How to Become a Financial Planner

Mar 04, 2020

Learn how to become a financial planner. Research the education requirements, training and licensure information, and experience required for starting a career in financial planning.

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Should I Become a Financial Planner?

Financial planners, also known as financial advisers, are professionals who help people make decisions regarding matters of money, such as investments, taxes, and insurance. They might also sell insurance, stocks, bonds, and annuities. Travel or weekend and evening hours might be required to seek new clients or to meet with existing customers.

Career Requirements

Degree Level Bachelor's
Degree Field Finance, economics, accounting, business, mathematics, or related field
Licensure and Certification A state-issued license is required; voluntary certifications are available
Key Skills Strong math, interpersonal, analytical, and sales skills; proficiency in spreadsheet, data-management, project-management, word processing, and financial analysis software
Median Salary (2018) $88,890 (for personal financial advisers)

Sources: U.S. Bureau of Labor Statistics (BLS), O*Net Online

Step 1: Earn a Bachelor's Degree

A bachelor's degree is the minimum education an individual needs to become a financial planner. While there is no required major, the U.S. Bureau of Labor Statistics recommends that aspiring financial planners focus their studies in finance, economics, accounting, business, mathematics, or a related field that can help them gain the skills they need to succeed in this profession. Some schools offer programs specifically in financial planning.

Participating in an internship with a financial planning company can also help students gain hands-on experience and learn new skills relevant to the profession. Some schools may require completion of an internship for graduation.

Step 2: Acquire Work Experience

Forbes reports that most individuals start out in other careers before becoming financial planners. Accumulating work experience in the legal, accounting, and education professions can make some candidates more attractive to potential clients. In addition, some employers may prefer candidates with proven capabilities and prior success as employees or entrepreneurs in other professions.

Step 3: Obtain Licensure

If prospective financial planners hope to give advice on publicly traded securities and insurance products, or expect to buy and sell these instruments directly, they may be required to obtain state licensing before doing so. The specific license required will depend on the product planners intend to buy, sell, and/or consult about and the state they plan to work in.

Individuals may visit the North American Securities Administrators Association for detailed information on licensing requirements for planners who hope to give advice on the buying and selling of specific financial instruments. Prospective planners who intend to buy, sell, and consult about specific insurance instruments may visit the Independent Insurance Agents and Brokers of America. And finally, future planners who intend to buy, sell, and advise on specific securities or stocks may visit the Financial Industry Regulatory Authority.

Step 4: Consider Certification

Although certification isn't necessarily required to work as a financial planner, many employers and self-employed planners seek to acquire the Certified Financial Planner (CFP) designation to make them more attractive to potential clients. The CFP is administered by the Certified Financial Planner Board of Standards, Inc. (CFPBSI), which may require each candidate to possess at least a bachelor's degree in any field from an accredited institution and at least three years of full-time financial advising experience.

Continuing education is required to renew CFP certification. Professional financial planners can continue their education directly through the CFPBSI, which has strict standards regarding the number of hours and type of continuing education credits CFPs must have in order to renew. In addition to fulfilling renewal requirements, continuing education can help a financial planner stay current on industry trends and innovations.

Step 5: Advance to Management

With professional experience and a track record of good performance, financial planners can advance to management positions. As managers, they will have additional responsibilities such as scheduling and making new hires. More than five years of experience is typically required for a management position. The U.S. Bureau of Labor Statistics indicates that financial planners who continue their studies in a master's degree program could have a better chance at landing managerial positions.

To sum up, financial planners should have at least a bachelor's degree in a field related to finance or mathematics before going on to gain experience in a similar field and obtaining licensure or potentially even certification in financial planning.

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