How to Become a Financial Advisor
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Financial advisors combine specialized knowledge, customer service, and sales skills to find clients and help manage their investments, retirement, and more. Financial advisors must stay up to date on regulations and certifications to serve their clients.
Becoming a financial advisor is about more than being good with money. It involves careful planning and attention to detail. Financial advisement is a job in finance that focuses on providing value for clients who trust them with their assets and investments. Starting a career as a financial advisor can be quite lucrative for the right people. But it takes a lot of hard work and persistence to build up a client base.
Prospective financial advisors should ask themselves several key questions to make sure this career path is one they want to settle on. Financial advisors enjoy flexible work schedules and almost unlimited earning potential, but there are cons. The road can be fraught with pitfalls and difficulties, including high stress and burnout — and that is even in a good market.?
Financial Advising Overview
“Both financial planners and advisors aim to provide advice to help better manage your money. However, one focuses more on the bigger picture, while the other looks mostly at investments,” reports Business Insider.
Financial planners help develop personalized financial plans for clients. These include estate planning, saving for kids’ college funds, and preparing for retirement.
Financial advisors help clients who want to manage their assets now. They can do some retirement planning, but financial advisors usually focus more on investments. Financial advising also includes a little bit of sales and self-marketing. Good advisors build strong client relationships. They are comfortable digging into numbers and data.
"A financial advisor is one who is continuously monitoring clients' investments and portfolios and looking out for the client in terms of their financial needs, retirement, etc," Jay Srivatsa, CEO and founder of Future Wealth LLC told Business Insider.
At its core, financial advising is very much a “people-focused” job. If a person is not comfortable talking to a wide range of people each day, it may not be the career for them.?
What Does a Financial Advisor Do?
Financial advisors help their clients make informed decisions about their money. Some financial advisors work in large companies like banks or brokerage firms. Others work in smaller operations or act as self-employed business owners.
Financial advisors often specialize in a field. Some focus their efforts on retirement. Other advisors work with investments. In some cases, a financial advisor may choose to work with clients in a specific net worth or age bracket.
Financial advisors have a huge responsibility to guide their clients’ finances. They can even transform their lives with their advice. Some financial advisors take things a step further and become a fiduciary. Fiduciaries have a legal obligation to act in their clients’ best interests.
A financial advisor’s day-to-day workload differs based on their clients’ needs. The job involves meeting with prospective clients and implementing solutions for existing ones. They ask lots of questions about financial goals. They then provide strategies to make them happen.
When not in client meetings, financial advisors spend their time preparing for them. They also dedicate time to marketing their services. Continuing education to maintain professional licenses is also a priority.?
What are the Educational Requirements to Become a Financial Advisor?
A financial advisor career offers a good amount of flexibility due to its requirements. It requires a bachelor’s degree in any subject and licensing or certifications in a chosen career path.
Required Degrees
A financial advisor’s bachelor’s degree does not have to be in a specific subject area, but it is a good idea to focus on specialties related to finance. Risk management, finance, estate planning, and marketing courses are all recommended.
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Licenses and Certifications
Certified financial planners (CFPs) have more stringent requirements. They must take CFP Board of Standards-approved courses in personal financial planning. Most experts suggest seeking internships with reputable firms. They offer exposure to the job first and can help build the skills required for success.
Depending on where an aspiring financial advisor wants to focus, they will find three different channels to grow their skills. Broker-dealers and large firms are popular choices for many financial advisors. Banks offer another path to becoming established. The final option is to strike out on their own or by joining a small independent firm.
An advisor’s employer and the services they provide dictate needed licenses and certifications. For investment products, FINRA — the Financial Industry Regulatory Authority — requires passing certain exams, including:?
Other licensing exams may be required depending on the products an advisor wants to sell. For example, insurance-related products like annuities will often require a state insurance license for all states the advisor intends to operate.
Financial Advisor Job Outlook
What does the future hold for financial advisors and those who want to become them? According to the U.S. Bureau of Labor Statistics (BLS), growth is projected to be slower than the average for other occupations. That 5% growth stems from job openings as current advisors transfer out of the workforce, either to retire or to move to different occupations.
Interested professionals should not let that stop them, however. Even with the slow growth, personal financial advisors will always be in demand. People need a steady hand to help guide their financial and investment decisions.
Is a Career in Financial Advising Right for You?
It can take as long as seven years to become a certified financial planner when factoring in the time spent earning a degree, studying for and passing the FINRA exams, and obtaining the right on-the-job experience to offer clients the guidance they need.
Before deciding on financial advising as a career path, ask the following questions. If the answers to most of them are “yes,” a financial advisor career might be right:
Ultimately, the decision to become a financial advisor comes down to dedication and the willingness to work hard to build a client base, keep up with regulations and certifications, and provide clients with the right information to make smart financial decisions. For the money-minded, it can be a lucrative career option with plenty of paths ahead.
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How to Become a Financial Advisor
(Reporting by NPD and Mariah Flores)