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How to become a financial planner

Financial planner looking through finance data

By Cooper Nelson

At a glance

  • Financial planners and financial advisors are professionals who help individuals and organizations manage their wealth in the short and long term. 
  • Financial advisors typically need at least a bachelor’s degree to enter the profession but may choose to pursue a master’s degree to become a financial manager.
  • After earning a bachelor’s degree, financial advisors may choose to pursue an industry certification to become a Certified Financial Planner (CFP®).
  • If you’re eager to build skills in finance, check out online business and accounting degrees and programs at University of Phoenix!

Guide to becoming a financial planner

Financial planners, sometimes referred to as financial advisors, help people manage their money so that they can meet their money-related goals. As a financial advisor, you may help clients take steps to meet financial needs while growing wealth and selecting investments. Some people hire a planner because they need assistance with specific tasks, such as saving for their children’s college education or funding and managing retirement accounts.

This career requires both finance-related skills and softer skills to better client relationships while simultaneously helping them understand how to manage their money.

Before we dive into skills and education needed for this profession, let’s define how a financial advisor is different from a planner. While both roles fall under the broader category of professions in the finance field, there’s a slight difference in nomenclature. A financial advisor usually provides help with short-term issues, while a planner focuses more on a long-term plan. These can often be used interchangeably and may be multiple people or a single professional. 

Skills needed to be a successful financial planner

Here are some of the key skills to possess in the field of financial planning:

  • Analytical — You will need to analyze financial markets and asset-buying opportunities so that you can give clients good investment advice. You also need the ability to interpret each customer’s needs and select investment portfolios that best match their goals, risk tolerance and budget.
  • Communication — You will work directly with clients, meeting with them face-to-face, over the phone, via email and text, or virtually. Communication skills are essential. You not only need to express yourself clearly and explain complex financial plans simply, but you also need to listen to clients and ask questions to get information to define their requirements and goals.
  • Interpersonal — Financial planners need to be affable and trustworthy. A big part of the job is interacting with clients, who are more likely to continue using your services if they feel a personal connection.
  • Problem-solving — Many clients will not have straightforward financial situations, or they will experience unexpected challenges that could throw their saving and investment plans into disarray. When this happens, it’s your job as their financial planner to find solutions that allow them to adapt without damaging their budget or delaying their goals.
  • Research — Financial planners need to constantly research investment opportunities and financial markets. Your clients rely on you to have insights to advise them on investments. Since economic factors and financial markets are constantly in flux, the research aspect of the job will be ongoing.
  • Math — Crunching numbers is an important aspect of this profession. Financial advisors need to have a strong grasp of math principles to help assess the performance of their clients’ portfolios.  
  • Sales — Similar to the importance of communication and interpersonal skills, sales skills are an important part of this role. A financial advisor not only has to sell their services to a client, but they might also sell packaged securities.

Developing these abilities through a combination of education and job experience is necessary to become a financial planner. Your career path typically starts with a college degree, but you also need to find opportunities to gain real-world understanding along the way.

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Education needed to be a financial planner

A strong educational background is necessary since your decisions will directly impact the finances of your clients. Financial advisors without solid financial knowledge can adversely affect their clients’ lives, plans and goals.

Personal financial advisors typically need at least a bachelor’s degree in areas like finance, math or business, according to the U.S. Bureau of Labor Statistics (BLS). It can be helpful to have taken classes in areas like investments, financial planning and risk management. Other undergraduate options can include a bachelor’s in accounting or finance. These programs will give you a solid, but broad, knowledge base to build your career.

Those wishing to enhance their career may choose to pursue a master’s degree or a professional industry certificate or certification. A master’s degree can help provide the educational foundation to pursue a role as a financial manager and may also help to attract new clients. 

One example is a master’s in business administration (MBA). MBAs are valuable for financial planners because they have a broader scope than a master’s in finance. This additional knowledge can be helpful because you will deal with clients with a wide range of financial goals and needs. Some clients will have business interests, property and other assets that are beyond the scope of what you may learn in a finance degree program. 

Another educational option is a graduate certificate in finance. This is a shorter graduate-level program that focuses on specific aspects useful in financial planning, such as budget analysis, risk management and how to spot investment opportunities. Such graduate certificates are different from MBAs because they typically take less time and focus on developing specific skills and knowledge. An MBA program takes longer but provides a broader overview of fundamental business concepts. 

However, if you’re focused on time, gaining a bachelor’s degree in business with a certificate in financial planning is an option. A solid base in both general business concepts and financial knowledge and skills can help equip you to professionally manage clients and their finances.

Additionally, professionals may opt for an industry certification instead of, or in addition to, a master’s degree. Certification can be a selling point for clients and is necessary to become a Certified Financial Planner (CFP®). The CFP certification is offered by the Certified Financial Planner Board of Standards and can be earned only after graduating with a bachelor’s degree, passing an exam and agreeing to the CFP Board’s code of ethics. 

How to gain experience as a financial planner

BLS suggests that on-the-job experience is vital for new financial planners. Some aspects of the job, such as interacting with clients and building relationships, can be learned only through experience.

Since mistakes can be disastrous for clients’ finances, financial planners cannot learn by trial and error. Instead, they develop experience through internships, volunteer opportunities and on-the-job training.

It’s possible to gain an internship during your undergraduate or graduate-level studies. This will add an element of real-world experience to your education.

The next step could be to volunteer. As a financial planning volunteer, you can provide pro bono financial advice to clients. This will allow you to put your skills to use and to develop communication and relationship-building abilities. Such opportunities are typically only available if you already have educational qualifications.

Finally, many financial planners start their careers by shadowing more experienced professionals. In an entry-level role, you may assist with research and analysis and perform specific tasks if directed to do so by a senior planner. BLS estimates that this shadowing term can last more than a year.

This real-world experience, combined with a business degree, helps develop a solid foundation from which to launch your career. 

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Job outlook for financial planners

Demand for personal financial advisors is projected to grow 15% between 2021 and 2031, according to BLS. That translates to an estimated 30,500 job openings each year through 2031.

Robo-advisors, which use algorithms to automatically suggest investments for clients, are becoming popular because of their relatively low cost. However, their usefulness is limited, and people will still seek out in-person services for more-complex financial matters, such as handling real estate, life insurance policies and taxes.

Financial planning can also pay well with the right mix of education, skills and opportunity. As of May 2021, BLS reported that financial planners earned between $47,570 and $208,000.

A majority of financial planners can work for investing or financial services companies. However, 20% are self-employed and others work for insurance providers and credit counseling services.

Financial planners interact directly with people and can find the ability to make a positive impact on their clients’ finances rewarding. However, both education and real-world experience are necessary to be successful in this career.

The 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.

Earn an online degree or certificate from University of Phoenix

If you’re interested in pursuing a career as a financial advisor, University of Phoenix (UOPX) can help build skills in this field. UOPX offers online degrees and programs in business and accounting, including certificates in financial planning. Check out the following list of relevant programs!

 

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