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.