I get asked all the time how to get started as a financial planner. In case you are considering jumping into the profession, here’s my answer and here’s what you have to understand:
1. Understand what business you are in.
Being a financial planner is a business. I think it’s a great business if you start off right. But it’s still it’s a business.
There are two kinds of people in the business – those who love money and numbers and those who love people.
Those who love money, math and investments usually go to work for mutual funds and insurance companies. They don’t deal with clients. Usually those folks obtain a CFA – Chartered Financial Analyst certification.
If you want to work with people, you really don’t need a CFA certification. You need to understand investments, taxes and retirement of course. But more than that you need to learn how to deal with people. That includes some level of salesmanship. In fact, when you start, that’s all you really are – a salesperson.
Nobody hands you clients – you have to make that happen by yourself. A successful financial planner is a person who knows how to build and manage a business. If you don’t like rejection, don’t start this career.
2. Know who to stay away from.
If you go to work for an insurance company or brokerage firm, they require that you hit all your friends and family up for business. Once you do, your employer will toss you if you don’t produce enough business. Also, who you work for will influence which clients use you as a financial planner.
On the other hand, if you go to work for a bank, they’ll introduce you to clients. It’s a great place to start and it’s how I launched my career.
3. Understand licenses.
Anyone can call themselves a financial planner, but if you want to work with clients, you’ll need to work with a broker/dealer (yuk) or become a Registered Investment Adviser. The broker/dealer route is commission-based. The Registered Investment Adviser route is more consultative-based.
Of course, you’ll need to find your own clients still, so you need to think about how you’re going to do that regardless.
4. Know the Education Requirements.
It helps if you have a bachelor’s degree in Accounting, Economics, Finance, Marketing, Business or Commerce. If you’ve studied Mathematics or Computer Science, that will help too. This is just a small part of good financial advisor training.
5. Understand Certification.
You can be a financial advisor without certification, but it sure helps to have it. It demonstrates commitment and responsibility. I became a CERTIFIED FINANCIAL PLANNER™ Professional – and I highly recommend that program to anyone.
To get the certification you need to take an examination. There are over 285 colleges and universities that can help you prepare for this exam. You also need to have three years’ full-time work experience.
How to Be a Successful Financial Planner
The first question I’d ask you is, what is your definition of success?
To me, it includes being of service to my clients and supporting my family.
Becoming a successful financial planner requires work – and it never stops. You constantly have to educate yourself and learn. Above all, sharpen your listening skills. Work hard at understanding what your clients really need and want. Sometimes, they don’t even know, and you have to be able to help them discover it.
My 25 years’ experience tells me that these skills are far more important than any other. You’ll learn the most valuable lessons over the years. Don’t wait to master the subject prior to getting to work.
I love being a financial planner and if you like helping others significantly enhance their lives, you will too.
Start off by taking care of the basic requirements. Always think about how to market your services, put your clients above yourself and keep learning. That’s how to be a successful financial planner, if you ask me.
If you’re a financial planner, was your career path different? What would you add?