Quora Answer: Why are Some Financial Consultants Not Rich?

The following is my answer to a Quora question: “How come financial consultants are not rich?” 

Financial advisory is a career, and everybody has to start somewhere.  That being said, “rich” is a relative term.  In finance, we have specific definitions for mass affluent, high net worth, very high net worth, and ultra-high net worth.  There are categories of “rich”.  Eventually, those who do stay on in the finance industry, and do well, get rich.  The thing is, many of us who deal with wealthy clients, learn from them as well, and understand the value of not flaunting wealth.  It invites unnecessary scrutiny and tax audits. 

That being said, I personally know of people in this industry who were once wealthy, and then lost it all, to fall back into the middle class, or worse.  One of them was caught laundering money, and the fines and asset seizures stripped him of almost everything.  Another had the misfortune of running afoul with compliance due to paperwork issues, and lost her license. 

Big money also brings big risks.  This is why I qualify my potential clients and do not take some characters on as clients even when they are willing to throw tens of millions my way.  Once you have a reputation of being good at fund and portfolio management, there will be this temptation of all manner of dubious characters who need “help” with their funds.  Successful financial consultants become poor because they give in to this temptation, and the law eventually always catches up.  I am quite happy with the air outside prison.