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How To Become a Financial Advisor

By definition, an advisor is someone who has a deep understanding of a topic and is considered a specialist in their particular area with the ability to help guide and advise others.

Our goal is to give you the tools and knowledge to get started on a great career and become a financial advisor!

One of the most common types of advisor is a financial advisor.  This kind of advisor is a person that helps people manage their money as well as major life decisions that will influence their financial well being.  This could involve suggesting or evaluationg investments in stocks, bonds, mutual funds, or life insurance. Or helping to find the best tax advantages, financial planning, or creating budgets.

How do I become a financial advisor?  This is a question that is all too common and that we will help you solve.

Financial Advisor Career

But before starting out and pursuing a career as a financial advisor, you will need to find out if a career as a financial advisor would be a good fit for you.  This can be a rewarding and lucrative career but it can sometimes demand long hours and requires a certain skill set that not everyone has, or is willing to learn.

Especially as you start out your career you will mainly be a salesman as you try to gather and bring in clients to establish yourself in the hope that you can convince them to let you invest and manage their money.  This is not an easy task as money is an extremely personal issue for most people, and having another person manage that for them is difficult for them to let happen.  You will undoubtedly have to go through many rejections during this process.  If this isn’t something that you deal well with, or become very discouraged over, this career may not be for you.  If you are the type of person who believes in themselves and wants to stick things out for a better life, then continue on.

Financial Advisor Degree

Most advisors have a college degree.  It is not necessarily required but most companies as well as clients will look to find a financial advisor with at least 4 year college degree.  If you want to earn a professional certification such as a CFA (Certified Financial Analyst) or CFP (Certified Financial Planner) then a 4 year college degree is a mandatory requirement for these certifications and licensing.  You don’t need to have a degree in finance or economics, but the more rigorous your degree the more likely that your clients will be impressed with your qualifications and the more likely that they that will let you invest their money or pay for your planning and analysis.

Financial Advisor Jobs

When you are getting going it is very important to start out with the best possible company and job so that you have the best possible chance for success and career advancement.  Insurance companies while always eager to hire young and ambitious people are often a trap that leads to them stealing your clients since they require you to bring your own clients which will most likely be friends and family, and letting you go shortly after you bring them into the firm.

Advisory businesses and banks are a much better place to start your career as they will help you land clients from their own client lists and will take a better approach to training you and helping you become a more well rounded and successful advisor.

Financial Advisor Training

Getting the proper training is essential to starting your career and learning how to become an advisor.  Training is basically split into two critical parts; the financial advisor training program and financial advisor licensing.

Financial Advisor Licensing

In order to be considered a true financial advisor and not just another person giving someone

advice, advisors should look to earn licenses or accreditation from the different regulatory bodies.  Depending on where and in what capacity you want to work there are a few different options.

Chartered Financial Analyst

CFA certification requires you to demonstrate a mastery of in-depth financial topics and pass three separate  6 hr. examinations.   In order to qualify to become a chartered financial analyst you must have a 4 year college bachelors degree and a minimum of four years of work experience. Prep courses are available to help study and prepare for the exams, but most people prepare on their own on a  self-study basis.  When you register for the examination you’ll receive the curriculum that will be covered and tested.

Certified Financial Planner

Financial advisors often choose to acquire certification to become CFPs, but how to become a financial planner is the question? The requirements to become a CFP involves taking preparation courses at accredited colleges or universities, passing a two-day 10 hr exam, have a minimum of 3 yrs of work experience, and have a bachelors degree from a 4 yr college degree. For those who already have earned a pre-approved professional designation, registration can be done for the test without taking preparation courses.

Registered Investment Advisor

A registered investment advisor (RIA) is someone who receives compensation for providing financial advice. Portfolios with managed assets totaling less than $100 million require you to register with your state securities agency.  Portfolios with managed assets of over $100 million require you to register with the Securities and Exchange Commission (SEC). RIAs must pass the SEC/FINRA Series 66 exam, as well as the Series 6 or 7 exam.

Financial Advisor Training Program

When you are starting off you will undoubtedly be looking for a training program to teach you how to become an advisor. Different kinds of companies offer different programs and experiences, so knowing the differences can make a big difference in your overall training.

Most larger investment companies will offer comprehensive training programs for financial advisors.  These are designed to help you get the necessary work experience for becoming an advisor and prepare you for licensing exams that you will be taking. These are often highly competitive programs and have many applicants hoping to get a spot so apply early and don’t be shy about showing why you are the best person to be there.

Small advisory companies are another option. Instead of competing to get into a large investment firm many budding advisors start out with smaller companies. Often these will not offer the same structured training programs, but this is made up for by giving you the  opportunity for one-on-one mentoring with established advisors, and allow you to perform several different tasks for different clients and become more well rounded quicker.

When deciding on what route to take you also have to consider which option will offer better benefit, support during licensing, and access to client introductions. No matter what though, be prepared for long hours and hard work in order to prove to employers and clients that you are the best person for the job and will provide them with the best results.

Financial Advisor Salary

The actual salaries for  financial advisors  depend on the financial services firm that they work for and the type of client accounts that the advisor manages. Data from the  Bureau of Labor Statistics (BLS) shows that the median salary was about $68,000+ annually. These numbers though can vary greatly ($30k – $200k+) since the salaries for financial advisors are based on commission percentages. Commissions can be based on the total revenue the financial services firm generates, the total asset value of the financial advisor’s clients, or the type and amount of financial products that the advisor sells to his clients.  A financial advisor salary can also be greatly changed by other cash incentives such as profit sharing, bonuses, and stock awards.

Category: Personal Finance

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