How to Become a Financial Planner
Financial planners are one of the cornerstones of a bustling economy, and as such, you will want to have a solid educational background, relevant experience either via employment or internship, certification in various areas, meet licensing requirements when necessary, be cognizant of compliance regulations, orchestrate a network of those in the field for support, and build a client base.
Education For a Financial Planner
Becoming a credible and sought-after financial planner will require you to have a solid understanding of economics, accounting principles and practices, finance, and business. Reputable firms look for a minimum of a bachelor’s degree in one of the related fields just mentioned. Although a BA is not a requirement to become a financial planner, the top jobs with the most compensation will be awarded to those with at least a bachelor’s degree, if not a master’s degree. When you are researching colleges and universities, be sure to confirm their accreditation. Major learning institutions typically offer programs both on-campus and online. (One of the resources for finding the right college for you will be discussed later in the section on networking.)
Become Certified Through Membership in Professional Organizations
One way to enhance your desirability as a financial planner is to obtain certifications. These certifications include: Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), Chartered Investment Counselor (CIC), and Personal Financial Specialist (PFS). Certifications are granted when requirements are met by different professional organizations like the following:
1. The Financial Planning Association (FPA) https://www.financialplanningassociation.org/
The Financial Planning Association is one of the most prominent trade associations for aspiring and established financial planners. The FPA provides support in a myriad of ways including educational opportunities, workgroups, advocacy, and networking. There are retreats, conventions, live online events, knowledge circles, journal groups, and mentorship programs. At the center of the FPA is their core belief in certification and continuing education. Members can currently enroll in certifications courses such as cybersecurity, college planning, psychology, and elder planning. Continuing education courses are typically for 1 CE credit and have current topics such as; Cash-Flow Crunch: Helping Your Clients Manage Their Cash Flow Better, Forging a New Era of Financial Planning: Embracing a Goals-Based Approach, and Investing in America’s Future: A Deep Dive Into How Investors Earn Up to 10.25% Fixed Returns in a Flexible, Secured, and Collateralized Portfolio.
2. Certified Financial Planner Board of Standards (CFP Board) https://www.cfp.net/
The Certified Financial Planner Board is the certificate granting authority for the Certified Financial Planner (CFP) certification. Their College for Financial Planning has granted certifications since 1973 and membership presently exceeds 100,000. The organization offers in 2024 over $1.6M in scholarships. According to their website, “The Center for Financial Planning creates opportunities for conducting research, convening and showcasing experts, and building cutting-edge knowledge to advance the field of financial planning. This knowledge helps CFP® professionals and other financial practitioners excel in their career and deliver outstanding service to clients. Through the Financial Planning Knowledge Center (launching in 2020), Academic Research Colloquium, Financial Planning Review and Client Psychology Program, among other efforts, we are leading the way to grow the profession.”
Learn About and Meet Licensing Requirements and Regulations
Financial planners in certain branches of the profession must meet licensing requirements and have a working knowledge of applicable regulations. For example, financial planners who engage in activities involving the buying and selling of securities may have to have a Series 7 License (General Securities Representative) or a Series 65 License (Uniform Investment Adviser Law Examination). If you plan to sell insurance as part of your financial planning services, you will need to follow local and state licensing requirements for insurance sales. Additionally, financial planners who manage extensive asset portfolios may be required to be registered with the U.S. Securities and Exchange Commission (SEC).
Build a Client Base
Building a client base will be the key to you becoming a successful financial planner. Commissions are earned based on sales and the volume of your asset management portfolios, therefore establishing relationships with prospective clients is imperative. Study sales techniques and develop superior communication skills. Expertise regarding your product(s) and believing in your hard-earned knowledge will afford you the experiences you will need to achieve a strong core of established clients, and a healthy influx of new business.
Intern When Possible
Research various opportunities to intern with a reputable firm. Many of the trade associations have information and mentorship programs to support you in your search for that irreplaceable experience you will need to be a successful financial planner. Survey firms in your area and ascertain what might be available and fit into your schedule.
Job Outlook for Financial Planners
According to the U.S. Bureau of Labor Statistics (https://www.bls.gov/), Financial Planners have wonderful opportunities in store for the time period spanning 2022-2032. The field is growing by 13% per year, which is more than twice the average rate of 6%. In 2022 there were 327,600 jobs, and government experts predict there will be a yearly increase of 25,600 jobs per year from 2022-2032, and over 42,000 new jobs overall for that time period. The median pay per year was $95,390, while the median hourly wage was $45.86. (As a reminder, the “median” amount is not an average, it is the middle value of a dataset. For the U.S. BLS definition go to: https://www.bls.gov/cps/definitions.htm#medianearnings ).
By pursuing your educational goals, joining trade organizations, achieving certifications, building a client base, and staying abreast of compliance regulatory changes, you will be on your way to a satisfying and rewarding career as a financial planner.
