Why Lawyers Make Great Financial Advisors

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

A legal background is an extremely useful resource for a career in wealth management.

Becoming a financial advisor is a daunting career step after serving as a lawyer. The challenge of having to build your own business and the uncertainty of making a salary are common concerns for advisors just starting out.

These two factors alone are enough to dissuade most from embarking on what could be a successful career path. Furthermore, success in the industry depends on a strong desire to help people, a passion for the markets and a very healthy dose of entrepreneurial spirit. All this proves that the one must have many, multi-faceted talents in order to be a success in the wealth management industry.

There are many different career backgrounds that can pave the way to being a successful financial manager, but the practice of law prepares an aspiring financial advisor better than most others to give meaningful advice to clients. Below are two examples, based on my own experiences as a practicing attorney-turned financial advisor that illustrate the value a legal background adds to a career in wealth management.

Example 1: Preventing potential intra-family disputes

One scenario in which my background as an attorney was impactful concerned an entire family that lives on the Southeastern coast of the United States. The matriarch and patriarch of the family, who are both in their late 70s, had unfortunately not saved for retirement and did not have much in liquid net worth beyond the $9 million beachside home that they owned, which came with a $1 million mortgage. The next generation included three children, two of whom were also my wealth management clients. One member of this next generation had been lending the parents significant cash flow so that they could live, because the matriarch and patriarch were unable to refinance their loan and take any cash out of the property as they had no income or assets outside of the property itself. The matriarch and patriarch were also reluctant to sell the property as they wanted their children to receive the “step-up” in cost basis for tax purposes on the real estate after they were deceased.