Personal financial advisors typically do the following:

  • Meet with clients in person to discuss their financial goals
  • Explain the types of financial services they provide to potential clients
  • Educate clients and answer questions about investment options and potential risks
  • Recommend investments to clients or select investments on their behalf
  • Help clients plan for specific circumstances, such as education expenses or retirement
  • Monitor clients’ accounts and determine if changes are needed to improve the performance or to accommodate life changes, such as getting married or having children
  • Research investment opportunities

Personal financial advisors assess the financial needs of individuals and help them with decisions on investments (such as stocks and bonds), tax laws, and insurance. Advisors help clients plan for short- and long-term goals, such as meeting education expenses and saving for retirement through investments. They invest clients’ money based on the clients’ decisions. Many advisors also provide tax advice or sell insurance.

Although most planners offer advice on a wide range of topics, some specialize in areas such as retirement or risk management (evaluating how willing the investor is to take chances and adjusting investments accordingly).

Many personal financial advisors spend a lot of time marketing their services, and they meet potential clients by giving seminars or through business and social networking. Networking is the process of meeting and exchanging information with people, or groups of people, who have similar interests.

After financial advisors have invested funds for a client, they and the client receive regular investment reports. Advisors monitor the client’s investments and usually meet with each client at least once a year to update the client on potential investments and to adjust the financial plan based on the client’s circumstances or because investment options may have changed.

Many personal financial advisors are licensed to directly buy and sell financial products, such as stocks, bonds, annuities, and insurance. Depending on the agreement they have with their clients, personal financial advisors may have the client’s permission to make decisions about buying and selling stocks and bonds.

Private bankers or wealth managers are personal financial advisors who work for people who have a lot of money to invest. These clients are similar to institutional investors (commonly, companies or organizations), and they approach investing differently than the general public does. Private bankers manage a collection of investments, called a portfolio, for these clients by using the resources of the bank, including teams of financial analystsaccountants, and other professionals.

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Work Environment

Personal financial advisors held about 249,400 jobs in 2014. The largest employers of personal financial advisors were as follows:

Other financial investment activities 29%
Securities and commodity contracts intermediation and brokerage 23
Credit intermediation and related activities 16
Management of companies and enterprises 3
Professional, scientific, and technical services 3

In 2014, about 1 in 5 personal financial advisors were self-employed.

Personal financial advisors typically work in offices. Some also travel to attend conferences or teach finance classes in the evening to bring in more clients. The work of personal financial advisors tends to be less stressful than other financial occupations.

Work Schedules

Most personal financial advisors work full time, and about 3 in 10 worked more than 40 hours per week in 2014. They often go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.

Education and Training

Personal financial advisors typically need a bachelor’s degree. A master’s degree and certification can improve one’s chances for advancement in the occupation.

Education

Personal financial advisors typically need a bachelor’s degree. Although employers usually do not require personal financial advisors to have completed a specific course of study, a degree in finance, economics, accounting, business, mathematics, or law is good preparation for this occupation. Courses in investments, taxes, estate planning, and risk management are also helpful. Programs in financial planning are becoming more available in colleges and universities.

Training

Once they are hired, personal financial advisors often enter an on-the-job training period. During this time, new advisors work under the supervision of senior advisors and learn how to perform their duties, including building a client network and developing investment portfolios. This training usually lasts for more than a year.

Licenses, Certifications, and Registrations

Personal financial advisors who directly buy or sell stocks, bonds, or insurance policies, or who provide specific investment advice, need a combination of licenses that varies with the products they sell. In addition to being required to have those licenses, advisors in smaller firms that manage clients’ investments must be registered with state regulators and those in larger firms must be registered with the Securities and Exchange Commission. Personal financial advisors who choose to sell insurance need licenses issued by state boards. Information on state licensing board requirements for registered investment advisors is available from the North American Securities Administrators Association.

Certifications can enhance a personal financial advisor’s reputation and can help bring in new clients. The Certified Financial Planner Board of Standards offers the Certified Financial Planner (CFP) certification. For this certification, advisors must have a bachelor’s degree, complete at least 3 years of relevant work experience, pass an exam, and agree to adhere to a code of ethics. The exam covers the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, investment and real estate planning, debt management, planning liability, emergency fund reserves, and statistical modeling.

Advancement

A master’s degree in an area such as finance or business administration can improve a personal financial advisor’s chances of moving into a management position and attracting new clients.

Personality and Interests

Personal financial advisors typically have an interest in the Helping, Persuading and Organizing interest areas, according to the Holland Code framework. The Helping interest area indicates a focus on assisting, serving, counseling, or teaching other people. The Persuading interest area indicates a focus on influencing, motivating, and selling to other people. The Organizing interest area indicates a focus on working with information and processes to keep things arranged in orderly systems.

If you are not sure whether you have a Helping or Persuading or Organizing interest which might fit with a career as a personal financial advisor, you can take a career test to measure your interests.

Personal financial advisors should also possess the following specific qualities:

Analytical skills. In determining an investment portfolio for a client, personal financial advisors must be able to take into account a range of information, including economic trends, regulatory changes, and the client’s comfort with risky decisions.

Interpersonal skills. A major part of a personal financial advisor’s job is making clients feel comfortable. Advisors must establish trust with clients and respond well to their questions and concerns.

Math skills. Personal financial advisors should be good at mathematics because they constantly work with numbers. They determine the amount invested, how that amount has grown or decreased over time, and how a portfolio is distributed among different investments.

Sales skills. To expand their base of clients, personal financial advisors must be convincing and persistent in selling their services.

Speaking skills. Personal financial advisors interact with clients every day. They must explain complex financial concepts in understandable language.

Pay

The median annual wage for personal financial advisors was $90,530 in May 2016. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $41,160, and the highest 10 percent earned more than $208,000.

 

In May 2016, the median annual wages for personal financial advisors in the top industries in which they worked were as follows:

Securities and commodity contracts intermediation and brokerage $101,750
Other financial investment activities 95,490
Professional, scientific, and technical services 87,920
Management of companies and enterprises 85,260
Credit intermediation and related activities 75,010

Wages of self-employed advisors are not included in the earnings reported here.

Personal financial advisors who work for financial services firms are often paid a salary plus bonuses. Bonuses are not included in the wage data here.

Advisors who work for financial investment firms or financial planning firms, or who are self-employed, typically earn their money by charging a percentage of the clients’ assets that they manage. They also may earn money by charging an hourly fee or by getting fees on stock and insurance purchases. In addition to their fees, advisors generally get commissions for financial products that they sell.

Most personal financial advisors work full time, and about 3 in 10 worked more than 40 hours per week in 2014. They often go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.

Job Outlook

Employment of personal financial advisors is projected to grow 30 percent from 2014 to 2024, much faster than the average for all occupations.

The primary driver of employment growth will be the aging population. As large numbers of baby boomers approach retirement, they will seek planning advice from personal financial advisors. Also, longer lifespans will lead to longer retirement periods, further increasing demand for financial planning services.

In addition, the replacement of traditional pension plans with individual retirement accounts is expected to continue. Many people used to receive defined pension payments in retirement, but most companies no longer offer these plans. Therefore, individuals must save and invest for their own retirement, increasing the demand for personal financial advisors.

Job Prospects

Job prospects for personal financial advisors should be relatively favorable compared with prospects in other financial sector occupations. Those who obtain certification will likely have the best prospects.

For More Information

For more information about personal financial advisors, visit

Global Academy of Finance and Management

For more information about regulation and licensure of personal financial advisors, visit

Financial Industry Regulatory Authority (FINRA)

North American Securities Administrators Association

U.S. Securities and Exchange Commission (SEC)

Certified Financial Planner Board of Standards

FAQ

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