How to Become a Financial Advisor

Become Team
Become Team
October 13, 2021

Most people know they should manage their money wisely—but they don’t always know how to do it. That’s when they turn to financial advisors, who have the expertise to help them. Financial advisors undergo rigorous education and training to attain the certifications and skills necessary to succeed in this career. The path to becoming a professional financial advisor can be direct, or may include a number of twists, turns and side trips depending on past education and experience. This guide provides information to assist in weighing all of the pros and cons—including job duties, salary expectations, degree options, and step-by-step, in-depth instructions to becoming a financial advisor—to help readers decide if this is the right career choice.

What Does a Financial Advisor Do?

Career Basics

Financial advisors help individuals make wise decisions regarding money management. They assess a person’s financial position, understand their needs and goals, and then make recommendations on how to best achieve them. Some financial advisors have diverse backgrounds and provide an array of general services, while others focus on a particular area such as retirement or tax law. Financial advisors work in a variety of settings. Many are employed by large companies focusing on investments, finance or insurance, while others choose to work at a small firm or independently. Self-employed financial advisors are often part-salesmen. They must market their services to attract potential clients, so they spend a portion of their time teaching seminars or networking at various functions after office hours.

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Financial Advisor Salaries and Career Outlook

Financial Advisor Salaries

According to 2014 data from the Bureau of Labor Statistics, U.S. financial advisors earned a mean hourly wage of $51.97, or a mean annual wage of $108,090.

Median wage estimates for financial advisors are as follows:

Percentile Annual Wage
10% $35,500
25% $52,590
50% $81,060
75% $139,350
90% > 187,199

Financial advisors earn the highest wages in the following states:

New York Connecticut Massachusetts Maine Kansas

How does your state stack up? Use the map below to compare financial advisor salary estimates by state:

State

Financial Advisor Job Growth, Prospects and Outlook

Financial advisors are looking at a robust job outlook over the next several years. The U.S. Bureau of Labor Statistics predicts the field will grow by 27% through 2022—nearly double the 14 percent growth rate projected for U.S. occupations on average. This translates into more than 60,000 new jobs in addition to the almost 225,000 that existed in 2012. Aging populations in particular are paying close attention to their finances and seeking investment advice as they near retirement. In addition, more people are becoming savvy to the benefits of smart saving and investing. They recognize the value of a personal financial advisor who can offer the individual attention not typically found with a traditional banker. Because the growing need for services puts more pressure on the time commitments for senior advisors, new entrants into the field should see increased opportunities.

The following states make up the “top ten” list for the most growth:

  1. New York
  2. California
  3. Texas
  4. Florida
  5. Illinois
  6. Massachusetts
  7. Georgia
  8. Pennsylvania
  9. Texas
  10. North Carolina

Select a state below for more information about employment and job growth for financial advisors

Steps to Becoming a Financial Advisor

Step 1
EARN THE RIGHT DEGREE
A bachelor’s degree is required for a career as a financial advisor. Majors in finance, economics, business, statistics or similar fields are acceptable. Financial advisors can be generalists, or they may specialize in one of several areas, including retirement, taxes, estate planning, or insurance and risk management.
Major firms or high-end clients may require their financial advisors to continue their education at the graduate level. Some pursue an MBA program after working in the profession for a number of years and while continuing their full-time employment.
Step 2
Serve as an Intern
Academic instruction in the classroom provides the foundation for learning, but internships offer opportunities for financial advisors to get real-world experience. It’s important for students to attend a school that has forged relationships with financial firms or other companies that can provide training opportunities for students to practice what they have learned, and gain instruction and insight from mentors working in the field.
Step 3
Obtain Certifications and Licenses
Numerous certifications are available for financial advisors, usually after they have accrued three years of work experience. Certification typically requires specialized training or coursework, an exam, and continuing education. At least one of the following certifications is recommended by the National Association of Personal Financial Advisors (NAPFA): Certified Financial Planner (CFP) Personal Financial Specialist (PFS) Chartered Financial Consultant (ChFC) Chartered Financial Analyst (CFA)
Some specialty areas require licensing. For example, financial advisors who want to sell insurance must be licensed in their state as an accredited adviser in insurance. Advisors who focus on investments must register with their state or with the Securities and Exchange Commission (SEC) as a Registered Investment Advisor.
Step 4
Land an Entry Level Job
Check with your school’s career office to identify job leads and obtain help in writing resumes and cover letters. Take advantage of networking with other students, instructors and professional organizations to find employment opportunities and discuss market trends. Finally, don’t neglect social media as an excellent channel for posting resumes and searching for open positions.
Step 5
Return to school
There’s always more to learn—especially in the fast-moving world of finance. Finance laws and strategies are always changing, and advisors must keep up with current trends. Many certifications in financial advising require continuing education, while senior positions often demand an advanced degree. A graduate degree in finance, typically offered as a master’s in finance (MSF) or an MBA with a concentration in finance, can provide a competitive edge.

Finance Degrees and Courses

Finance Degrees at a Glance

Finance degrees range from a two-year associate degree through a doctoral degree that can take several years to complete. Courses can be taken in a traditional campus setting or online. Below is a quick look at each degree level, along with how each will suit a prospective student’s needs.

Educational and Career Goals Associate Bachelor’s Master’s Doctorate Online
Students are exploring a finance career to determine if they want to pursue further education. They learn the basics of finance to attain entry-level employment or to establish a foundation to continue to the next level of education.
Students take thorough coursework to learn how to manage an organization’s money and make investment decisions. Graduates are prepared to take the Chartered Financial Analyst (CFA) or Certified Financial Planner (CFP) exams.
Theory and decision-making are emphasized to prepare students for management positions that involve leading teams of other financial employees, or for positions that involve large projects or clients.
Students receive advanced education for teaching, research, and executive roles. They hone their communication, research, and leadership skills, as well as build on their financial knowledge base.
Regardless of the degree level they want to obtain, these students may not be physically close to a campus offering a finance degree, or need flexibility to manage their work, family, and educational obligations.

According to the National Association of Colleges and Employers (NACE), finance is the #1 degree that employers want.

Detailed Look at Finance Degree Levels

There are four finance degrees available to correspond to students’ career goals and desired education. While each degree builds on the previous level, students may also choose to pursue a finance degree after completing a program in another field, such as economics, computer science, or mathematics. For example, a student with a bachelor’s degree in computer science may want to complement that degree with a master’s degree in finance or a student with a master’s degree in mathematics can hone their skills by pursuing a Ph.D. in finance.

Associate Degrees

A two-year degree option, the associate degree offers students basic knowledge about the world of finance, preparing graduates for entry-level roles or for transfer to a bachelor’s degree program. In addition to introductory courses in finance, students also explore foundational business topics and complete general education in areas such as English composition, math, humanities, and social and behavioral sciences.

Although specific courses vary by school, below is an example of curricula students will likely encounter at this level:

Principles of Finance

Provides an introduction to financial concepts and institutions

Finance Skills & Knowledge Gained

Understanding of the nature of risk Familiarity with sources of financial information Foundational knowledge for more advanced coursework

Money, Banking and Financial Management

Explores the roles of central banks and financial markets

Finance Skills & Knowledge Gained

Overall understanding of the financial system and how the various elements work together

Investments

Provides an introduction to investment markets and portfolio management

Finance Skills & Knowledge Gained

Knowledge of how to evaluate risks and returns

Key Financial Concepts

Explains such terms as present value, future value, compounding and discounting

Finance Skills & Knowledge Gained

Ability to make financial decisions such as determining liquidity and evaluating profitability

Bachelor’s Degrees

The bachelor’s degree in finance program provides a more in-depth understanding of finance, including the dynamics of the stock market as well as domestic and world economies. Students learn how to use computerized financial programs, and work on projects that hone their investment skills. A bachelor’s degree can lead to careers such as financial analyst and personal financial advisor. This degree also prepares students to take the Chartered Financial Analyst (CFA) or Certified Financial Planner (CFP) exams.

Survey of Finance

Focuses on financial systems, investment principles and corporate finance

Finance Skills & Knowledge Gained

Understanding of how to make business decisions and allocate financial resources

Principles of Investment

Explores money markets such as mutual funds, stocks, bonds, and other securities

Finance Skills & Knowledge Gained

Knowledge of how timing, taxes and other factors that affect portfolio management

Financial Institutions Management

Reviews the various functions of financial firms and the regulations that govern them

Finance Skills & Knowledge Gained

Understanding of the dynamics of lending money and managing capital

Computer Modeling of Financial Applications

Explores financial statements, forecasting, and risk

Finance Skills & Knowledge Gained

Computer modeling skills Knowledge of how to analyze various financial situations

Master’s Degrees

Building on the foundation gained as an undergraduate, the master’s degree in finance is ideal for students who want to pursue leadership roles in a business environment. At this level, students develop advanced skills in managing risk and critically evaluating information using financial models and methodologies. A master’s degree may be offered as a Master of Science in Finance (MSF) or a Master of Business Administration (MBA) with a concentration in finance.

Derivatives and Risk Management

Explains derivatives and explores different techniques used in risk management

Finance Skills & Knowledge Gained

Derivatives valuation Knowledge of how to manage risks and investment decisions

Financial Math Programming

Covers financial software programs as well as matrices and calculations

Finance Skills & Knowledge Gained

Ability to use numerical methodologies and computer programming to help solve financial problems

Qualitative Finance

Examines case studies and problem-solving techniques based on subjective methods

Finance Skills & Knowledge Gained

Ability to apply statistical and econometrical tools in finance

Corporate Finance

Explores such topics as dividend and corporate buyback policies and corporate restructuring

Finance Skills & Knowledge Gained

Understanding of the foundations and analysis methods used in various financial theories

Doctoral Degrees

A doctoral degree may be offered as a PhD in Finance or as a PhD in Business Administration with a concentration in finance. The doctorate degree is ideal for those who want to work in an academic setting or assume a financial leadership position at a large organization. The PhD program offers in-depth exploration of new developments in the field such as theory of rational investor portfolio choice and efficient corporate decision-making. Depending on the program, students may be required to participate in regular seminars to gain exposure of developing research. Students will also be required to conduct their own independent research in the form of a dissertation.

After years of rigorous and intense study, PhD graduates gain a wealth of advanced skills that make them experts in the financial field. Some of the most highly sought after skills include:

Research

Students learn how to conduct extensive research into financial theories and best practices. They develop critical thinking skills necessary to delve deeply into a finance topic and analyze data. Graduates will also know how to independently evaluate information in order to reach valid conclusions.

Communication

Students must be able to clearly and effectively relay their findings to colleagues or clients. They learn how to organize information and present it coherently so that it can be easily understood by people with varying levels of financial knowledge. PhD students also learn how to write research studies and articles for publication in reputable financial journals.

Problem-solving

Students learn how to analyze potential roadblocks and formulate solutions. Leveraging their keen knowledge of financial theories and systems, they are able to offer guidance and direction to team members and clients to help them make low risk, high benefit financial decisions.

Teaching and leadership

In addition to corporate skills, students learn the teaching skills necessary to instruct other students at universities, colleges, and professional schools or to lead a team of advisors. They become proficient in determining the best teaching methods for a particular student population; develop curricula, instructional plans and exams; and learn how to assess and evaluate student progress.

Ethics

Students develop a personal ethos and commitment to operate legally and ethically in their financial dealings. This includes fully disclosing information that would present a conflict of interest; being honest, open and fair; and maintaining confidentiality.

Online Finance Programs: What to Look For

Some students live too far from a school that offers an appropriate finance degree or need flexibility in their educational schedule. When on-campus education is not possible, prospective students may find that online learning is an ideal choice. However, students investigating online finance programs should consider the following criteria:

Accreditation

One of the most important criterion for any finance program--online or on-campus--is its accreditation status. Accredited programs have received a stamp of approval from a respected overseeing organization, verifying the quality and integrity of the program. Additionally, accreditation determines such factors as the student’s ability to transfer credit hours to another school and to receive financial aid. Finance programs should be accredited by such organizations as the Association to Advance Collegiate Schools of Business (AACSB) or the Distance Education Accrediting Commission (DEAC).

Ability to Transfer Credits

Even if they complete coursework through an accredited school, students should not assume those credits will automatically transfer to another institution. Unfortunately, non-transferrable credits mean wasted time and money, since students would be obligated to retake courses at their new school. It’s best to check with known, reputable schools well in advance to see if they will accept finance degree transfer credits from the prospective school’s program.

Quality Faculty With Relevant Experience in Finance

The overall quality of a finance program goes hand-in-hand with the quality of the faculty. Most schools post faculty biographies on their websites, with information on the education and work experience of their professors and other instructors. This information can help students determine if faculty members have sufficient educational background, credentials, and professional experience. Students should look for faculty who have worked in relevant careers such as financial analysts, financial managers, bank executives, and insurance underwriters. The faculty should also have experience in corporate finance, mergers and acquisitions, insider trading, etc. Publication in respected journals such as the Journal of Portfolio Management, Journal of Risk and Assessment, Journal of Financial Management, and Journal of Banking and Finances are another indicator of prior experience and success.

Rigorous and Relevant Curricula

The curricula should offer relevant finance degree courses covering the principles of finance and key financial concepts. While specific classes may vary by school, the program should offer coursework in such subjects as investments, accounting and statistics for financial analysts, financial management, and analysis of financial statements. Courses should be designed to help students hone such skills as critical thinking and decision-making.

Opportunities for Practical Experience and Job Placement Services

In addition to academic work, a school’s finance program should also offer opportunities for students to gain real world experience, such as through an internship. While no degree can guarantee a job, the program should have an active and effective job placement program, allowing students access to companies that hire finance degree graduates.

Components of a Successful Career as a Financial Advisor: Skills, Credentials, Tools and Technology

Financial Advisor Skill Set

Financial advisors possess a wide range of business and marketing skills. The ability to analyze and organize data is a virtual must, while a strong grasp of mathematics helps with accurate and extensive number-crunching. Critical thinking skills are necessary to spot trends, evaluate the pros and cons of a particular course of action, and make changes when necessary.

Communication skills are vital. Financial advisors work with a variety of people who have different financial backgrounds and levels of knowledge. Advisors must be able to present complicated information and explain technical jargon in understandable terms. Finally, they must engender trust with their clients and adhere to the industry’s set of ethical standards, including integrity, objectivity, fairness and confidentiality.

Financial Advisor Credentials

Certifications identify a financial advisor as having met rigorous competency, ethical, and professional standards. Some are general certifications, while others represent specialty areas. Certified Financial Planners, Personal Financial Specialists and Chartered Financial Consultants are all qualified to provide overall financial services. A financial advisor might also choose one of the following specialties:

Certified Estate and Trust Specialist: Focuses on estate planning and asset allocation Accredited Retirement Advisor: Specializes in financial planning for older individuals Accredited Tax Advisor: Earns qualifications to navigate sophisticated tax planning issues Certified Private Wealth Advisors: Works with clients with high-net worth portfolios

Tools and Technology for Financial Advisors

Financial advisors will appreciate an amicable relationship with their keyboard and mouse, because there are an array of specialized software programs designed to help advisors their particular tasks, including the following:

Finance Logix Retirement Planner, financial analysis Financeware Finance File Manager, a document management program Web Information Solutions Pocket Informant, customer relationship management Microsoft Excel, spreadsheets

Related Careers in Finance

What You Need to Know About Related Careers

The field of finance is vast. Each career varies in its typical salary, growth rate, and required training. Here’s how it stacks up:

16%

Median Salary:

$76,620

Salary 10th Percentile

$48,170

Salary 90th Percentile

$154,680

Education and Training:

Bachelor’s degree

11%

Median Salary:

$72,070

Salary 10th Percentile

$32,170

Salary 90th Percentile

>$187,199

Education and Training:

Bachelor’s degree

9%

Median Salary:

$155,320

Salary 10th Percentile

$62,480

Salary 90th Percentile

>$187,199

Education and Training:

Bachelor’s degree

6%

Median Salary:

$76,310

Salary 10th Percentile

$44,660

Salary 90th Percentile

$146,190

Education and Training:

Bachelor’s degree

13%

Median Salary:

$65,940

Salary 10th Percentile

$40,850

Salary 90th Percentile

$115,950

Education and Training:

Bachelor’s degree

26%

Median Salary:

$86,700

Salary 10th Percentile

$58,080

Salary 90th Percentile

$180,680

Education and Training:

Bachelor’s degree

14%

Median Salary:

$95,710

Salary 10th Percentile

$50,440

Salary 90th Percentile

$170,780

Education and Training:

Master’s degree

19%

Median Salary:

$80,880

Salary 10th Percentile

$45,360

Salary 90th Percentile

$148,110

Education and Training:

Bachelor’s degree

What Do Related Careers Make?

Financial advisors typically work with individual clients, but other jobs in the finance field can draw on a variety of skills and personal preferences—from analyzing consumer trends to studying the fluctuations of the stock market to managing corporate finances. Finance professionals have plenty to choose from to match their areas of interest or expertise.

Related Careers at a Glance

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