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 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, consider finding one with SmartAsset’s free financial advisor matching service.
Financial Advisor Career Path in 4 Steps
Becoming a financial advisor can be a long time commitment. It takes a combination of education, experience and possibly some certifications. We’ve compiled all of the information you need to know about becoming a financial advisor and condensed it into a four-step process.
Step 1: Finish Your 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 join 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.
Step 2: Get 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 on 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.
Step 3: Obtain 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 should strive for largely depend 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.
Step 4: Get Your First Job
Now that you’re qualified, it’s time to get your first job as a financial advisor. There are a number of specialties and potential career fields under the umbrella of being a financial advisor. That’s why when you’re starting out it’s a good idea to either work at a big broker-dealer or to find an advisor in the specialty you like best to take you under her wing so you can learn.
Since you’ve prepared for a life of selling yourself, it’s probably time to start. Network all you can to find the right opportunity that will provide you with on-the-job training and get your foot in the door of an aspect of financial advisory that you could see yourself being happy with.
The CFP board does offer a service where they will connect new financial planners with mentors to help them get a foothold in the industry. This is something to keep in mind whether you’re struggling to find something or you already found a job. You can also join a financial advisor or financial planning organization to build your network even more.
Questions to Ask Yourself Before Starting a Financial Advisor Career Path
It’s not easy to go through the process and eventually become a financial advisor, so you should make sure it is what you want and you feel that you can be good at before getting started. While it can be a rewarding career, you don’t want to go through years of education and training only to realize it’s not a great fit for yourself.
Before you begin, consider asking yourself some of these questions to see if it’s a good potential fit:
- Are you comfortable networking, even with complete strangers?
- Are you comfortable making large financial decisions for yourself or others?
- Are you passionate about finance and about helping people live a better financial life?
- Does the idea of promoting yourself and what you can offer others excite you?
- Do you like working with numbers?
- Do you find the financial markets interesting?
If you can answer yes to most of these questions then you may be a good fit for a career in financial advisory.
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 a combination of 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 so that you can make it a reality.
Tips for Finding a Financial Advisor
- Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- 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.
- If you’re looking for resources on how to become a financial planner instead, you can check out our guide.
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