How to Become a Personal Financial Advisor
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 chances for advancement in the occupation.
Personal financial advisors typically need a bachelor's degree. Although employers usually do not require a specific field of study for personal financial advisors, 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.
Personal financial advisors who directly buy or sell stocks, bonds, insurance policies, or specific investment advice need a combination of licenses that varies based upon the products they sell. In addition to those licenses, smaller firms that manage clients’ investments must be registered with state regulators, and 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. State licensing board information and requirements for registered investment advisors are 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). For this certification, advisors must have a bachelor's degree, 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.
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.
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. They 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 shrunk over time, and how a portfolio is distributed among different investments.
Selling 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.