump each other up. We ask each other questions if we're having a problem or feeling down," he says. "It's really great."

So, now that Israel is well into his second year as an advisor, what crucial advice can he offer brand-new trainees?

He says: "Work hard, work long hours, and be pleasantly persistent. Being pleasantly persistent has paid off a lot for me. I don't write people off after one or two visits. An objection is not always a rejection."

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Freelance writer Jane Wollman Rusoff is a Los Angeles-based contributing editor of Research and is the founder of Family Star Productions.

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