How to become a financial advisor

A financial advisor uses knowledge of investments, risk management and financial markets to help clients make short- and long-term wealth management decisions. They can work with individuals or businesses. In addition to helping develop a financial plan and providing financial advice, some financial advisors help manage a client’s investment portfolio.

Advisors provide personalized services based on their clients’ needs. Their duties vary day to day depending on their current customers’ financial situation and goals. Here are the services advisors usually provide. 

• Investment advice: Offer advice and manage portfolios based on clients’ financial goals, risk tolerance and interests. Though advisors offer advice, purchasing and selling decisions usually lie with the clients unless they specifically request management services. 
• Tax planning: Help minimize tax liabilities and optimize returns based on current assets and income. 
• Estate planning: Help with Inheritance planning so clients pass wealth on to beneficiaries through a will, trusts and other investments. 
• Retirement planning: Offer guidance to help clients develop a financial plan to save for retirement. 
• Risk management: Help clients manage investment risks, diversify portfolios and navigate complex challenges, like bear markets and inflation. 
  

Though these professionals focus on the needs of their clients, some of their daily tasks are the same regardless of the nuances of their job. 

• Consulting with clients to understand their financial goals, histories and obstacles to find information to create customized plans. 
• Staying on top of financial markets. They conduct financial analysis and track market trends with a focus on how the economic climate will affect their clients’ holdings. 
• Continuing to learn about new regulations, tax laws and changes in major industries. All these factors directly affect their clients. 
• Communicating with clients and providing education on financial matters. This aspect of the job is challenging because it often requires making complex concepts simple for non-experts. 
• Maintaining client relationships by communicating with clients and building trust. 

These duties require a diverse range of technical and soft skills that advisors develop through education and experience. 

According to U.S. Bureau of Labor Statistics (BLS) information on how to become a financial advisor, a bachelor’s degree is necessary. The agency also states that a master’s degree and professional certification could increase chances of advancement. 

Advisors often start with an undergraduate degree in business or finance. A mathematics or accounting degree can also provide a knowledge base for those interested in finance careers. 

In addition to providing the knowledge base necessary for this career, a bachelor’s is necessary for some credentials, such as Certified Financial Planner (CFP) certification. 

Financial advisors need analytical abilities and interpersonal skills. These requirements necessitate a diverse skill set. Here are some key traits of this profession:

• Analytical skills: Advisors must examine market trends, investment performance and risk profiles to create strategies to present to clients.
• Problem-solving: The financial world is unpredictable. On top of that, advisors often need to work with clients in challenging financial situations. They need to find ways to fix issues and put their clients on the correct track. 
• Communication: The ability to explain concepts and financial plans is essential because it builds client trust and helps them understand financial decisions. 
• Time management: Most advisors handle multiple clients, and they have to examine financial data and stay current on market movements while providing responsive service to customers. The job often involves prioritizing and multitasking. 
• Ethics: These professionals need to work in the best interest of their clients and should always be transparent about decisions and advice.
• Empathy: Understanding clients’ emotions is crucial for this job. Advisors need to understand clients’ situations and offer support in difficult financial situations. 

Some of these skills come directly from work experience. In fact, some industry certifications place as much importance on experience as academic credentials. 

In the resource about becoming an advisor cited above, BLS notes that most professionals in the field gain experience by taking an entry-level position in a firm. In this job, they work alongside a seasoned advisor. They may learn the ropes and then deal with clients directly with oversight from the senior advisor. 

CFP certification, one of the most common credentials, requires at least three years (or 6,000 hours) of professional experience before sitting for the exam. University of Phoenix does not educationally prepare for this certification exam.

Some financial advisory firms offer apprenticeships that typically last for two years or 4,000 hours. These jobs qualify employees for CFP certification if they also pass the exam. 

BLS says CFP certification enhances reputation and could bring new clients. However, this certification is not required. 

As of May 2023, it was reported that personal advisors earned between $48,730 and $239,200 annually, with a median wage of $99,580, according to BLS. Pay depends on experience, academic credentials, certification and skills. Geographic location also played a part in salary expectations. 

Advisors get paid in two ways. They earn a salary, and some get a commission if they sell investment products to clients. Commission-earning sales require registration with the Securities and Exchange Commission. Advisors selling insurance products may need to register with their state. 

Salary ranges are not specific to students or graduates of University of Phoenix. Actual outcomes vary based on multiple factors, including prior work experience, geographic location and other factors specific to the individual. University of Phoenix does not guarantee employment, salary level or career advancement. BLS data is geographically based. Information for a specific state/city can be researched on the BLS website.

BLS projects 13% job growth for financial advisors from 2022 to 2032, much faster than the average for all occupations. This statistic highlights the growth potential of the finance sector. 

Though this career requires academic qualifications and extensive on-the-job experience, it is potentially rewarding, with advisors having a direct impact on the finances of their clients.

BLS Occupational Employment Projections, 2022-2032 is published by the U.S. Bureau of Labor Statistics. This data reflects BLS’ projections of national (not local) conditions. These data points are not specific to University of Phoenix students or graduates.