Before telling you how to become a financial advisor, let us give you a brief intro to the topic.
A financial advisor is someone who provides financial planning and advice to his or her clients. A Financial advisor is a wide term, do not confuse a financial advisor with a broker. A broker is simply someone who deals with your interest in stocks. Although a financial advisor also does so, he or she can help you tackle all your financial problems.
Think of a financial advisor as your all-in-one financial tool. A financial advisor helps you achieve all your financial goals and desires. Let us take a look at some topics a financial advisor can help you with.
1. Investment Strategies
2. Tax Management
3. Debt Management
4. Wealth Management
5. Retirement Planning
Now, when you have a basic idea of who a financial advisor is, let’s get back to our topic “ how long does it take to become a financial advisor?”.
There is no single way to become a financial advisor and depending on your approach, becoming a financial advisor can take anywhere between 6-8 years. These years include pursuing a bachelor’s degree. So, if you already have a bachelor’s degree, you can become a financial advisor in 2-5 years
Don’t get excited right now, becoming a financial advisor is not a piece of cake. Although you can become a financial advisor in 3 or 4 years, to earn well you need a lot of experience in the field which does not come in months.
Before we tell you “how to become a financial advisor?”, first let’s answer some common questions related to this carrier.
Should I become a financial advisor?
Although choosing a carrier is your personal choice, there are some signs that a financial advisor can be your dream job.
1. You are social, you like meeting new people and interacting with them.
2. You have amazing communication skills, you can impress people just by communicating with them.
3. You have a knack of convincing people and you like helping others.
4. You are looking for a job that challenges you every day and you have to solve problems using your skills.
5. You love learning and growing, you can handle lots of information at once without getting bogged down.
6. You are consistent in your work, you are good at analyzing situations, and then come up with an analytical view.
Even if your answer is “Yes” to many of these statements, being a financial advisor takes much more. But if you are determined enough you can be one.
Why should I become a financial advisor?
• High-Income potential- When starting as a financial advisor, you may struggle to even put food on the table, but as you grow there are no limits. Once you grow and experience in the field, you can have your salary in six figures.
• Flexibility Schedule- This may not be true if you work under a firm or company, but if you work as an independent financial advisor you have no boss. You can work any time and the closest thing you can have to a boss is your client.
• High demand in the future- According to a report by Bureau of Labor Statistics, the employment rate of financial advisors and financial analysts amid 2018 and 2028 is expected to increase 7% faster when compared to other occupations.
• Carrier full of challenges- Many people want something challenging every day and when you are a financial advisor, every day is different and full of challenges. So, financial advisors do not get bored at work.
Now let’s see how you can become a financial advisor.
Financial Advisor school
Although there is no strict approach to become a financial advisor, having a bachelor’s degree is a must and for that, you have to go to a school.
So, yes, to become a financial advisor you have to go to a school. Interested individuals can pursue their bachelor’s degrees in any of the following fields.
Even though you can start looking for a job after pursuing a bachelor’s degree by joining a firm or company, to grow as a financial advisor you have to pursue some certifications and licenses.
The next step after getting a bachelor’s degree is to either continue your education or get certifications.
Continuing education can be a good way to advance your knowledge. Taking classes on topics like financial planning, risk control or estate management will not only help you in getting knowledge, but it will so help you in diversifying your carriers.
Prospective financial advisors can either remain generalists or specialize in one field. For instance, those who want to specialize in tax management or debt management can pursue respective courses to grow in that field. Moreover, if students intend to become self-employed planners, they can pursue courses like marketing and management which will help them to grow their client base.
Although getting a license is not compulsory, if you are going to trade financial products like stocks and bonds in the future, you have to get a license from your state. For instance, advisors who want to specialize in insurances have to register themselves as Registered Investment advisors with their state or SEC ( Securities and Exchange Commission).
A bachelor’s degree and license from the state are enough to start working as an entry-level financial advisor but to progress in the carrier you have to get more certifications or get a master’s degree. These certifications generally require specialized training, an exam, and continuing education.
The next most important step in becoming a financial advisor would be to get a job at a firm or work as an intern. When you are doing your certifications or masters, consider doing a part-time job. Find a job where you can get insights into the financial field and a place where you can apply what you have learned.
Gain a work experience of 3+ years because most of the certifications require you to have an experience of at least 2 years. When working as an intern, you are likely to make minimum to no income, but you will earn plenty in the future. So, this is the time to horn your skills.
Apart from education and licenses, a financial advisor is required to have good communication skills. To impress and attract more clients, you should work on your presentation skills.
The last step in becoming a successful financial advisor is to never stop learning. This is a job where you have no boundaries, learn as much as you can. Update your knowledge regularly, you can not afford to give outdated information to your clients.
Salary of a Financial Advisor
According to a report by U.S. news in 2018, financial advisors made a median salary of $88,890 per annum.
The best-paid 25 percent of financial advisors made an astonishing $157,710 per year whereas the lowest-paid 25 percent made $57,290 per year.
In the same U.S. news report, the job of a financial advisor received an overall score of 6.8/ 10.
5 Top Financial Consultant course
It is tough to progress in the finance field without having reputable credentials. Credentials do not only add credibility to your name, but they also help you advance your knowledge.
The more qualified and certified you are, the more job security you get. Advisors who opt for extra finance certifications generally get paid by up to 15 percent more, when compared with the ones with no certifications. If you wish to specialize in a field, consider pursuing certifications related to your field.
Now, here are the top 5 certifications you can add to your portfolio.
1. CFA (Chartered Financial Analyst) certification
– CFA is arguably the most renowned certification in the industry and for a good reason.
To get this certification, candidates are required to have a bachelor’s degree and at least four years of experience in the industry.
After meeting the requirements candidates have to pass three levels of exams, these exam covers areas like investment management, security analysis, ethics, money management, accounting, and economics. Benefits of having a CFA certification are.
• The time and efforts required to get CFA certified are admired by everyone and hence, having one can increase the prospect of landing a job.
• Unlike some other certifications or degrees, CFA is not unnecessarily costly and it justifies each $ you pay for it.
2. FRM ( Financial Risk Manager) certification
– This leading certification for candidates pursuing risk management is offered by the Global Association of Risk Professionals (GARP).
To obtain this certification, candidates are required to pass a two-part exam and complete at least two years of experience in financial risk management. Benefits of having an FRM certification are.
• Having an FRM certification separates you from most financial advisors.
• Getting an FRM certification allows you to further specialize in a variety of carrier opportunities.
3. CFP ( Certified Financial Planner) certification
– This is a professional certificate course in Financial Planning, provided by the Financial Planning Standards Board (FPSB).
This certification covers all the core subjects in financial planning: investment, insurance, tax, retirement, and estate planning.
To appear for this exam candidates are required to meet two criteria. First, they must have a bachelor’s degree from an accredited college or university. Second, they have to complete a list of specific courses in financial planning. Lastly, candidates must have working experience of 3 years or more. Benefits of having a CFP certification are.
• In a study by the AITE group, financial advisors who had a CFP certification were generating up to 30 percent more earnings when compared to non-CFP financial advisors.
• Having a CFP certification instantly increases your expertise and credibility as a professional advisor.
4. CCP ( Certified credit professional)
– This curriculum offered by the Credit Institute of Canada (CIC) is designed to ensure graduates possess deep knowledge in all areas of credit management. A CCP graduate is a member of the Credit Institute of Canada and is bound by the organization’s code of ethics.
Candidates opting for CCP are required to have at least 5 years of experience in credit management and they have to pass 8 exams covering all areas of credit management. Benefits of having a CCP certificate are.
• Being a Certified credit professional can help you generate additional earnings of up to 12 percent per annum.
• You can explore new job opportunities through the job board of CIC.
5. CIA (Certified Internal Auditors)
– This is a certification offered to accountants who conduct internal audits.
Accountants appearing for CIA designation are required to have at least 2 years of experience and a bachelor’s degree. The Benefits of being a CIA are.
• In a study by IIA in the U.S., advisors who were CIAs earn an average of $38,000 more annually than those without the CIA certification.
• Having a CIA certificate allows you to become: Audit manager, Internal audit director, and risk manager.
Do I have to go to school to become a Financial Consultant?
Although the terms Financial advisor and Financial consultant can be used interchangeably, they are slightly different from each other. A Financial Consultant is typically hired to tackle a specific problem or goal whereas a financial advisor can be hired for multiple jobs: tax management, debt management, financial planning, or wealth management.
Now, let us get back to the question “Do I have to go to school to become a financial consultant?”.
The answer to this question is Yes. Let us explain in detail why?
You can become a financial advisor without having any degree or certification but it will be practically impossible to get a client.
On the other hand, if you work under a firm or a company the minimum requirement to work in a firm or a company is a bachelor’s degree. Hence, to get that bachelor’s degree you have to go to a school. So, if you want to become a financial advisor, the first step is to pursue a bachelor’s degree.