Exploring the role of a financial planner is essential before delving into the specifics of becoming one. Financial planners are professionals who aid individuals and organizations in effectively managing their finances. While some finance experts, such as risk analysts and investment bankers, concentrate on corporate, government, and nonprofit entities, financial planners primarily cater to individuals and families.

What is a Financial Planner?

A financial planner is a professional dedicated to assisting clients in reaching their financial objectives. Operating within the financial sector, these experts provide guidance to individuals or businesses in financial planning and asset management. Their services encompass various aspects such as investment advice, tax planning, estate planning, funding for education, and retirement planning.

Financial Planner Salary and Career Growth

Financial planning careers are renowned for their promising salary prospects, and this holds true for financial planners as well. As per data from the U.S. Bureau of Labor Statistics (BLS), personal financial advisors boast a median annual income of $95,390, surpassing the national median salary for all occupations, which stands at $46,310.

Furthermore, the BLS anticipates favorable career growth for these professionals, forecasting a 13% increase in job opportunities from 2024 to 2032. This growth rate, four times the national average, reflects the ongoing need for retirement planning guidance among the aging population, particularly as traditional pension plans decline. Additionally, the escalating costs of higher education necessitate comprehensive financial planning for college expenses, further driving demand for financial planners.

While automation has streamlined certain investment services tasks in the finance sector, the multifaceted and often nuanced nature of financial planning underscores the continued necessity of human professionals in the field.

What’s the Difference Between a Financial Advisor and a Financial Planner?

Distinguishing between financial advisors and financial planners can sometimes be unclear, as the job titles are frequently used interchangeably. Both professionals offer guidance on financial matters to individuals and entities. However, "financial advisor" encompasses a broader spectrum and includes not only financial planners but also other specialists like stockbrokers and estate planners.

In general, financial planners tend to adopt a more holistic approach compared to financial advisors. Planners often engage with clients over the long term to craft and oversee comprehensive financial strategies, whereas advisors may concentrate on particular transactions or specialize in narrower areas such as investment management.

How to Become a Financial Planner in 6 Steps

If you want to become a financial planner, you'll need a mandatory license and optional degrees or certifications before getting a job in the field.

Earn Your Degree

Obtaining a degree is not a strict requirement for becoming a financial planner, as even a high school diploma suffices. Nonetheless, having a bachelor's degree in fields like business administration or finance can prove advantageous when venturing into financial planning.

A bachelor's degree in finance, business, or economics aligns well with the path to becoming a financial planner. These undergraduate programs typically span four years. Additionally, some institutions now offer specialized bachelor's or master's degrees tailored specifically to financial planning, providing further avenues for aspiring financial planners.

Explore the Field

Delving into the field, financial planners engage with both individual and corporate clients, operating within various entities like banks, investment firms, or mutual fund companies.

Financial planners typically offer two key services: financial planning, assisting clients in managing their finances and preparing for retirement, and asset management, involving a discretionary role in asset management. From a corporate perspective, financial planners may aid small businesses in fund management or establish retirement plans for employees.

Daily responsibilities encompass:

• Assessing and evaluating clients' financial data
• Conducting remote or in-person meetings with existing clients
• Expanding clientele through networking and promotional efforts
• Collaborating with fellow advisors
• Administrative duties
• Pursuing ongoing education and certifications for professional development.

Get Licensed 

Attaining licensing is a pivotal step for financial planners to offer advice to clients. These licenses are typically obtained through the Financial Industry Regulatory Authority (FINRA). Before securing a position as a financial planner, acquiring these licenses is essential. However, the specific licenses required can vary based on the specific role and responsibilities a financial planner intends to undertake.

Get to Work 

Securing employment as a fledgling financial planner can pose challenges. While launching your own venture is an option, attracting clients without prior financial planning experience can be daunting. Typically, aspiring financial planners initiate their careers by joining established firms in supporting roles. Through mentorship and familiarity with the industry, opportunities may arise to transition into client-facing positions on a full-time basis.

Consider Certificate

Considering certification can be advantageous for aspiring financial planners seeking career advancement. While not mandatory, certifications like the Certified Financial Planner (CFP) designation are widely recognized and respected in the field. Comparable to the Certified Public Accountant (CPA) exam for accountants or the bar exam for attorneys, obtaining the CFP certification typically takes 18 to 24 months. A bachelor's degree is a prerequisite for the CFP, but it can be earned up to five years after passing the exam. Additionally, there are various other certifications available, each serving as a testament to your expertise and ability to assist clients effectively.

Enhance your Education

Enhancing your education with a master's degree could be a valuable option to explore. A Master in Finance program is tailored for financial professionals, providing advanced coursework in finance. Moreover, some institutions offer specialized Master of Science programs focused on financial planning. However, it's essential to weigh the potential benefits against the investment of time and resources before making a decision.

In conclusion, becoming a financial planner entails a multifaceted journey that involves education, licensing, practical experience, and possibly certification. While there may be no singular path to success in this field, the outlined steps provide a comprehensive guide for aspiring financial planners to navigate their career development. By obtaining the necessary qualifications, gaining practical experience, and continuously expanding their knowledge, individuals can position themselves for a rewarding career in financial planning.

Secure your financial business with our Professional Insurance. Click Here to get Free Quote!