Personal Financial Advisors

Summary

personal financial advisors image
Personal financial advisors help people with investments, taxes, and insurance decisions.
Quick Facts: Personal Financial Advisors
2015 Median Pay $89,160 per year
$42.86 per hour
Typical Entry-Level Education Bachelor's degree
Work Experience in a Related Occupation None
On-the-job Training Long-term on-the-job training
Number of Jobs, 2014 249,400
Job Outlook, 2014-24 30% (Much faster than average)
Employment Change, 2014-24 73,900

What Personal Financial Advisors Do

Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.  

Work Environment

Most personal financial advisors work in the finance and insurance industry or are self-employed. They typically work full time and may meet with clients in the evenings or on weekends.

How to Become a Personal Financial Advisor

Personal financial advisors typically need a bachelor’s degree. A master’s degree and certification can improve one’s chances for advancement in the occupation.

Pay

The median annual wage for personal financial advisors was $89,160 in May 2015.

Job Outlook

Employment of personal financial advisors is projected to grow 30 percent from 2014 to 2024, much faster than the average for all occupations. As the population ages and life expectancies rise, demand for financial planning services should increase.

State & Area Data

Explore resources for employment and wages by state and area for personal financial advisors.

Similar Occupations

Compare the job duties, education, job growth, and pay of personal financial advisors with similar occupations.

More Information, Including Links to O*NET

Learn more about personal financial advisors by visiting additional resources, including O*NET, a source on key characteristics of workers and occupations.

What Personal Financial Advisors Do About this section

Personal financial advisors
Personal financial advisors meet with clients to discuss their financial goals.

Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.  

Duties

Personal financial advisors typically do the following:

  • Meet with clients in person to discuss their financial goals
  • Explain the types of financial services they provide to potential clients
  • Educate clients and answer questions about investment options and potential risks
  • Recommend investments to clients or select investments on their behalf
  • Help clients plan for specific circumstances, such as education expenses or retirement
  • Monitor clients’ accounts and determine if changes are needed to improve the performance or to accommodate life changes, such as getting married or having children
  • Research investment opportunities

Personal financial advisors assess the financial needs of individuals and help them with decisions on investments (such as stocks and bonds), tax laws, and insurance. Advisors help clients plan for short- and long-term goals, such as meeting education expenses and saving for retirement through investments. They invest clients’ money based on the clients’ decisions. Many advisors also provide tax advice or sell insurance.

Although most planners offer advice on a wide range of topics, some specialize in areas such as retirement or risk management (evaluating how willing the investor is to take chances and adjusting investments accordingly).

Many personal financial advisors spend a lot of time marketing their services, and they meet potential clients by giving seminars or through business and social networking. Networking is the process of meeting and exchanging information with people, or groups of people, who have similar interests.

After financial advisors have invested funds for a client, they and the client receive regular investment reports. Advisors monitor the client’s investments and usually meet with each client at least once a year to update the client on potential investments and to adjust the financial plan based on the client’s circumstances or because investment options may have changed.

Many personal financial advisors are licensed to directly buy and sell financial products, such as stocks, bonds, annuities, and insurance. Depending on the agreement they have with their clients, personal financial advisors may have the client’s permission to make decisions about buying and selling stocks and bonds.

Private bankers or wealth managers are personal financial advisors who work for people who have a lot of money to invest. These clients are similar to institutional investors (commonly, companies or organizations), and they approach investing differently than the general public does. Private bankers manage a collection of investments, called a portfolio, for these clients by using the resources of the bank, including teams of financial analysts, accountants, and other professionals.

Work Environment About this section

Personal financial advisors
Many personal financial advisors travel to attend conferences or teach finance classes in the evening to bring in more clients.

Personal financial advisors held about 249,400 jobs in 2014. The industries that employed the most personal financial advisors were as follows:

Other financial investment activities 29%
Securities and commodity contracts intermediation and brokerage 23
Credit intermediation and related activities 16
Management of companies and enterprises 3
Professional, scientific, and technical services 3

In 2014, about 1 in 5 personal financial advisors were self-employed.

Personal financial advisors typically work in offices. Some also travel to attend conferences or teach finance classes in the evening to bring in more clients. The work of personal financial advisors tends to be less stressful than other financial occupations.

Work Schedules

Most personal financial advisors work full time, and about 3 in 10 worked more than 40 hours per week in 2014. They often go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.

How to Become a Personal Financial Advisor About this section

Personal financial advisors
Personal financial advisors must establish trust with clients and respond to their questions and concerns.

Personal financial advisors typically need a bachelor’s degree. A master’s degree and certification can improve one’s chances for advancement in the occupation.

Education

Personal financial advisors typically need a bachelor’s degree. Although employers usually do not require personal financial advisors to have completed a specific course of study, a degree in finance, economics, accounting, business, mathematics, or law is good preparation for this occupation. Courses in investments, taxes, estate planning, and risk management are also helpful. Programs in financial planning are becoming more available in colleges and universities.

Training

Once they are hired, personal financial advisors often enter an on-the-job training period. During this time, new advisors work under the supervision of senior advisors and learn how to perform their duties, including building a client network and developing investment portfolios. This training usually lasts for more than a year.

Licenses, Certifications, and Registrations

Personal financial advisors who directly buy or sell stocks, bonds, or insurance policies, or who provide specific investment advice, need a combination of licenses that varies with the products they sell. In addition to being required to have those licenses, advisors in smaller firms that manage clients’ investments must be registered with state regulators and those in larger firms must be registered with the Securities and Exchange Commission. Personal financial advisors who choose to sell insurance need licenses issued by state boards. Information on state licensing board requirements for registered investment advisors is available from the North American Securities Administrators Association.

Certifications can enhance a personal financial advisor’s reputation and can help bring in new clients. The Certified Financial Planner Board of Standards offers the Certified Financial Planner (CFP) certification. For this certification, advisors must have a bachelor’s degree, complete at least 3 years of relevant work experience, pass an exam, and agree to adhere to a code of ethics. The exam covers the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, investment and real estate planning, debt management, planning liability, emergency fund reserves, and statistical modeling.

Advancement

A master’s degree in an area such as finance or business administration can improve a personal financial advisor’s chances of moving into a management position and attracting new clients.

Important Qualities

Analytical skills. In determining an investment portfolio for a client, personal financial advisors must be able to take into account a range of information, including economic trends, regulatory changes, and the client’s comfort with risky decisions.

Interpersonal skills. A major part of a personal financial advisor’s job is making clients feel comfortable. Advisors must establish trust with clients and respond well to their questions and concerns.

Math skills. Personal financial advisors should be good at mathematics because they constantly work with numbers. They determine the amount invested, how that amount has grown or decreased over time, and how a portfolio is distributed among different investments.

Sales skills. To expand their base of clients, personal financial advisors must be convincing and persistent in selling their services.

Speaking skills. Personal financial advisors interact with clients every day. They must explain complex financial concepts in understandable language.

Pay About this section

Personal Financial Advisors

Median annual wages, May 2015

Personal financial advisors

$89,160

Financial specialists

$67,740

Total, all occupations

$36,200

 

The median annual wage for personal financial advisors was $89,160 in May 2015. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $39,300, and the highest 10 percent earned more than $187,200.

In May 2015, the median annual wages for personal financial advisors in the top industries in which they worked were as follows:

Securities and commodity contracts intermediation and brokerage $99,280
Other financial investment activities 95,500
Management of companies and enterprises 85,210
Professional, scientific, and technical services 76,810
Credit intermediation and related activities 73,250

Wages of self-employed advisors are not included in the earnings reported here.

Personal financial advisors who work for financial services firms are often paid a salary plus bonuses. Bonuses are not included in the wage data here.

Advisors who work for financial investment firms or financial planning firms, or who are self-employed, typically earn their money by charging a percentage of the clients’ assets that they manage. They also may earn money by charging an hourly fee or by getting fees on stock and insurance purchases. In addition to their fees, advisors generally get commissions for financial products that they sell.

Most personal financial advisors work full time, and about 3 in 10 worked more than 40 hours per week in 2014. They often go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.

Job Outlook About this section

Personal Financial Advisors

Percent change in employment, projected 2014-24

Personal financial advisors

30%

Financial specialists

10%

Total, all occupations

7%

 

Employment of personal financial advisors is projected to grow 30 percent from 2014 to 2024, much faster than the average for all occupations.

The primary driver of employment growth will be the aging population. As large numbers of baby boomers approach retirement, they will seek planning advice from personal financial advisors. Also, longer lifespans will lead to longer retirement periods, further increasing demand for financial planning services.

In addition, the replacement of traditional pension plans with individual retirement accounts is expected to continue. Many people used to receive defined pension payments in retirement, but most companies no longer offer these plans. Therefore, individuals must save and invest for their own retirement, increasing the demand for personal financial advisors.

Job Prospects

Job prospects for personal financial advisors should be relatively favorable compared with prospects in other financial sector occupations. Those who obtain certification will likely have the best prospects.

Employment projections data for personal financial advisors, 2014-24
Occupational Title SOC Code Employment, 2014 Projected Employment, 2024 Change, 2014-24 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Personal financial advisors

13-2052 249,400 323,200 30 73,900 [XLSX]

State & Area Data About this section

Occupational Employment Statistics (OES)

The Occupational Employment Statistics (OES) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link(s) below go to OES data maps for employment and wages by state and area.

Projections Central

Occupational employment projections are developed for all states by Labor Market Information (LMI) or individual state Employment Projections offices. All state projections data are available at www.projectionscentral.com. Information on this site allows projected employment growth for an occupation to be compared among states or to be compared within one state. In addition, states may produce projections for areas; there are links to each state’s websites where these data may be retrieved.

Career InfoNet

America’s Career InfoNet includes hundreds of occupational profiles with data available by state and metro area. There are links in the left-hand side menu to compare occupational employment by state and occupational wages by local area or metro area. There is also a salary info tool to search for wages by zip code.

Similar Occupations About this section

This table shows a list of occupations with job duties that are similar to those of personal financial advisors.

Occupation Job Duties ENTRY-LEVEL EDUCATION Help 2015 MEDIAN PAY Help
Budget analysts

Budget Analysts

Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.

Bachelor's degree $71,590
Financial analysts

Financial Analysts

Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.

Bachelor's degree $80,310
Financial managers

Financial Managers

Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.

Bachelor's degree $117,990
Insurance sales agents

Insurance Sales Agents

Insurance sales agents contact potential customers and sell one or more types of insurance. Insurance sales agents explain various insurance policies and help clients choose plans that suit them.

High school diploma or equivalent $48,200
Insurance underwriters

Insurance Underwriters

Insurance underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.

Bachelor's degree $65,040
Real estate brokers and sales agents

Real Estate Brokers and Sales Agents

Real estate brokers and sales agents help clients buy, sell, and rent properties. Although brokers and agents do similar work, brokers are licensed to manage their own real estate businesses. Sales agents must work with a real estate broker.

High school diploma or equivalent $45,610
Securities, commodities, and financial services sales agents

Securities, Commodities, and Financial Services Sales Agents

Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets. They sell securities to individuals, advise companies in search of investors, and conduct trades.

Bachelor's degree $71,550
Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition, Personal Financial Advisors,
on the Internet at https://www.bls.gov/ooh/business-and-financial/personal-financial-advisors.htm (visited December 10, 2016).

Publish Date: Thursday, December 17, 2015

What They Do

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Pay

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State & Area Data

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2015 Median Pay

The wage at which half of the workers in the occupation earned more than that amount and half earned less. Median wage data are from the BLS Occupational Employment Statistics survey. In May 2015, the median annual wage for all workers was $36,200.

On-the-job Training

Additional training needed (postemployment) to attain competency in the skills needed in this occupation.

Entry-level Education

Typical level of education that most workers need to enter this occupation.

Work experience in a related occupation

Work experience that is commonly considered necessary by employers, or is a commonly accepted substitute for more formal types of training or education.

Number of Jobs, 2014

The employment, or size, of this occupation in 2014, which is the base year of the 2014-24 employment projections.

Job Outlook, 2014-24

The projected percent change in employment from 2014 to 2024. The average growth rate for all occupations is 7 percent.

Employment Change, 2014-24

The projected numeric change in employment from 2014 to 2024.

Entry-level Education

Typical level of education that most workers need to enter this occupation.

On-the-job Training

Additional training needed (postemployment) to attain competency in the skills needed in this occupation.

Employment Change, projected 2014-24

The projected numeric change in employment from 2014 to 2024.

Growth Rate (Projected)

The percent change of employment for each occupation from 2014 to 2024.

Projected Number of New Jobs

The projected numeric change in employment from 2014 to 2024.

Projected Growth Rate

The projected percent change in employment from 2014 to 2024.

2015 Median Pay

The wage at which half of the workers in the occupation earned more than that amount and half earned less. Median wage data are from the BLS Occupational Employment Statistics survey. In May 2015, the median annual wage for all workers was $36,200.