The job outlook for financial planners, professionals who help clients build long-term strategies for retirement and meet other financialgoals, appears strong. According to the U.S. Bureau of Labor Statistics, jobs in this area are projected to grow 13% from 2022 to 2032.Here are the basic stages of a financial planner’s career path,from learning the ABCs of budgeting to running a firm.
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Learning the Basics
Most financial planners start their careers with a bachelor’s degree in a business or finance-related area, but many hold bachelor’s degrees in other areas, such as social sciences orhumanities. In an entry-level financial planner role, you’ll likely be serving as a junior associateat a big advisory firm, a smaller boutique advisory firm or elsewhere in the financial servicesindustry. In this role, you’re likely to spend most of your time supporting and learning fromhigher-ranking coworkers and mentors.
According to the CFP Board of Standards (CFPBS), this is the time to soakup all the knowledge you can related to financial planning, investing, budgeting, taxes, riskmanagement and estate planning, as well as master the firm’s software and other technologicaltools.
Gaining Technical Skills
Once you have a sound, basic understanding of what it means to be a financial planner, you’llmove to more of an intermediate role. At this point, you’ll begin to put your knowledge to useby working directly with clients while continuing to assist senior coworkers with their clients.
According to the CFPBS, during this phase you’ll be busy mastering the financial planning process and
honing your client communication skills. After all, financial planning is full of complexity andnuance, and being able to explain your strategies in layman’s terms will be essential.
Getting Certified
During the third stage of your financial planning career, your goal should be to obtain your official CERTIFIED FINANCIAL PLANNER™ (CFP®) designation. Not only does the CFP® demonstrate your expertise and commitment to the field, it can open new opportunities for you in the industry.
But why you would wait so long to get yourCFP® rather than starting your career with it? The answer is that the CFP® certification requires notonly an educational program that takes an average of 12-18 months to complete, it also requires either4,000 hours of apprenticeship experience or 6,000 hours of relevant professional experience.
Besides the coursework and required hours of experience, the CFP® certification also requires you to pass a170-question test and a background check, and also sign an agreement to adhere to a strict code ofethics. So, you’ll probably be a few years into your career before you finally get to add thoseletters to your email signature.At this point in your career, you’ll likely have your own roster of clients while still supportingsenior team members with their clients. You’ll be honing your skills in client relationships,learning how to manage a team and building your reputation as a subject matter expert.
Thinking Strategically
Once you’ve gotten your CFP® and have several years of experience under your belt and thorough expertise in your field, it’s time to learn how to see the big picture. You will need tolearn important managerial skills, how to bring in your own clients and contribute to your firm’s strategy.It’s at this phase of your career that “soft” skills become essential. Not only will youneed to be able to attract and cultivate desirable new business, you’ll also have increasedresponsibilities in managing junior team members.
Around this point, you may think of striking out on your own and opening your own practice.Whether you take the entrepreneurial path or continue to climb the ladder at a firm, the basicskills you’ll develop will be the same: a thorough understanding of strategic planning, revenueresponsibility and business development.You may also consider getting your master’s degree in finance or business administration.While this isn’t necessary for a long and successful career, it may help you ascend the ladderfaster and appear more knowledgeable to prospective clients.
Being a Leader
At this point, you’ll be at the top of the ladder, flexing your deep, specializedknowledge with clients, training up-and-coming financial planners and setting firm strategy.These years will be spent making sure your firm continues to grow and prosper bystrengthening your relationships with existing clients and team members and developing newones.
You’ll be careful to show unimpeachable judgment in your work and personal life. Your goals during this phase of your career should be to continue to build your reputation as a leading expert in your field while giving back to the next generation of financial planners bymentoring and coaching them to success.
Here’s a table, from the CFP Board of Standards, that summarizes these five common steps:
Summary of a Financial Advisor’s Career Path
| Career Stage | Common Titles | Time Frame |
|---|---|---|
| Learning the basics | Analyst, consultant, support advisor, senior analyst | Up to 3 years |
| Gaining technical skills | Associate advisor, paraplanner, associate, senior associate, consultant, associate financial planner | 2-5 years |
| Getting certified | Service advisor, associate wealth manager, associate investment advisor, investment advisor, advisor, financial advisor, financial planner, planner, director | 3-7 years |
| Thinking strategically | Lead advisor, managing director, senior advisor | 5-10 years |
| Being a leader | Principal, partner | 7 or more years |
A financial advisor is a great career path for someone who wants to use both analytical skillsand so-called soft skills. Financial advisors should have an aptitude for math and the ability to determine the best courseof action for their clients. However, they also need to be excellent at building trust with clients andcommunicating complicated financial concepts in a way that anyone can understand. Each financial planner’s career takes a unique course, but there are five common steps or phases of development in this profession.
Bottom Line
A financial planner’s career path has five distinct phases that lead from learning the basics ofthe industry from mentors to becoming a subject matter expert and a mentor yourself. You’lllikely need a bachelor’s degree to get started and will likely work to earn your CFP designationover the first few years of your career. Once you’ve mastered both the technical andinterpersonal skills necessary for success, you might consider striking out on your own – orstaying at a larger firm and continuing to climb the ladder.
Tips for Growing Your Financial Advisory Business
- Let us be your organic growth partner.SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
- Get out and attend conferences. SmartAsset’srecent surveyrevealed that over 60% of financial advisors attend conferences. The Schwab IMPACT conference and the Financial Planning Association’s annual conference were expected to be the most popular events in 2023, according to the survey.
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