Financial Advising Career
A Financial Advisor provides analysis and guidance to businesses and individuals in making investment decisions. They gather financial information, analyze it, and make recommendations.
Common Work Tasks
- Help clients with retirement and estate planning, funding the college education of children, and general investment choices
- Provide tax advice or sell life insurance
- Make sales calls and market services
- Give seminars or lectures
- Conduct consultations with new clients to assess their needs and obtain as much information as possible about the client’s finances and goals
- Develop a comprehensive financial plan that identifies problem areas, makes recommendations for improvement, and selects appropriate investments compatible with the client’s goals, attitude toward risk, and expectation or need for a return on the investment
- Adjust clients’ financial plan to any life changes—such as marriage, disability, or retirement
- Answer clients’ questions regarding changes in benefit plans or the consequences of a change in their jobs or careers
- Buy and sell financial products, such as securities and life insurance
- Educate clients about risks and various possible scenarios so that the clients don’t harbor unrealistic expectations
Other Job Titles
Financial Advisors are also known by other titles, including:
- Personal Financial Advisor
- Private Banker
- Wealth Manager
- Financial Analyst
- Financial Manager
Education, Training, and Experience
Education and Training
A bachelor’s or master’s degree is preferred for financial advisors. Employers usually do not require a specific field of study, but a bachelor’s degree in accounting, finance, economics, business, mathematics, or law provides good preparation for the occupation. 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.
Certification and Licensure
Almost all financial advisors need the Series 7 and Series 63 or 66 licenses. These licenses give their holders the right to act as a registered representative of a securities firm and to give financial advice. Because the Series 7 license requires sponsorship, self-employed financial advisors must maintain a relationship with a large securities firm. This relationship allows them to act as representatives of that firm in the buying and selling of securities. If a financial advisor chooses to sell insurance, they need additional licenses issued by State licensing boards.
Financial advisors may obtain the Certified Financial Planner credential, often referred to as CFP. This certification, issued by the Certified Financial Planner Board of Standards, requires 3 years of relevant experience; the completion of education requirements, including a bachelor’s degree; passing a comprehensive examination, and adherence to a code of ethics. The exams test the candidate’s knowledge of the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, and investment and estate planning. Candidates are also required to have a working knowledge of debt management, planning liability, emergency fund reserves, and statistical modeling.
Financial advisors need strong sales ability, including the ability to make customers feel comfortable. It is important for them to be able to present financial concepts to clients in easy-to-understand language. A financial advisor must also be able to interact casually with people from many different backgrounds. Some advisors have experience in a related occupation, such as accountant, auditor, insurance sales agent, or broker.
The median annual salary of a Financial Advisor is $67,000. The top 10 percent earn more than $145,000 annually, and the bottom 10 percent earn less than $33,000 annually. Median earnings in the industries employing the largest number of financial advisors are:
- Other Financial Investment Activities - $101,890
- Securities and Commodity Contracts Intermediation and Brokerage - $94,940
- Depository Credit Intermediation - $75,840
- Agencies, Brokerages, and Other Insurance Related Activities - $70,760
- Other Investment Pools and Funds - $70,040
- 2006-2016 Employment growth: 41%
- Number of new jobs created 2006-2016: 72,000
- Employment 2006 : 176,000
- Employment 2016: 248,000