Financial Planner: How to Become a Licensed Financial Planner

Find out how to become a licensed financial planner. Research the education requirements, and learn about the experience you need to advance your career in financial advising.

Do I Want to Be a Licensed Financial Planner?

Financial planners fall under the broader category of financial advisors. These professionals help individuals and companies make informed decisions about their investment portfolios. They are knowledgeable about different investment opportunities and can accurately communicate an investment's strengths and weaknesses.

According to the U.S. Bureau of Labor Statistics, about 20% of financial advisors were self-employed in 2012. They typically work long hours, with nearly a third of workers putting in more than 40 hours a week. These professionals also often must travel or attend meetings on weekends and evenings to connect with clients.

Job Requirements

A bachelor's degree program in finance or another related field provides a pathway to entry-level positions in financial planning, while completion of a master's degree program may open up more career opportunities. Some professionals need to be licensed depending on the service they provide, and voluntary certification might increase a person's job prospects. The following table contains the main requirements for being a financial planner:

Common Requirements
Degree Level Bachelor's degree required; a master's can increase chances for advancement*
Degree Field Financial planning, accounting, business or a similar field*
Licensure and/or Certification Licensing requirements vary; optional certification is also available*
Experience Experience required for certification**
Key Skills Interpersonal, analytical and selling skills*
Computer Skills Ability to use financial analysis, customer relationship management and document management software***

Sources: *U.S. Bureau of Labor Statistics, **Certified Financial Planner Board of Standards, ***O*Net Online.

Step 1: Obtain a Degree from an Accredited University

Most financial planning jobs require a bachelor's degree. Students attending schools that don't offer financial planning programs may consider majoring in accounting, finance or a related field. Some finance programs may offer a concentration in financial planning, which can satisfy requirements for professional certifications, such as the Certified Financial Planner (CFP) designation.

Regardless of the chosen specialty, students generally begin their studies with introductory business courses, such as business statistics and ethics. After completing core courses, students may take specialized classes in accounting, business and finance that explore issues ranging from auditing to taxation and risk management to financial analysis.

Step 2: Meet Licensing Requirements

The Financial Industry Regulatory Authority (FINRA) licenses financial planners and other securities professionals. Licensing requirements vary depending on what services individuals wish to offer and the state where they plan to work. For example, individuals may need to complete Series 7, 63 or 66 examinations. The North American Securities Administrator Association (NASSAA) notes that state securities regulators dictate licensing standards to ensure that investors are protected and state laws are followed.

Step 3: Gain Work Experience

Licensed financial planners may work for investment banks, private firms or be self-employed. These professionals may evaluate client financial assets, provide financial advice and offer strategies to achieve financial goals. Financial planners may decide to specialize in areas like taxation, insurance products or investment options, such as stocks and bonds. The increasing number of retirees and wealthy people who will need assistance managing their money may spur growth in the field of financing.

Step 4: Become a Certified Financial Planner

The BLS states that while certifications are not always a requirement, they may enhance professional standing and are preferred by employers. The Certified Financial Planner Board of Standards confers the Certified Financial Planner (CFP) credential to qualified applicants. To be eligible for the certification, applicants must have three years of work experience, complete educational requirements and pass a certification exam. The exam tests applicants on comprehensive financial topics, including financial, insurance and investment planning.

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