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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.

Should I Become 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, around one-fifth of financial advisors worked for themselves in 2012. They typically work long hours, with approximately 30% of workers putting in more than 40 hours a week. These professionals often travel or attend meetings on weekends and evenings to connect with clients.

Career Requirements

Degree Level Bachelor's degree is required; a master's degree 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 available
Experience Experience required for certification
Key Skills Interpersonal, analytical and selling skills; familiarity with financial analysis, customer relationship management and document management software
Salary $81,060 is the median annual salary for personal financial advisors (2014)

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 accounting, business and finance classes 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 need assistance managing their money may spur growth in the field of financing. According to the BLS, job opportunities in this field are expected to increase 27% between 2012 and 2022.

Step 4: Become a Certified Financial Planner

The BLS states that while certifications are not always a requirement, they may enhance professional standing and employment prospects. 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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