Financial advisors are among the most important workers in the financial services industry. They help both individuals and institutions manage their money and set themselves up for a secure financial future. Not just anyone can become a financial advisor, though. It takes a lot of work, including training, exams and certifications, to prove that you know your stuff when it comes to matters of personal finance. If you want to be a financial advisor, make sure you know what you are in for and that you’re prepared for the path towards this career. If you are looking for a financial advisor who has adequately followed the path already, considering finding one with SmartAsset’s free financial advisor matching service.
Financial Advisor Career Path Step 1: Formal Education
Before you think about any specialized financial degrees or certifications, you’ll need to attend a four-year college and get a bachelor’s degree. There isn’t a particular major or area of focus you need to pick, but there are certainly some areas of study that will better prepare you for a future career as a financial advisor. Economics, business and math are all potentially good choices. Other options include psychology, philosophy, sociology or political science. If you choose one of these, make sure you also take some economics and finance classes.
Some people also go on to get a Master of Business Administration as part of their education. While this is not a necessary step, it certainly can’t hurt. An MBA might be especially useful if you want to form your own firm rather than joining an established firm. Founding your own firm requires not only advisory expertise but also the ability to run your business and manage a team, which an MBA can help you learn to do.
Financial Advisor Career Path Step 2: Work Experience
Once you have your bachelor’s degree, you’ll need to get some work experience. There are a number of ways you can go about this. Here are some possible jobs you could get right out of college if you want to become a financial advisor :
- A junior position at a big advisory firm: The biggest financial institutions are popular spots for recent college graduates to get their first real jobs, including in the advisory portion of the company. You could look for a job in an area like relationship management or as a portfolio assistant. Neither of these will have you completely in charge of client money; you’ll need more experience for that. You will get a feel for the industry, though. Many bigger companies also will offer in-house training and perhaps even pay for you to further your training in outside programs.
- A job at a smaller boutique advisory firm: You’ll still likely start off in relationship management or as a portfolio assistant. At smaller firms, though, you are more likely to have the ability to quickly move up the ranks. They may not have as many resources for training and further education, though.
- Another financial services job: You could also start off in a different track. Working in areas like management consulting, investment banking or insurance could all help you someday become a financial advisor.
What is most important is getting a job in the financial services industry and using it to learn new skills, make connections and start figuring out exactly what kind of financial advisor you hope to be someday.
Financial Advisor Career Path Step 3: Certifications
Many financial advisors have certifications or licenses. Aside from providing additional training and expertise, certifications also indicate to an advisor’s employers and clients that they are capable of making smart, informed investment decisions. Some are the most common certifications professional financial advisors get are as follows:
- Certified financial planner (CFP)
- Chartered financial analyst (CFA)
- Certified public accountant (CPA)
- Chartered financial consultant (ChFC)
- Chartered investment counselor (CIC)
- Financial risk manager (FRM)
- Chartered life underwriter (CLU)
- Chartered alternative investment analyst (CAIA)
- Certified management accountant (CMA)
- Chartered mutual fund counselor (CMFC)
The types of certifications you strive for largely depends on the type of financial advisory work you want to do. If helping clients with their overall financial plan and budget is the work you love, a CFP makes sense. If investing in securities is your passion, a CFA certification could be useful. A CLU is a good choice for those who want to help clients with insurance needs. Make sure to think about which certifications will help you achieve your goals.
Licenses are similar to certifications but more formal. Most states require investment advisors to obtain the Series 66 license and Series 7 license. If you just want to work as a broker, you must pass the Series 7 General Securities Representative Exam. Other licenses are also available, but those are the principal options for prospective financial advisors.
The Bottom Line
Financial advisors help people manage their money and plan their futures. It takes a lot of work to become qualified for such an important job. You’ll need traditional education, work experience and certifications to make it happen. There are a number of routes to becoming a financial advisor, though. If your ultimate career goal is to be a financial advisor, start preparing now and thinking about how you might want to get there.
Tips for Finding a Financial Advisor
- If you are just looking for a financial advisor to help you plan your financial future, consider using SmartAsset’s free financial advisor matching service. You answer a few questions and we match you with up to three advisors in your area, all fully vetted and free of disclosures. You talk to each advisor and make a choice about how to move forward.
- Make sure you ask all the important questions of any advisor with whom you are considering working. By thoroughly interview a prospective advisor, you’ll know that this advisor will be able to do everything you want them to do and is a good fit for you.
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