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How to Become a Financial Advisor or Analyst

Guide on how to become a financial advisorLike it or not, money is important. 

While most reasonable people want to downplay, or even deny, the role of money in our society, there’s no denying its impact on our lives. We should not live solely for the almighty dollar, but we all take actions, virtually every single day, that revolve around money. 

If money doesn’t matter, why does 85% of the full-time global workforce go to jobs where they are not engaged? During the financial crisis that started in 2008, millions of people lost their homes due to foreclosure; they were forced to leave their houses because they didn’t have enough money to pay the mortgage. These are just two examples of how money has an obvious effect on our lives. 

To live a comfortable life in today’s society, we need to earn enough money to be sheltered, fed, healthy, and happy. We also need to make the right choices with the money we earn so that in retirement, when we are no longer earning an income, we have the financial resources to live with dignity. To meet this purpose, many people turn to a financial advisor. 

A financial advisor is someone who provides guidance on numerous money-related matters, including investments, insurance, mortgages, savings, estates, and taxes. Essentially, they are the highly-trained professionals who help people get the most from their hard-earned dollars. 

Duties for a financial advisor take a variety of forms. They can include working with potential clients to discuss financial goals, explaining the benefits of certain financial decisions, and recommending investment choices. Financial advisors may help a client plan for a certain situation, such as retirement, college, the birth of a child, or the death of a spouse. 

Some financial advisors specialize in a certain area, such as retirement or investments, while others provide all-around services. Likewise, some will simply provide advice, while others will actually perform the tasks and manage the finances of their clients. 

Through it all, financial advisors are dedicated to helping people get the most from their money and ensure they have a stable financial future. 

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Is this the Right Career for You?

To be a successful financial advisor, the most important characteristic is a passion for helping people. It’s not a love of money. As a financial advisor, you have a moral as well as legal responsibility to use your knowledge to grow the wealth of your clients. Understanding that your work goes beyond dollars and cents, but positively impacts lives, is crucial to staying motivated in this complex, detailed profession. 

Of course, an aptitude for numbers and math also helps. As a financial advisor, you have to use mathematical skills to reach specific conclusions, so it’s helpful to have a natural ability with numbers, which will be enhanced by your education and training.

Clear communication is also important. You will have to explain why certain decisions are the right decision, and you should be motivated to teach people about financial issues so they are confident in your decision making. 

If you like helping others, have a natural skill in numbers, and want to work in a growing, well-compensated career, then a finance degree might be the perfect choice for you.

How to Become a Financial Advisor

The first step to becoming a financial advisor, after high school graduation of course, is to earn your bachelor’s degree in a finance degree or complete a similar education. While you may be able to secure a job in this field with less education, most people will need at least a bachelor’s degree to land a position.

#TRENDING: Bachelor of Business Administration / Financial Planning from Grantham University

Before enrolling in an online degree, think about the direction you want to take with your career. There are numerous specialties and areas of focus for financial advisors, so take your time to learn about the various options and decide which finance skills you want to develop. Once you find a focus you like, make sure the finance degree you select aligns with those goals. If you want help finding a focus, a good source is the list of professional designations from the Financial Industry Regulatory Authority (FINRA). This organization lists roughly 200 designations, so you can understand that the role of financial advisor is surprisingly diverse.

Majoring in finance, economics, business, statistics, or any field that deals with mathematics and money is a suitable option. While it deals less with mathematics, a degree in law can also be a useful addition, either an a major or a minor, as it will give you a background in the regulations and standards that revolve around this important career.

Coursework will largely depend on the specific focus of your degree, but courses should give you an understanding of many aspects involved in finances. For example, you will need to thoroughly understand investments, including how they are purchased, how they grow, the best investment strategies for certain people (retirees vs college grads, for example) and how compounding interest impacts the totals of an investment portfolio. You will also need to understand insurance, including how it is priced and how to analyze a good insurance package vs a weak insurance package. All of these points, and more, should be covered in whatever finance degree you select. 

A finance degree, while not the only course to this career, is likely the most common. As such, you will likely be a part of a school’s larger business college, as most institutions offer finance through the school of business. The specific course you need to complete often include business prerequisites. These are intro-level business and math classes that help build a foundation of knowledge that will be needed in more detailed classes. Most programs will include core courses, usually centered around a business curriculum. Once these basic courses are complete, you can move into the classes that are specific to a finance degree. These classes can come with names such as “finance accounting and reporting,” “investment management,” and “corporate finance.” You may also have a finance-related elective course, which can cover a huge variety of topics.

#TRENDINGBachelor of Science in Finance & Economics from Grand Canyon University

If you attend your bachelor’s degree program full time, you should be able to complete your education in four years. The price, however, will fluctuate drastically depending on what institution you attend and what scholarships are available. 

If you choose to enter the job market immediately after college, you will be able to find plenty of organizations willing to hire you. According to the BLS, roughly 51% of all financial advisors work in “securities, commodity contracts, and other financial investments and related activities.” They are also employed by credit businesses, insurance carriers, and various companies who need financial management for their own business. Roughly a quarter of all financial advisors are self-employed, which likely presents the greatest opportunity for personal income growth, but also brings the greatest risk.

Your formal education may be complete, but you’ll still have a lot to learn about the financial industry, which is why so many new hires will have to go through an initial training period. During this period, new hires work under or alongside senior advisors and experienced professionals. This allows recent graduates to obtain on-the-job training, and can also help you build a client portfolio so you are ready to have a sustained income once you are on your own. In most cases, the training period will last roughly a year.

Financial Advisor vs Financial Planner: Similar, Not Same

Financial advisors and financial planners are two careers that, while similar, are not exactly the same thing. It helps to clarify this, as many people confuse the two, and knowing the differences will obviously be important to your career.

Simply put, a financial planner is a type of financial advisor. It is perfectly accurate to say that all financial planners are financial advisors, but not all financial advisors are financial planners, as the finance certifications are different. 

“Financial advisor” is a broad term that applies to anyone who helps clients manage their money. It is an umbrella term under which all other forms of the position fall under. They can specialize in investment management, estate planning, insurance, or retirement, among numerous other specialties. A “financial planner,” on the other hand, is simply an advisor who specializes in the overall planning to help someone achieve financial growth and longterm success. Essentially, they create a plan that individuals or organizations can use to best utilize their money.

Licensing & Certification

Licenses and certifications may also be required for people who are working as financial advisors. This is especially true if you are buying or selling investments, such as stocks or bonds, on behalf of your clients. By law, anyone who executes financial actions will need to have finance certifications; if you are simply providing advice, then certification may only be recommended, but not required.

While not every financial advisor needs to hold finance certifications, there are a few that will help you in your career. These licenses are administered by FINRA

Series 6

Series 6 licensing from FINRA allows financial advisors to sell packaged securities, including mutual funds and variable annuities. However, if you only have a Series 6 license, you are unable to sell stocks or bonds. For many advisors, Series 6 licensing is the first one they acquire. It allows them to get hands-on experience and sell a limited range of financial products. 

Series 7

Next in line us usually FINRA Series 7 license. In many cases, this is the standard for the financial industry, and many advisors hold this level. If you hold a FINRA Series 7 license, you are able to sell stocks, bonds, options, and futures, allowing you to provide a variety of options to your clients. It also allows for packaged securities, so you can essentially sell everything but commodities, which requires a Series 3, as well as real estate and life insurance, which both require their own specific licensing. 

Be aware that Series 7 licensing is considered by many to be the most difficult to obtain. This is because it has such broad authority, so it needs to cover a vast range of financial subjects. Once you complete FINRA Series 7 licensing, however, you will be well prepared to serve the needs of many clients. 

Series 65 

This licensing is only needed for advisors who are compensated with fees as opposed to commission. It is heavily soaked in regulations, as the rule for advisors who only receive fees are actually quite different. Much of the material, however, is a repeat of the content covered in Series 7 licensing, so it’s likely that most of the information is already familiar to you. Advisors who already have Series 7 will usually find the Series 65 testing to be relatively easy. 

What Can You Expect from a Financial Advisor Salary

Financial advisors, or “personal financial advisors,” as they are called by the Bureau of Labor Statistics (BLS), earn a substantial income; even the lowest 10% in this career can expect earnings slightly above the national average for all careers. The BLS says that the median annual financial advisor salary of $88,890 in May of 2018. Compared to the national average, which is below $39,000, this is an outstanding income, more than doubling the national average. 

Even the lowest 10% can expect a strong salary. The lowest 10% in this field earn less than $41,590, a number that is still almost $3,000 more than the national average. 

However, there is virtually unlimited potential for growth, and the top financial advisors, the ones working with high-net-worth and high-income clients, can expect to bring in even larger salaries. The BLS states that top 10% for financial advisor salary is $208,000 annually. It should be noted that once a top career reaches $208,000, the BLS basically stops counting, so it’s possible (although not certain) that the top financial advisors earn even more than that. 

If you look at the low, median, and top numbers for financial advisor salary, you may have noticed a large fluctuation in incomes. There is a difference between the top and bottom earners of at least $166,000. What does this mean? It means that if you are really good at successfully guiding clients to financial prosperity and growth, you will be well rewarded. In some careers, everyone, regardless of skills and talent, more or less earns the same income. In the financial advising sector, much like sales or attorney services, the top tier is well rewarded financially. 

Expected Growth for Financial Advisors

Not only is the pay for these careers very rewarding, the job growth shows a field that will be in high demand over the next decade. The BLS says that personal financial advisors will be in high demand between 2016 and 2026, growing by 15%. This growth translates into roughly 312,000 new jobs by 2026, an addition of about 40,000 from the current numbers. 

There will be a variety of factors driving this growth, but the biggest driver will be an aging population; baby boomers approaching retirement that will seek financial advice to ensure their nest egg lasts for their lifespan, which is steadily extending. The disappearance of traditional pension plans will also drive this growth; in the past, people could expect to work for a single company their entire careers, then retire with a nice little pension. Now people can’t count on their companies to provide financial security, so they have to rely on themselves, with the help of expert advice, of course. 

There is a thought that automated computer programs could temper the growth of financial advisors, but the affect if this technology may be limited when people need simple, humanized answers to complex questions. 

Where You Can Find Jobs as a Financial Advisor

You can earn an income working as a financial advisor in virtually any area of the country, from small towns to metropolitan areas. But the data shows that if you want to work as a financial advisor, New York is the place for you. 

The largest number of this profession is found in the state of New York, where over 26,000 people earn an income in this career. The next largest are California, Florida, Texas, and Massachusetts, respectively. 

New York not only has the most financial advisors, they also have the highest percentage. For every 1,000 people in the New York workforce, there is 2.85 financial advisors. The next highest is Connecticut with 2.7. 

When it comes to payment, New York is once again at the top, as the median salary for financial advisors in this state is $164,260. Of course, the cost of living is high all across the state, but this is a strong salary no matter where you live. The District of Columbia is #2 on the list, while Wyoming comes in at a rather surprising 3rd place. 

Get the Right Information for Your Education!

Are you ready to launch a rewarding career helping clients achieve their financial goals? If you think working as a financial advisor, with all the right financial certifications, a finance degree might be right for you. With tools and resources from GetEducated, you can find the right degree to begin a fantastic future in this exciting career field! 

Online Finance Degrees


Related Resources
Rankings of the Cheapest Online Bachelor’s in Finance
Rankings of the Cheapest Online Master’s in Finance
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