The job goes by a lot of names, including financial planner, financial advisor and personal financial consultant, but it's rarely called what it typically is: financial products sales. Financial planners earn a living by helping people sort through and choose investments, insurance and other financial products. They do retirement planning, college funding, estate planning and general investment analysis.
Obtaining New Business
Finding clients who need those services and building a customer base is crucial to experiencing success as a financial planner, because referrals from satisfied clients are an important source of new business. Whether you find new clients by giving seminars or lectures, through social or business contacts or simply by cold calling, find them you must.
Having a broad social network is one reason that many successful financial planners enter the field after working in a related occupation such as accountant, auditor, insurance sales agent, lawyer or securities, commodities and financial services sales agent.
What Education Will Lead to Employment?
Financial planning employers look for candidates with a bachelor's degree in accounting, finance, economics, business, mathematics or law. Courses in investments, taxes, estate planning and risk management are also helpful. Programs in financial planning are becoming more widely available in colleges and universities.
Financial analysts may also seek the Certified Financial Planner® (CFP®), the Chartered Financial Analyst (CFA) and the Chartered Financial Consultant (ChFC) designations.
Generally, a license is not required to work as a personal financial advisor, but advisors who sell stocks, bonds, mutual funds or insurance may need licenses such as the Series 6, 7, or 63. These exams are administered by the Financial Industry Regulatory Authority (FINRA, formerly the NASD) and in order to take most of these exams, sponsorship by a member firm or self-regulatory organization is required.
Where do Advisors Work?
More than half of all financial advisors work for finance and insurance companies, including securities and commodity brokers, banks, insurance carriers and financial investment firms. However, four out of 10 personal financial advisors are self-employed, operating small investment advisory firms, usually in urban areas.
According to the Bureau of Labor Statistics, the overall employment of financial analysts and personal financial advisors is expected to increase faster than the average (by 27% or more) for all occupations through 2014. This is a result of the increased investment by businesses and individuals, the rising number of self-directed retirement plans and the growing number of seniors. Personal financial advisors will benefit even more than financial analysts as baby boomers save for retirement and as a better-educated and wealthier population requires investment advice. In addition, people are living longer and must plan to finance more years of retirement.
Is Financial Planning the Right Career for You?
Take this quiz to help you find out:
|Quiz: Is Financial Planning Right For You?|
If you answered mostly As, then financial planning could be the right career for you. You're energized, not terrified, by the idea of earning a substantial amount of your compensation through commissions. If you have the right connections and the energy level to work that network, you could succeed in this tough career.
If you answered mostly Bs, then you need a back-up plan. Financial planning might work, but you're likely to end up among the 80% of planners who, according to William F. Cole's "The Complete Financial Advisor," are in the business for less than five years. When sales don't work out, what will you do next and how will you sell yourself to your next employer?
If you answered mostly Cs, don't even think about financial planning. If you love the portfolio analysis side, consider working as a financial analyst. If math is your strong subject, go into financial engineering or quantitative analysis. You'll make more money without having to sell all day long.
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