Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Financial planning offers relatively high pay, strong job growth and the chance to make a positive difference in other people’s lives. In this article, we’ll explore how to become a financial planner, including education, experience and certification.
Becoming a financial planner can be a great career option for individuals who want to focus on the human side of finance. Like other finance specialists, financial planners need sharp analytical and mathematical abilities, but this client-facing role also demands a robust interpersonal skill set.
If you’re an outgoing, detail-oriented person with a flair for numbers, financial planning might be a good fit for you.
What Does a Financial Planner Do?
Before we dive into the details of how to become a financial planner, let’s explore what the role entails. Many people go into the financial planning field to help others build savings, invest wisely and learn to make sound financial choices. But what is a financial planner, exactly?
Broadly speaking, financial planners help people and organizations manage their money. While some finance professionals, such as risk analysts and investment bankers, focus on corporate, government and nonprofit clients, financial planners usually serve individuals and families.
Also known as personal financial advisors, financial planners help clients at all life stages work toward various short- and long-term monetary goals. They may advise young professionals on how to start investing; work with parents to set up college funds for their children; or help individuals and couples plan for retirement, repay debt or decide how to handle an inheritance. Some planners specialize in areas like risk management or retirement.
Throughout these processes, a financial planner considers each client’s needs, values and risk tolerance.
After devising an initial plan, a planner may invest their client’s funds, monitor the investments’ performance and meet with the client to provide updates and suggest adjustments. Planners must also stay on top of market trends and industry developments so they can help clients make informed decisions based on up-to-date data and predictions.
Another important part of a financial planner’s job is building their client base, often referred to as a book of business. Whether self-employed or working for a bank or an investment firm, financial planners invest a lot of time into expanding and maintaining their business relationships. They often give seminars and attend networking events to connect with new clients.
Financial Planner Salary and Career Growth
Finance careers are known to be lucrative, and financial planning is no exception. According to the U.S. Bureau of Labor Statistics (BLS), personal financial advisors earn a median annual salary of $94,170, more than double the national median salary of $45,760 for all occupations.
The BLS also projects positive growth for these professionals, with a 15% job growth—three times the national average—projected from 2021 to 2031. The aging population needs ongoing retirement-planning advice, and traditional pension plans are declining. Plus, higher education costs are rising and more people need to plan for how to pay for college. These factors are all likely to bolster demand for financial planners.
Increasing automation in the finance field means software programs have begun to take over some investment services tasks. However, the complex and often subjective nature of financial planning means human professionals are still essential in the field.
What’s the Difference Between a Financial Analyst and a Financial Planner?
When comparing financial advisors vs. financial planners, the distinction can be murky, especially since the job titles are often used interchangeably. Both professionals advise individuals and organizations on money matters. However, “financial advisor” (also spelled “adviser” in legal codes) is a broader category that includes financial planners and other specialists such as stockbrokers and estate planners.
Typically, financial planners provide a more holistic scope of practice than financial advisors. Planners are more likely to work with long-term clients to develop and maintain comprehensive fiscal plans, while advisors often focus on specific transactions or narrower specializations like investment management.
How to Become a Financial Planner
Earn a Bachelor’s Degree
You can become a financial planner with a bachelor’s in any discipline, but many individuals choose finance degrees, business administration bachelor’s degrees or bachelor’s degrees in accounting. Look for an undergraduate program with courses in areas like investments, estate planning and risk management.
Some schools offer financial planning as a concentration within a broader business major. Social sciences and mathematics are also popular majors among aspiring financial planners.
If you’re planning to become a Certified Financial Planner (CFP)®, you’ll need to complete your bachelor’s degree either before taking the certification exam or within five years of passing.
If you haven’t finished your degree yet, look for programs that fulfill CFP requirements for postsecondary financial planning education. If you’re already a bachelor’s graduate, don’t worry: You can still meet these requirements through a certificate or graduate program. Many CFP-eligible programs are available online.
Most bachelor’s-level programs involve about 120 credits, and full-time students can usually graduate in four years. Common admission requirements include transcripts, personal essays, recommendation letters and SAT or ACT scores.
Consider Certification
Certification is not required to become a financial planner, but it can help bolster your financial planning résumé.
The CFP designation is one of the finance industry’s most popular and prestigious certifications, and earning this credential can offer a major career boost. CFPs undergo rigorous training and must act as fiduciaries—in other words, they are obligated to put their clients’ needs before their own. For this reason, CFP certification can enhance your credibility and help potential clients feel confident that you’re acting in their best interests.
So, how do you become a certified financial planner? First, you’ll need to complete approved college-level financial planning coursework. The education component usually takes 12 to 18 months, though candidates with certain degrees or certifications may qualify for an accelerated path. Next, aspiring CFPs must pass a six-hour multiple-choice exam. Finally, individuals need 4,000 to 6,000 hours of professional experience.
Gain Work Experience
If you’re pursuing the CFP title, work experience is built into the certification process. The CFP Board Career Center can help candidates find entry-level financial planning work and start building expertise in the field. Regardless of whether you’re a CFP candidate, this resource is free and includes articles and webinars to support your search. Job-seekers can also take advantage of finance-specific career sites like eFinancialCareers and FinancialJobBank.
Aspiring financial planners can gain experience through internships and associate or assistant financial planning positions at organizations like banks, credit counseling organizations, brokerage firms and accountancy practices. These junior-level roles typically include a year or more of on-the-job training.
You can also gain experience by teaching financial planning or through self-employment. However, note that self-employed CFP candidates need supervision from a qualified professional.
Reach Out to Your Network
Strong networking skills are crucial for financial planners, both in the job search process and throughout their careers. The same skills that help you build a book of business can help you get started as a financial planning professional.
Professional networking sites like LinkedIn can provide a good starting point, allowing users to browse job postings, connect with fellow industry professionals and leverage existing connections to generate client leads.
If you’re a student, you can network in college through your professors, cohort, internships and college career center. You may also consider getting involved with business- and finance-related student clubs.
Industry organizations, such as the National Association of Personal Financial Advisors, provide a wealth of professional development and networking resources for all career stages, and many offer student memberships.
Frequently Asked Questions (FAQs) About Becoming a Financial Planner
How do I start a career in financial planning?
Becoming a financial planner often starts with a bachelor’s degree in a field like business, finance or accounting. After gaining a background in the field, individuals can look for entry-level jobs at organizations like banks, insurance companies and investment firms. They can also pursue self-employment while preparing for certifications like the CFP.
Do financial planners make a lot of money?
Yes, financial planners usually earn high salaries. The BLS reports a median annual wage of over $94,000 for personal financial advisors. Experience, location and industry can affect earning potential in the field.
How long does it take to make it as a financial advisor?
Since there are many ways to become a financial planner or personal financial advisor, there is no universal timeline. A four-year bachelor’s degree is usually required, plus additional field-specific study, especially if your undergraduate degree is unrelated to finance or business. For individuals seeking CFP certification, completing the educational requirements can take another 12 to 18 months. New financial planners in entry-level jobs often receive at least a year of on-the-job training.
I'm a financial planning enthusiast with extensive knowledge in the field, backed by a strong foundation in finance, economics, and business administration. My expertise is demonstrated through firsthand experience and a deep understanding of financial planning concepts, regulations, and industry trends. I'll provide insights into the key concepts discussed in the article and shed light on the steps to become a successful financial planner.
Key Concepts in the Article:
-
Financial Planner's Role:
- Financial planners help individuals and organizations manage money, focusing on personal financial goals.
- They provide advice on savings, investments, retirement planning, debt repayment, and inheritance management.
- A holistic approach is essential, considering clients' needs, values, and risk tolerance.
-
Career Outlook and Salary:
- Financial planning is a lucrative career, with personal financial advisors earning a median annual salary of $94,170, well above the national median for all occupations.
- The field is projected to experience 15% job growth from 2021 to 2031, three times the national average, due to factors like an aging population and rising education costs.
-
Difference Between Financial Analyst and Financial Planner:
- Financial planners have a more holistic scope, working with long-term clients on comprehensive fiscal plans.
- Financial advisors include a broader category, encompassing planners as well as specialists like stockbrokers and estate planners.
- Planners focus on comprehensive financial planning, while advisors may concentrate on specific transactions or narrower specializations.
-
Steps to Become a Financial Planner:
- Earn a Bachelor’s Degree:
- A bachelor's degree in any discipline is acceptable, with many choosing finance, business administration, or accounting.
- Specialized coursework in investments, estate planning, and risk management is valuable.
- Consider Certification:
- While certification is not mandatory, becoming a Certified Financial Planner (CFP) can boost credibility.
- CFPs undergo rigorous training, pass a six-hour exam, and accumulate 4,000 to 6,000 hours of professional experience.
- Gain Work Experience:
- Work experience is integral to the CFP certification process, and aspiring planners can find entry-level positions through resources like the CFP Board Career Center.
- Internships and assistant positions at financial organizations provide practical experience.
- Network:
- Building a strong network is crucial for career growth.
- Utilize professional networking sites like LinkedIn and industry organizations like the National Association of Personal Financial Advisors.
- Earn a Bachelor’s Degree:
-
Frequently Asked Questions (FAQs):
- FAQs cover the initial steps, earning potential, and timelines for starting a career in financial planning.
- Stress the importance of networking, gaining relevant work experience, and pursuing certifications for career advancement.
By understanding these concepts and following the outlined steps, aspiring individuals can embark on a rewarding career in financial planning.
