Should I Be A Financial Advisor? Pros, Cons & Career Outlook

Introduction

With the ever-changing landscape of the economy, many individuals are looking for stable, lucrative careers. One option that has grown in popularity is becoming a financial advisor. Financial advisors provide advice and guidance to clients on investments, taxes, retirement planning, insurance and other financial topics. But is this the right career choice for you? This article will explore the benefits and challenges of being a financial advisor, including job description, education requirements, career outlook, salary and compensation, and regulatory environment.

Benefits of Becoming a Financial Advisor

When considering any career, it’s important to weigh the potential benefits and drawbacks. Below are some of the advantages to becoming a financial advisor:

Job Satisfaction

Financial advisors often find their work rewarding. According to a recent survey by Robert Half, “nearly nine out of 10 financial advisors say they’re satisfied with their job (89 percent).” Additionally, financial advisors have the opportunity to make a difference in the lives of their clients. They can help individuals achieve their financial goals and provide them with peace of mind.

Opportunities for Growth

The field of financial advising also offers opportunities for growth and advancement. Many financial advisors eventually become certified financial planners (CFPs), which allows them to specialize in areas such as estate planning or retirement planning. CFPs may also open their own firms and manage multiple clients.

Ability to Help Others

Financial advisors have the unique ability to help people make better decisions with their money. As Jane Barratt, Chief Advocacy Officer of MX, explains, “Financial advisors have the power to help people make positive changes in their lives, whether it’s helping them save for retirement, build an emergency fund, or pay off debt.”

Education and Training Requirements for Financial Advisors

To become a financial advisor, you must have at least a bachelor’s degree in a related field such as finance, economics, accounting, or business administration. However, many employers prefer candidates with a master’s degree or higher. Additionally, financial advisors must pass a series of exams administered by the Financial Industry Regulatory Authority (FINRA) to become licensed.

Degree Options

When choosing a degree program, aspiring financial advisors should look for programs that offer courses in investment analysis, portfolio management, financial planning, and taxation. Some universities also offer specialized degrees in financial advising or financial counseling. For example, Bentley University offers a Master of Science in Financial Planning designed to prepare students for a career as a financial advisor.

Certification Requirements

In addition to a degree, financial advisors must obtain certification through FINRA. The most common certification is the Series 7 exam, which covers topics such as stocks, bonds, mutual funds, and options. Other certifications include the Series 6 (for investment company and variable contracts products) and the Series 65 (for state-registered investment advisers).

Career Outlook for Financial Advisors

Financial advisors are in demand in today’s job market. According to the Bureau of Labor Statistics, the number of financial advisors is expected to grow 11 percent from 2018 to 2028 — much faster than the average for all occupations.

Job Availability

One of the benefits of becoming a financial advisor is that there are many job opportunities available. Financial advisors can work for banks, investment firms, insurance companies, or even open their own private practice. Additionally, many employers offer flexible hours and remote work options.

Potential for Advancement

For those who are ambitious and motivated, there is potential for advancement in the field of financial advising. Experienced financial advisors can move into management positions, such as director of investments or chief financial officer. They can also pursue additional certifications or specializations, such as becoming a Certified Financial Planner (CFP).

Risks and Challenges of Being a Financial Advisor

Like any job, being a financial advisor comes with its own set of risks and challenges. Here are some of the potential drawbacks to consider:

Long Hours

Financial advisors often have to put in long hours to meet client deadlines and stay up-to-date on the latest industry trends. According to the Robert Half survey, “more than half of financial advisors (54 percent) work more than 40 hours per week.”

Compliance Responsibilities

Financial advisors must adhere to strict regulations and guidelines set forth by FINRA and other authorities. They must remain current on these rules and regulations and be prepared to answer questions from clients and regulators. Failure to comply with these regulations can result in fines or even criminal charges.

Financial Advisor Job Description

So what does a financial advisor actually do? Financial advisors typically perform the following tasks and responsibilities:

Typical Tasks and Responsibilities

• Analyze clients’ financial information and develop tailored plans to meet their needs
• Manage portfolios of stocks, bonds, and mutual funds
• Monitor financial markets and recommend appropriate investments
• Provide advice on taxes, insurance, estates, and retirement plans
• Prepare financial statements, reports, and projections
• Maintain records of clients’ accounts

Skills Needed

In addition to technical knowledge of investing, financial advisors must possess certain soft skills. These include strong communication and interpersonal skills, problem-solving abilities, and the ability to think critically and analyze data. Financial advisors must also be detail-oriented and able to handle stress and difficult conversations.

Salary and Compensation of Financial Advisors

Financial advisors are well compensated for their work. According to the Bureau of Labor Statistics, the median annual wage for financial advisors was $88,890 in May 2019.

Average Salaries

Salaries vary depending on experience, location, and type of firm. For example, financial advisors employed by large banks tend to earn more than those working for smaller firms. According to PayScale, the average salary for a financial advisor is $64,611 per year.

Additional Benefits

Many employers offer additional benefits such as bonuses, commission, and 401(k) matching. In addition, financial advisors can take advantage of tax breaks such as deducting expenses related to their business. Finally, financial advisors can receive additional income from fees charged to clients.

Regulatory Environment for Financial Advisors

Financial advisors must also adhere to a complex regulatory environment. Here is a brief overview of the licensing and professional standards required of financial advisors:

Licensing Requirements

Financial advisors must be licensed by FINRA in order to practice. Depending on the services provided, advisors may also need to obtain additional licenses from the Securities and Exchange Commission (SEC) or state securities regulators. Additionally, advisors must renew their licenses every few years.

Professional Standards

Financial advisors must also abide by professional standards and ethical guidelines. These include maintaining client confidentiality, avoiding conflicts of interest, and acting in the best interest of their clients. Violations of these standards can lead to disciplinary action, fines, and loss of licensure.

Conclusion

Becoming a financial advisor can be a rewarding and lucrative career choice. It provides job satisfaction, opportunities for growth, and the ability to help others. To enter the field, you must have at least a bachelor’s degree and pass a series of certification exams. The job outlook is promising, with salaries averaging around $65,000 per year. There are also risks and challenges to consider, such as long hours and compliance responsibilities. Ultimately, whether or not you choose to become a financial advisor is a personal decision.

Summary of Findings

This article explored the pros and cons of becoming a financial advisor. We looked at the education and training requirements, job outlook, salary and compensation, and regulatory environment. We also discussed the benefits of the job, such as job satisfaction, opportunities for growth, and the ability to help others. Finally, we considered the risks and challenges, such as long hours and compliance responsibilities.

Final Recommendations

If you’re considering a career as a financial advisor, it’s important to carefully weigh the potential benefits and drawbacks. You should also research the education and training requirements, job outlook, salary and compensation, and regulatory environment. Ultimately, the decision to become a financial advisor should be based on your individual goals and preferences.