Everything you need to know about becoming a Financial Advisor

Do you like solving puzzles? Do you enjoy working with numbers, doing research, and analyzing data? Is your goal in life to be a Robinhood of sorts, only helping others become educated about wealth and finance so as to increase their earnings over time? You may just be suited for life as a financial advisor.

What is a financial advisor?

Financial advisors are professionals who offer financial guidance and planning. Advisors can operate in the private or public sector, and their services can serve a wide variety of clients, or hold a niche with clients that are individuals or businesses.

What does a financial advisor do?

Financial advisors offer guidance to their clients with regard to their finances. They help to increase their client’s wealth and capacity to make money with their knowledge of the financial industry, continued education, ability to spot trends, and overall business savvy.

Whether they are individually contracted to one business or handle an array of clients, financial advisors often run the gamut when it comes to being generalists and handling all of their client’s financial responsibilities, or specializing in topics such as debt, investment, and tax law. Financial advisors have the capability of assessing financial goals, correctly identifying profitable investments, and explaining any tax laws, loopholes, and updates that may affect their client’s business.

How do you become a financial advisor?

This line of work can require a lot of patience, but your first step to becoming a financial advisor is to obtain a bachelor’s degree in, honestly, any subject. It does help if you have a background in statistics, finance, economics, or other related fields, but business and communication studies degrees will also prepare you well for a job as a financial advisor. To get ahead of the competition, a master’s degree is considered a good idea. In fact, some of the most reputable firms require them. Many people choose to earn their MBA while working entry-level finance jobs, in order to obtain some experience to help them with the final steps toward their ideal position.

Additional licenses may also be required, depending on your particular career path in finance. The North American Securities Administrators Association (NASAA) oversees the licensing requirements of the Series 63 (which allows licensees to engage in business transactions in their state), Series 65 (which is necessary to provide financial services on a non-commission basis), and Series 66, which combines the previous two into one extensive exam.

Applicants — especially those applying to corporate positions — may be required to pass FINRA’s Series 6 exam and the Investment Company and Variable Contracts Products Representative Exam. They might also need to pass the Series 7 exam, which is the official General Securities Representative Exam. Both exams test the competence of entry-level job applicants in various areas of finance and are very beneficial to have on your resume. These exams will authorize you to buy and sell securities, like stocks. Series 7 is touted as one of the most difficult options, so you may take some extra time considering whether or not to take it, depending on your ideal career path.

If you’ve gone in the Series 6 or 7 direction, the next step would be to obtain a sponsorship from a company that is FINRA approved. This is where your network will be highly valuable to you, so ensuring prior experience in the industry will certainly give you a leg up. If you have interned or worked with a company that can sponsor you, they will also often pay for the exam fees. Each of the exams has an associated fee, ranging in cost from $40 to $245. Once you pass your exam, you may obtain an official license from FINRA.

The Chartered Financial Analyst (CFA) certification is a more difficult exam that requires a bachelor’s degree and four years of full-time, related professional experience under your belt to even register for. It is highly popular for Wall Street professionals and upper-level financial brokers. It takes about four years to earn the CFA credential, which involves passing three exams that require more than 300 hours of study each.

What skills do you need to become a financial advisor?

Financial advisors require a myriad of skills to be successful at what they do. In addition to patience and organization, they must be capable of strategic planning and have particularly stand-out communication skills, as a good amount of client interaction takes place in positions like this. It is an advisory position, so having the capacity to do the work and then explain if it helps you to do your job to increase your client’s wealth and financial knowledge. Communication is especially important because your clients will be your biggest source of referral activity in most cases.

Having a history of investment planning can put you ahead of the other candidates vying for any particular position. Be it your own, or having dabbled with a former employer, make sure you highlight any experience such as this in your application material. Data analysis is a necessary skill, so the ability to work with numbers and do continuing research is ideal.

Maintaining regular financial reports for your clients is a large responsibility in this role, and if you’re starting out in an entry-level role, it could be a while before an assistant becomes necessary. Also, highlight any sales, advising, mentorship, or customer relationship experience (CRM) experience you may have.

What is the average salary for a financial advisor?

Though the road to this position could be a bit winding, the pay could make it worth it within the first couple of years. According to Payscale, the average salary for an entry-level financial advisor is $59,915 per year. The median for the industry-at-large was reported at $87,850 in 2019, with earning potential to reach into the $150,000 and $200,000 range.

What is the typical career path for a financial advisor?

The career path for a financial advisor can vary quite a bit. Some people know from the beginning that they would like to venture down this path, and take on management positions and part-time work that involves handling money and balancing drawers. Networking early on can help pivot your career in the direction you’d like it to go, as a large part of this position involves sales. Financial advisors are almost always trying to sell. Convincing people to become clients, convincing clients to invest and move their finances around. These people must be very convincing.

Many people grow into financial advisory positions following careers as analysts or stock market brokers. Individuals who have been involved in high-profile finance jobs or have industry overwhelm often find themselves advising households and individuals later in their careers. Many advisors find this option rewarding, as they can help families make sound decisions about their finances that won’t come back to bite them in retirement.

Live Oak Bank, Hancock Whitney Corporation, Cube Management, Bank of Hope, Citizens Financial Group, and Johnson Financial Group are currently seeking mid-level wealth advisors. DXC Technology, Collaborative Solutions, and Edison International are in need of an array of experienced financial advisors.