Financial advisors help clients plan for their short-term and long-term financial goals, including buying a home, paying for their children's education, and retirement. They might also provide investment, tax, and insurance advice. Financial advisors spend much of their time researching and analyzing investment opportunities and meeting with clients and potential clients to go over investment strategies.
Financial Advisor Duties & Responsibilities
Typical job duties for a financial advisor include:
- Market research
- Market analysis
- Recruit and solicit clients
- Assess clients' needs and goals
- Recommend strategies
- Execute strategies
- Monitor accounts
- Identify new opportunities
- Follow Securities and Exchange Commission regulations
Financial advisors assist individuals with their investment strategies by assessing clients' financial situations and making recommendations. Advisors often execute strategies for clients. Clients' needs can be varied, including both short-term and long-term goals, and advisors will need to present a strategy that addresses all needs. For example, a client may want to build a retirement fund in addition to saving for children's college expenses that may be only a few years in the future.
To be successful, financial advisors need to have a deep understanding of investment markets and a knack for identifying the best stocks, bonds, or funds.
Recruiting new clients also is a big part of the job, especially when starting out. Financial advisors accomplish this through traditional advertising, mailings, or cold calling. They also might hold seminars on financial planning or speak at seminars held by others. As financial advisors build a client base, they can do more to build their business through word of mouth, assuming their current clients are happy with the investment advice they are receiving.
Financial Advisor Salary
Independent financial advisors typically earn money by charging a fee based on the value of clients' assets. Financial advisors who work for firms often are paid a salary plus bonuses.
- Median Annual Salary: $90,640
- Top 10% Annual Salary: $208,000
- Bottom 10% Annual Salary: $40,800
Source: U.S. Bureau of Labor Statistics, 2017
Education, Training, & Certification
No specific field of study is required for financial advisors to get started in the business, but professional growth and advancement often depend on the proper certifications and a master's degree.
- Education: At a minimum, financial advisors need a bachelor's degree, and finance, economics, and accounting generally represent the best paths to get started in the field. Earning a master's of business administration or a master's degree in finance will help with advancement or with marketing and recruiting clients.
- Certifications: Anyone selling financial products such as stocks, bonds, and insurance policies need licenses to do so. Financial advisors who manage their clients' investments must register with either the state or the SEC, depending on the size of the firm for which they work. Many financial advisors earn the Certified Financial Planner credential from the Certified Financial Planner (CFP) Board. This requires passing an exam after first earning a bachelor's degree and acquiring three years of experience in financial planning.
Financial Advisor Skills & Competencies
Financial advisors need expert knowledge of market performance and investment strategies, but they also must have good people skills since recruiting clients and offering advice is a large part of the job. These are some valuable skills financial advisors should have:
- Analytical Thinking: Much of the job involves tracking data and projecting future performances of various stocks, bonds, and funds. Financial advisors need to be able to apply this analysis to the needs of their clients. Assessing those needs also involves analyzing where clients are at, where they want to be, and how much time they have to get there.
- Communication: Working with clients and prospective clients one-on-one is a big part of the job. This includes good listening skills since it is vital that financial advisors thoroughly understand the goals of their clients. Public speaking also is a factor if financial advisors participate in seminars or workshops to attract new clients.
- Computer skills: Multiple computer programs are available for tracking market data, and financial advisors need to be efficient with any or all of these. Additionally, expert proficiency with spreadsheet software such as Microsoft's Excel is important to the job.
- Salesmanship: Clients need to be convinced that whatever advice they are getting from their financial advisor represents the best strategy for their money. It's the financial advisor's responsibility to be able to show clients why the advice they are giving is the best course of action.
According to the U.S. Bureau of Labor Statistics, job growth for financial advisors is projected to be about 15 percent for the decade ending in 2026. This is more than twice the rate of growth for all jobs on average. The expected growth is due largely to an increase in personal retirement accounts and a decrease in traditional pension funds.
A good portion of the work is spent in an office, analyzing data from a desk. Financial advisors also need to meet with clients and prospective clients, and those meetings can take place in the office or at the homes of clients. Seminars or workshops may require some travel.
For the most part, financial advisors work standard business hours, but some nights and weekends will be required in order to accommodate clients' schedules. Seminars and workshops also are commonly held during evenings or weekends.
How to Get the Job
Degrees in business, finance, or even law are most common.
Financial advisors typically will spend a year or more working under a more experienced advisor.
A CFP credential can be obtained after three years of work, making a financial advisor more marketable.
Comparing Similar Jobs
People interested in working as a financial advisor also might be interested in one of the following professions. Included are median annual salaries:
- Budget Analyst: $75,240
- Financial Analyst: $84,300
- Financial Manager: $125,080
Source: U.S. Bureau of Labor Statistics, 2017