A career in financial planning or advising can be challenging and difficult, but rewarding (both emotionally and fiscally) if you succeed. People who do succeed in the field of financial planning are usually extroverted and self-motivated, and need to be able to analyze market trends and communicate clearly to clients.
A financial planner or advisor helps businesses and individuals decide the best place to invest their money. They keep a close eye on market and commodities trends, the volatility market, bonds, liquid CDs, and so forth, and sometimes act as a financial weatherman, predicting what will happen.
There are a few things that are necessary in order to secure a position as a financial planner. A college degree is essential, usually in finance, accounting, economics, math, business, or law. Of course, the degree becomes less important if it is possible to prove competence through past experience. Licenses and certification (series 6, 7, and 63) are also necessary for advisors who sell mutual funds, annuities, insurance, stocks, or bonds. Exams to gain these licenses are administered by the Financial Industry Regulatory Authority (FINRA).
Besides education and licensing, financial planners also need extremely good interpersonal skills and an intuitive understanding of psychology. They need to be able to read between the lines and be able to express complex investment concepts clearly. Maintaining the proper image and attitude will help draw clients in, but more importantly, the financial planner must gain their trust. In addition to good communication skills, financial planners need to have solid problem-solving skills and sales ability. They must be able to tailor their advice to suit the needs of the client.
Next thing is to find a firm hiring. If the candidate is right out of school, it’s necessary to find a firm willing to enroll them in a training program. This training includes the tests for the aforementioned licenses and certifications, but also testing for the company’s own particular regulations. Investment firms, banks, finance, and insurance companies will hire, but many financial advisors are self-employed, operating their own small firms, typically in urban areas.
A financial planner will need to muster up a client base. Usually, this will initially include friends, relatives, and spouses, but as their experience and success grows, so should the client base. Word of mouth referrals are an integral part of a growing base, but sometimes cold calling (a call to a person unknown to the financial planner, an attempt to interest them in the service offered) can be an extremely useful tool. This is the most important element to guaranteeing success. The more clients an advisor has, the more commission, but more responsibility.
The process begins with paperwork. A financial planner will look at a client’s financial situation and ask them to define long and short term fiscal goals. The planner will suggest different ideas, and together, they will devise a plan to help the client reach their goals. After that, they will meet about once a year in order to make adjustments to the plan.
Prospects are very good for those looking to enter the financial planning field. According to the Bureau of Labor Statistics (www.bls.gov), job growth in this area is expected to increase 30% between 2008 and 2018, in order to help the millions of workers expected to retire in the upcoming years. Despite a surge in demand, the competition will remain stiff. An average financial planner makes around $70,000 per year, but an enterprising individual can make much more than that. This is earned through salary (if employed by a large firm), or commission.
Finally, financial planners need to be responsible. When they engage clients, they are essentially taking control of someone’s life earnings. Messing up can result in the loss of someone’s savings and future.