Financial advisors help clients make decisions about how they should invest their money to achieve their short and long-term financial goals. Advisors may construct plans that include investments, insurance, savings, estate planning, taxes, buying a home, paying for the children’s education, and retirement. They also help clients to periodically reevaluate their plan based on their current and future goals. As part of this service, financial advisors will educate their clients to understand various financial areas.
Education and Qualifications
Though there is no specific course requirement, most choose the following:
- Bachelor’s degree in finance, economics, accounting, etc.
- Master’s degree in finance or business administration
- Financial advisor license to sell stocks, mutual funds, bonds, options, futures, etc. Based on the type of investment, the financial advisor may need licenses like Series 6, Series 7, Series 63, etc. and might have to register with the state or SEC.
Many advisors choose to earn the Certified Financial Planner (CFP) credential; others choose to pursue Chartered Financial Analyst (CFA) certification. These certifications not only require passing an exam but also require a certain number of hours of experience. All these have continuing education and ongoing certifications as well.
Responsibilities
- Conducting market research and analysis to understand investment markets
- Recruiting clients through advertising, cold calling, financial planning seminars, etc.
- Assessing a client’s financial situation, needs, and financial goals
- Advising and educating clients about various options
- Devising a plan
- Executing the plan
- Monitoring progress and meeting with clients periodically
- Complying with regulations
A Day in the Life
Financial advisors spend a considerable amount of time in the office and usually work standard business hours. Sometimes they may be required to work weekends or weekday nights to accommodate a client’s demands. Their day will be spent in the following:
- Performing market research and data analysis
- Meeting with the client
- Documenting all interactions and transactions
- Checking emails and responding
- Attending seminars, conferences, workshops
- Typically, this job involves little travel, unless the clients are spread in various cities.
Other Necessary Skills
- Analytical thinking to track past data and project future performances of stocks, bonds, etc.
- Good listening and communication skills to deal with clients
- Marketing and Sales skills to expand the client base
- Math skills
Career Progression
As certification programs like CFP or CFA require work experience, most will start working as a junior in a financial firm under the supervision of an experienced financial advisor. Typical career progression could be as follows:
- Analyst –> Associate Advisor –> Senior Advisor –> Partner
- Junior financial advisor –> Financial Advisor –> Branch Manager –> Regional Manager
After a few years of experience, some start their own firms and build a client base
Salary
Median pay: $95K per year
Associate or Junior Advisor: $65K
Senior Advisor/ Branch Manager: $65K to $130K
Partner/Regional Manager: $80K to $400K
Job Growth
Number of jobs: 275K in 2020
Outlook: growing at 5% per year which is slower than average
About 12K jobs expected in the next 10 years.
Summary
If you are interested in doing market research and interacting with clients to help them achieve their financial goals and are good with numbers, you may want to consider this profession. While the median income is about $95K, there is always the potential to make more. If you do not want to work for a large or medium-sized firm, after a few years of experience you can become an independent financial advisor.
The profession does come with some drawbacks though. Initially, it may be challenging to build a client base. Once you manage to build a client base, the job does have its fair share of stress because you are constantly trying to meet the financial goals of hundreds of clients. And you need to constantly educate yourself to maintain licenses and keep up with regulations and compliance requirements. However, these are some features that you must deal with across many types of professions.
