Financial planner complete career guide

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Introduction 

According to Kevin Keller, who is the CEO of the Certified Financial Planner Board, the demand for financial planners and the importance of financial planning has been highlighted by the COVID19 pandemic. The pandemic has resulted in an overwhelming need for individuals and businesses to restructure their financial goals. As of December 31, 2020, the board announced a record growth of 2.7% in the number of certified financial planner professionals. 

A financial planner is a qualified investment professional who works in conjunction with individuals, SMEs, and large corporations, to help them achieve their financial goals. They focus on specific areas such as investments, retirement, estate planning, and wealth management. 

The role of a financial planner is considerable due to the possible financial implications that can be directly related to the competency of the person in this position. A successful financial planner requires in-depth expertise on all relevant accounting and financial subject matters. They are trusted professionals that provide their clients with a full picture of long and short-term financial goals.  

If you’re an ethical person who cares about helping individuals and companies plan and manage their finances, you may want to consider a career as a financial planner. Financial planners are required to uphold strong relationships with clients and high ethical standards. They act with diligence, integrity, and honesty to build lasting trust relationships with clients. 

Financial planners are required to comply with legislation and governing regulations. They must adhere to professional behavior with clients and other financial planner professionals. 

How do financial planners differ from accountants? 

The term financial advisor is a broad term referring to anyone who gives financial advice. As such, both financial planners and accountants can be considered to be financial advisors.  But financial planners and accountants are not actually the same when it comes down to their responsibilities and the focus of their client service. 

According to Investopedia, “Accountants do auditing work, financial forecasting, and putting together financial statements, while financial planners help individuals with wealth management and retirement planning.” 

The benefits of a career in financial planning 

alt"identification-1" Career longevity 

For those who care about career sustainability, there will always be a need for financial planners, be it personal or business. The projected growth of 4% is expected between 2019 and 2029 – a percentage that is in line with all other occupations.  

There is tremendous scope for financial planners to get new acquisitions and to grow with existing clients, thus creating long-standing relationships within the business and personal sectors. 

alt"identification-1" Career objective 

Financial planners consult with clients to analyze their objectives, risk tolerance, goals, lifestyles, or corporate standing. From the information gathered, a program is set up to help the client achieve their desired goals as well as invest surplus funds to expand their business or personal portfolio.  

A successful financial planner aims to create a trusting relationship with clients putting their needs first and, in this way, helping clients to grow their businesses through marketing themselves and being marketed. Marketing or networking simply means creating exposure for themselves through social networking. 

alt"identification-1" Career credentials and benefits 

Certified financial planners (CFP) are trusted and highly regarded professionals. A CFP’s credentials are verifiable through the CFP board, making them available online to potential clients.Your credentials as a certified financial planner guarantee that you have received training in more than 72 financial areas. 

Additional benefits, apart from job sustainability and fair pay, include: 

  • Working indoors in comfortable environments  
  • Job satisfaction in helping firms and people make sound financial decisions 
  • Interacting with people and assisting them in reaching their financial goals 
  • An overall high-paced, challenging work environment 

What is the expected salary range for financial planners? 

Hiring a financial planner is generally expensive – as reflected in the average salaries attached to these positions which range from $56k to $180k. The median salary is approximately $96k, depending on experience. 

Skills that impact your earnings: 

  • Investment management:  5% increase 
  • Data analysis: 5% increase 
  • Financial analysis: 1% increase  

Most financial planners receive commissions on the sale of securities and insurance products in addition to charging hourly rates for personal economic assessments. Commission payment scales vary according to individual companies and the products being sold. 

Financial Planner salary information by state
future outlook tooltip icon

Payscale is a salary survey service meant to provide employers and employees with salary data at local levels to benchmark and compare. While Payscale has a much smaller sample size than BLS, Payscale does update more frequently so data may be considered fresher. Payscale also indicates salaries at a wider range of roles whereas BLS sometimes aggregates numerous professions into one category which may skew salary data. For this reason, we find Payscale to be a good secondary salary indicator. All information received from payscale is via a paid API. You can read more about payscale and their data methodology here.

Nominal
Real salary
future outlook tooltip icon

The nominal salary is the unadjusted salary paid.

The real salary is adjusted to consider the purchasing power by state. We multiply the nominal salary by a state purchasing parities index to indicate the relative value of salaries by state. For instance, while New York or California might pay the highest nominal salary, these states are relatively expensive and so the real value of the salary is often less than a cheaper to live in state with a lower nominal salary.

Highest salary states

1.

New York

$75,728

Average salary

2.

California

$70,926

Average salary

3.

Washington

$70,384

Average salary

4.

Alaska

$69,236

Average salary

5.

Hawaii

$67,583

Average salary

6.

Massachusetts

$66,189

Average salary

7.

Nevada

$66,141

Average salary

How experience affects earnings
future outlook tooltip icon

Payscale aggregates all employee salaries into experience and degree cohorts and charts out the average salaries accordingly. While this is interesting information, it is simply an indicator and should not be considered as a definitive accounting.

Average

Timeline Salary
Less than 1 year $43,870
1 to 2 years $50,348
3 to 5 years $58,844
6 to 10 years $69,894
11 years or more $97,073

The effect of specialization on pay
future outlook tooltip icon

Payscale looks at the skills listed on employee CVs by career and takes the average salary to extrapolate which skills correlate to a higher salary, on average. While this is interesting information, it is simply an indicator and should not be considered as a definitive accounting.

Client Interaction

Client Interaction

8.49% Average salary increase

or approximately

$5,261 in annual pay

Financial Analysis

Financial Analysis

5.66% Average salary increase

or approximately

$3,509 in annual pay

Investment Management

Investment Management

4.80% Average salary increase

or approximately

$2,976 in annual pay

Investment Planning

Investment Planning

2.81% Average salary increase

or approximately

$1,744 in annual pay

Financial Advisor

Financial Advisor

0.58% Average salary increase

or approximately

$362 in annual pay

Education requirements for a financial planner 

Companies will hire financial planners with a variety of educational experiences. Entry positions require as little as a bachelor’s in finance, economics, or business management from an accredited 4-year university. But those looking to excel in the field and earn a competitive edge should consider a master’s degree or higher. Certifications are vital to earn as well, as they significantly increase pay and client confidence in the field. 

The path to a master’s in financial planning is flexible, as most companies will accept both a Master’s in Finance (MF) and Master’s in Business Management (MBM). Though the degrees are not the same, as an MF is more focused on finance while an MBM curtails to broader management positions, they both show competency in math, calculations, interpersonal skills, and attention to detail. An MBA is generally more expensive to obtain than an MF but will offer more flexibility in the business field. 

Our research shows the general timeline of an MF and MBA spans between 10 months and 3 years, with specialized programs for working and part-time students with outstanding commitments offering leniency of 4 years. Many master’s programs require a minimum of 5 years of experience in the field or a bachelor’s in an appropriate field of economics, accounting, or finance to apply.  

A master’s or higher will require general admissions qualifications, such as letters of recommendation from an educated or professional source, prior education transcripts, and a grade point average (GPA) of 3.0 or higher depending on the program. Additionally, the Graduate Management Admission Test (GMAT) and Graduate Record Examinations (GRE) will usually be required. Although many top programs do not require a specific score, students looking for stronger admissions should aim for a score of 680 or higher for the GMAT, and 325 for higher for the GRE. 

A Ph.D. in finance or business management is available for those willing to advance their education even further in financial planning. However, they are a considerable time commitment, averaging 3 to 5 years of graduate work and internships. A Ph.D. shows true mastery in the field but isn't required to succeed as a financial planner.  

Certifications are the last major educational opportunity to pursue and can be earned at any education level after bachelor’s from an accredited university. To become a certified financial planner, you need to complete the required coursework from a CPF Board Registration Program, which takes 12-18 months and hold a bachelor’s degree or higher in any discipline. Then applicants must take a 170 multiple choice CPF exam, which is completed in 2 3-hour sessions over the course of a day. 

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Skills

Candidates who are interested in this career path should consider whether they have the following additional skills which are essential in this line of work. 

  • Math skills are beneficial as planners consistently work with numbers. A candidate who has good math skills will thrive in this financial environment. 
  • People and social skills are a definite necessity because interacting with clients is a large part of a financial planner's duties. 
  • Analytical skills are a must as planners need to be up to date with a vast range of information like economic trends and financial regulations.  
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Training 

While college-level education is essential, most companies also offer on-the-job training. Senior financial planners mentor newly graduated personnel by teaching them how to develop investment portfolios and build a client network. The training typically continues over a year by which time the new financial planner has built their portfolio of clients. 

CFP Coursework 

If candidates wanting to complete the CFP course don't already have a college certificate or a university degree, they will need to complete the curriculum set out by the CFP board’s registered program. If they do have accredited certificates and degrees, these can likely be used to bypass some of the course material. 

This program highlights the primary financial planning areas such as: 

  • CFP regulations 
  • The ins and outs of financial planning 
  • Education planning 
  • Risk management 
  • Insurance planning 
  • Investment planning 
  • Tax planning 
  • Retirement savings and income planning 
  • Estate planning 
  • Financial plan development (capstone course) 

Choose a program 

Although having the same core outcomes, programs relating to the CFP coursework differ in style, length, and delivery method. Before choosing a financial planning program, students should consider whether they prefer online or offline courses, the level of the program, available examination support, and their personal budget. 

Program concentrations 

There are several concentrations you can choose to pursue within financial planning. Students or employees wanting to advance their career in finance can specialize in these financial planning fields: 

  • Taxation, estate planning, wealth planning - including retirement and investments  
  • Certified Financial Planner (CFP) - helps plan and execute individual long-term and short-term goals for individual and business clients. 
  • Chartered Financial Analyst (CFA) - provides guidance to individuals and businesses when making investment decisions. 
  • Chartered Financial Consultant (ChFC) - assists clients in estate planning, employee benefits planning and wealth planning. 
  • Certified Investment Management Analyst (CIMA)-  looks at primary business functions as their focus is more on improving business performance than on compliance and auditing.  

All of the above designations require further studies, and the minimum criteria is a bachelor's degree.  

Advantages of becoming certified 

For candidates who want to pursue a job in financial planning, the advantages of being certified are attractive especially to potential clients and employers.  In addition, the CFP board shows that:  

  • 83% of CFP professionals claim to have a competitive edge over other financial advisors 
  • 90% of consumers feel more assured working with financial planners who have a financial planning designation 
  • 86% of CFP professionals claim that certification has positively impacted their careers holistically 
  • CFP professionals can commit themselves to fiduciary duty through the CFP board 
  • Clients believe that advisors are committed to acting in their best interest 

Certification requirements 

Certification for financial planners is possible through the CFP Board of Standards. Certification can build the advisor’s reputation and hence support new client acquisitions.   

Advisors must have a bachelor’s degree, pass the CFP exam and adhere to CFP’s code of ethics. The exam covers: 

  • General principles of financial planning 
  • Insurance planning
  • Risk management 
  • Employee benefits planning 
  • Income taxes 
  • Retirement planning 
  • Investment and real estate planning 
  • Debt management 
  • Planning liability 
  • Emergency fund reserves 
  • Statistical modeling 

Licensing requirements 

Specific licenses are needed by advisors who provide investment advice, and those that manage client’s investments are required to be registered with state regulators. 

Advisors who trade in stocks, bonds, insurance policies need various licenses to go with the products that they handle. 

State licensing board requirements are available from the North American Securities Administrators Association. 

Cost of the degree 

The financial planning job field is unique as it accepts many variations of business and finance degrees. This allows students to customize their education to their strengths, either focusing solely on a finance and economics bachelor’s or pushing themselves to a doctorate degree in business management. This variety of degree specializations and levels also mean a wide range of cost differences, so be sure to compare your degree type and institution’s tuition to others before applying. 

A bachelor’s in financial planning and services will cost on average between $8,000 and $31,000. The cost is calculated depending on how long it takes you to complete your bachelor’s (3 to 4 years), whether you live in state or out of state, and if your degree is online or in person.  

There is a significant increase in price when it comes to a master’s in both an MBA and MFA. The broader MBA degree will range from $90,000 to over $160,000 for a 2-year program. The more precise MF will cost anywhere between $60,000 to $110,00 for a 2-year program. These estimates are based on per semester cost, state residency, and online and offline options. Accelerated programs exist for both degrees, offering students the ability to earn a master’s within 10 months, or about 2 semesters, which can considerably lessen the cost. 

A tuition's total cost holds many variables, no matter which level of education or which program you choose to pursue. For more precise estimates, contact your desired institution for program-specific details. 

Financial Aid 

There is a wide variety of federal and state loans, grants, and scholarships available to potential students looking to become financial planners. The Free Application for Federal Student Aid (FAFSA) is the most common form of aid students can receive across any program, but a myriad of fellowships and scholarships are available for financial planning specific education. 

For more financial aid opportunities and programs, see your local institution for the in-house scholarship opportunities they offer and the advice they can provide. 

Career options

After certification, CFP’s can explore the following options for employment. They can build a solo practice or choose to join a large or a small firm. Candidates can even pursue one of the following career paths: 

Budget analyst

Budget Analysts assist both private and public organizations plan their finances. Their average salary is $76,540 with a minimum qualification requirement for a bachelor’s degree. 

Financial analyst

Financial Analysts assist both individuals and businesses in making guided decisions. Earning potential is $89,590 with a required bachelor’s degree as a prerequisite. 

Financial manager

Financial Managers assist organizations to develop and implement long-term financial goals by creating direct investments and financial reports. Their average earnings are $129,890 with an entry-level requirement of a bachelor’s degree. 

Continuing education 

CFP’s need to stay up to date with comprehensive financial planning to best serve their clients. Below are the continued education requirements. 

CE requirements 

CE stands for continued education, which is a requirement for CFP professionals. Requirements are: 

  • 30 hours of CE per reporting period 
  • 2 hours CFP board approved ethics CE 
  • 28 hours CE spent on 1 or more CFP board principal topics 

The CE requirement comes into effect as soon as the candidate has qualified as a CFP. 

CFP’s must report to the CFP Board each reporting period according to where they are registered for their CE credits to stay current. There are more than 14,000 programs from which to choose. 

Conclusion 

Financial planners are masters of secluding, numbers, and long-term economic goals. If you excel in fiscal responsibility and yearn for a reliable and sustainable job field, then financial planning may be ideal for you. The sustainability of the job is far from its only perk, as it boasts high salaries with room to grow and an educational field that offers many personalized pathways into the job market. Number lovers and scholars alike will find comfort in this field of work, so consider a career in financial planning today. 

Certified Financial Planner Board of Standards  

The FPSB is a global organization aiming to ensure a standard of excellence in financial planning. It can be used as a source of holistic information regarding a career as a qualified CFP. 

Investor.gov:  

An official U.S governmental source of financial data providing information about securities, financial planning and other related topics. 

Certified Financial Planner Board (CFP)  

The official certification body for financial planners providing information regarding CFP certification and requirements in the United States. 

Global Academy of Finance and Management: The academy serves as an advisory board for the Standards Accreditation Council. They are the world's first certified education body producing graduate certifications.