Become a Financial advisor to help clients save money for the future and make wise investment decisions, so pursuing a career in this field is achievable. Finding a firm, obtaining a license, and beginning to develop a book of business are the requirements to becoming one.
Whether you are interested in becoming a financial advisor or not, these are things you should know:
What Does a Financial Advisor Do?
A financial advisor is a practitioner who helps a client with investment, insurance, and other monetary planning issues. They support their clients in establishing financial objectives and coming up with plans to achieve them.
Financial advisors would not only advise the client on investments but also plan with the client for retirement, help manage taxes, and even assist in big life changes such as marriage or a new baby.
Responsibilities of Financial Advisors
Financial advisors have several jobs, all contributing to helping their clients fulfill money goals. One of the more important jobs is looking at investments and plans. It entails keeping up with trends and knowing how different investments work and when it is smart to buy or sell.
Another vital role is seeing clients. This has allowed advisors to hear their clients, understand the money situation they are in, and figure out what they need. After this, using such information, advisors will aid clients in identifying what investment or plan suits them best.
Types of Financial Advisors
Most financial consultants are, after all, more like stock brokers. They have basic knowledge about finance and the license that enables them to help clients pick their securities and investment plans.
But there are also advisors with special skills. A few financial planners assist their customers in creating thorough financial plans. Their wards include those investment advisors managing clients’ money and also analysts looking at specific stocks.
Some main categories of financial advisors include:
- Certified financial planner (CFP). A CFP is someone who passed through a rigorous certification process and must have passed very tough tests. As such, their objective is to develop detailed financial plans for clients.
- Chartered Financial Analyst (CFA). This is an accepted financial expert in the CFA Institute whose commitment is to determine the securities that investors buy and sell.
- Registered Investment Advisor (RIA). An organization that hires financial advisors and is registered with the Securities and Exchange Commission of the United States or the securities regulators of individual states is known as a Registered Investment Advisor. RIA professionals are allowed to make investment decisions on behalf of their clients.
- Chartered Financial Consultant. An advisor who is certified by The American College of Financial Services, specializing in all forms of financial planning consulting with clients in solving all related problems.
Financial Advisor Licenses
FINRA offers various categories of financial advisor licenses. Each type of license allows the advisor to provide services of a different nature for his clients. Each license has its prerequisite, but all these licenses require an exam together with the completion of continuing education.
Advisors that hold these five licenses can provide a wide range of services:
- Series 7: General Securities Representative Qualification Exam Pass it, and you will become a stockbroker or security trader. The primary exam that registered representatives have to pass is this one. Your company must be a member of FINRA in order to be accepted.
- Series 6: Look into the representatives of investment firms and variable contracts. This is also an open-book exam, like the Series 7. It lets one sell mutual funds and variable annuities.
- Series 63: Selling securities in the majority of states necessitates passing the Uniform Investments Agents State Law Examination, an additional test. This license in addition to the Series 7 license is mandatory for securities salespeople in many states.
- Series 65: Uniform Investment Advisor Law Examination Pre-requisite for becoming an investment advisor representative Anyone who wishes to provide investment advice and subsequently manage clients’ investments.
- Series 66: An exam for state law is created by combining the Exams 63 as well as 65 of the Series. Passing the test allows an investment advisor representative to recommend investments and sell securities in most states.
How to Become a Financial Advisor
Typically, to become a financial advisor, one needs to clear an exam, finish training tailored to the industry, and obtain licenses. If you think you’re ready for a career in finance, think about what it takes to become a financial advisor and take the following actions:
1. Get a job
Now is the time to think of your first employment job as a financial advisor after getting a position in a company that will help you obtain the license. A few companies hire people with no background whatsoever in finance and train them to be financial advisors. Most of these recruitment companies seek out individuals with extremely strong selling skills. If you have a selling background, make sure to include it as part of your resume, but never hesitate to proclaim it in an interview.
2. Complete necessary licensing exams.
If you want to start working as a financial advisor, then one of the important steps in that career is passing the necessary licensing exams. In most cases, this involves passing the FINRA Series 7 Exam, and other licensing exams will depend on the products and services you will offer. For example, to become licensed to sell securities in most states and to be licensed as an advisor in regards to securities to your clients, a person must pass the FINRA Series 66 Exam.
3. Run a Background Check
When applying to become a new financial advisor, you should be ready for a background investigation. The firm will most probably be able to help facilitate this process, however, it might take several weeks, or your hands may be tied about what you will be allowed to do. For instance, you may be restricted to only working under a fully licensed broker or not even be authorized to generate your client base before your background check is cleared.
4. Develop a Book of Business
Any financial advisor will tell you that you simply cannot have a good book of business without a good list of clients. “Book of business” refers to your clients-that is, the people or businesses you give advice and financial help to. Anything good relationships include requires putting in effort to build and maintain the relationship.
Here are some quick instructions for:
- For a fact, always offer the best service. Your clients should feel that they are the most important, and you always care about what is best for them.
- Listen to what your clients want. They must feel they can contact you anytime and that you will return to them with a speedy reply.
- Build relationships with other people in your job. These connections can help you send clients to others and receive clients in return, helping both of your businesses grow.
5. Keep Up with Ongoing Learning
From here on, once the financial advisors have obtained their licenses, the firms and regulators control them strictly in continuing to hold onto their licenses. Among the rules are continuous education courses and tests to be taken frequently. While all that might take so much time, generally it isn’t hard and worthwhile to have financial advisors kept up-to-date on the latest regulations and best practices.
What is the duration required to become a Financial Advisor?
You could visit a company and receive a qualification in less than 30 days. However, for serious individuals who want to practice as financial advisors, the time is expected to be in months of study and preparation before getting licenses, plus subsequent months or years to get more additional licenses or special certifications.
Before Become a Financial Advisor, There Are Several Considerations
Consider the following things before you decide to become an investment advisor. First is whether you have the right personality to work in this field. Handling irate and angry clients is part of the job, which can be quite stressful. In addition, advisors have to cope with rejection since most clients will not act according to the counsel they receive.
Another thing you must be sure of is that you are qualified and knowledgeable enough. An advisor has to be very conversant with financial concepts and, therefore, able to explain them in simple words. They also need to be fine with using industry tools because most parts of the job are done online nowadays.
Some of the things that you should be expected to know before you choose to become a financial advisor include the facts that you will:
- Be somewhat restricted. As a registered financial advisor, all the communications you make in writing to the public have to be approved and reviewed by your organization’s compliance department, so that’s a pretty good degree of limitation on what you can say to clients or prospective clients.
- Focus on sales. Many financial advisors are paid by their sales, or the amount of money they control, a typicālly called AUM. If you intend to be one of the advisors, then get used to being paid according to your sales.
- That is why you owe the concern to your clients. As an advisor, a financial advisor, your clients’ needs are bigger than yours. If you cannot or will not make decisions or give guidance to clients without considering yourself then perhaps you should consider doing something else.
Is Becoming a Financial Advisor Right for You?
Being a financial advisor offers a very rewarding career path that empowers people to make proper investment decisions and save for the future. However, certainly not a profession suited to everyone.
They need to manage all types of customers who are worried or depressed about their financials. They also need to be at ease with the management of numbers and be soundly well-read about finance-based knowledge. Finally, financial advisors need to be disciplined and organized to track the accounts of their customers.
You could be a financial advisor if you want to assist people with their money and are willing to put in the efforts needed in this field.
