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How To Become A Financial Advisor – Forbes Advisor

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Financial advisors provide individuals and companies with guidance on topics like mortgages, estate planning, investments and retirement. They take a big-picture view of clients’ income and expenses to help plan for budgeting goals related to significant life events, such as higher education, marriage and retirement.

Although some financial advisors report that their work can be stressful, these professionals earn relatively high salaries and enjoy an encouraging job outlook. This guide explores how to become a financial advisor, including requirements for education, experience and license.

What Is a Financial Advisor?

Financial advisors help clients meet short-term and long-term financial goals through careful consideration of clients’ income, liabilities, investments and expenses. These professionals interact with clients of all income levels to assist with a broad range of goals, such as making timely mortgage payments or taking on significant expenses like higher education.

Financial advisors assess their clients’ financial health to understand their liabilities and risk level in meeting financial goals. Advisors then use this analysis to forecast trends and funding availability.

Responsibilities

Day-to-day job duties for financial advisors may vary based on their chosen client base. When working with individuals or families, these advisors help prepare for events like marriage, retirement, attending college and having children. Financial advisors also educate their clients in areas like budgeting, taxes and insurance.

When working with organizations, financial advisors typically handle investment portfolios. They help companies raise funds through stocks, bonds and other investments. Financial advisors also monitor accounts to stay up to date on any changes, making adjustments and suggestions as necessary.

Salary and Job Outlook

The US Bureau of Labor Statistics (BLS) reports that financial advisors earn a median annual salary of $94,170—nearly $50,000 more than the median for all occupations. According to the BLS, the lowest-earning 10% of financial advisors make under $47,450, which is still higher than the national median salary of $45,760 across all occupations.

The BLS projects employment for financial advisors to grow by 15% from 2021-2031, which is three times the average projected growth for all occupations nationwide.

Skills for Financial Advisors

An individual should possess the following key skills if they plan to become a financial advisor.

Analytical Skills

Financial advisors analyze large data sets from multiple sources and draw conclusions from their findings. Along with hard numbers, these professionals must assess ongoing trends and economic shifts to identify the best pathways for their clients.

Communication Skills

Financial advisors deliver complex information to stakeholders who may not have familiarity with technical terms. Communication skills are key in providing findings and guidance in a clear, easily understandable way.

Interpersonal Skills

Finances can present stressful situations for clients. As such, personal advisors must be honest, trustworthy listeners and speakers who project confidence in their advice.

Math Skills

Perhaps above all, financial advisors must have strong math skills so they can present accurate data to their clients.

Sales Skills

Although financial advisors often find full-time employment within organizations, many work independently as consultants and contractors. Self-employed financial advisors must know how to market themselves to grow their client base.

How to Become a Financial Advisor

Earn a Bachelor’s Degree

Hiring managers typically seek financial advisors with business administration bachelor’s degrees or undergraduate degrees in other subjects like mathematics or social science. Bachelor’s programs generally take four years to complete, although some schools offer accelerated options. Some employers require master’s-level education for more advanced roles.

Gain Experience

To develop experience, current students and recent graduates can seek internships with finance companies. Entry-level financial advisors receive on-the-job training from senior-level professionals in areas like creating portfolios and networking with clients. Developing familiarity and mastery of financial advisory tasks is key to advancing in the field.

Obtain Any Necessary Licenses

Depending on their line of work, financial advisors may need specific licenses for professional practice. For example, professionals who offer advice on certain investments or who buy and sell stocks for clients must earn securities licenses. When researching a specific line of financial advisory work, make sure to consider any necessary licenses that career path might entail.

How to Become a Certified Financial Planner

Certified Financial Planners (CFPs)® typically complete several years of professional experience as financial advisors before pursuing formal CFP credentials. While the term “financial advisor” covers a broad array of professionals, CFPs perform more specific tasks for their clients. CFPs have also completed additional education to further their mastery of the finance field.

Complete Education Requirements

Along with earning a bachelor’s degree, each prospective CFP must complete specific college-level coursework. Individuals can often take these classes at their current institutions as part of a bachelor’s program. Alternatively, certain professional credentials can fulfill these requirements.

Complete Required Work Experience

To qualify for CFP credentials, a candidate must have 6,000 hours of relevant professional experience, which amounts to about two years of work. Alternatively, a candidate may complete 4,000 hours of supervised apprenticeship work, which must meet more stringent content requirements.

Pass the CFP exam

The CFP certification exam entails 170 multiple-choice questions, split into two three-hour sections. As of 2022, the CFP Board reports a 66% pass rate for this exam. Experts suggest that each candidate should spend about 250 hours preparing for the exam.

Frequently Asked Questions (FAQs) About How to Become a Financial Advisor

How many years does it take to become a financial planner?

At a minimum, it takes about six years to become a certified financial planner. Along with earning a bachelor’s degree, CFPs must have about two years of professional experience and pass an exam.

How do I become a financial advisor?

To become a financial advisor, start by earning a bachelor’s degree in business, social science, statistics or mathematics. Completing an internship while earning your degree can help you network with potential employers.


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