How to Become a Financial Advisor: 6 Tips for Mastering This Career

Dec 19, 2014 -
Are you thinking of becoming a financial planner? Do you love helping people reach their financial goals and realize their dreams? During the next 30 years, over 30 trillion dollars in wealth is expected to transfer from baby boomers to Millennials -- and you could be the one helping them manage it. The financial industry is growing and constantly changing. If this is an area you’re passionate about, here are six tips for developing a career as a financial planner or advisor. (Click here to tweet this list.)

1. Understand What a Career as a financial planner Involves

When deciding whether you want to become a financial advisor, the first step is to understand today’s industry and what being a financial planner entails. “We aren't all a bunch of old guys in suits and ties sitting across mahogany tables,” says Alan Moore, founder of XY Planning Network. “While those firms certainly still exist, an entirely new crop of financial planners are emerging that bring a new way of financial planning.” Nowadays, financial planning isn't just about selling insurance or cold calling. In fact, Moore says that “many of us are fee-only advisors, which means we only get paid to provide financial planning services -- no more commission-based sales. We help our clients live their great life by helping them figure out what they want, and use their finances to support those goals and dreams. In turn, we can live our own great life, because this is an incredibly rewarding and flexible career path.” Jason Hull of Hull Financial Planning also enjoys the “privilege of helping people alleviate a lot of the anxieties around the financial unknowns of life. If you take that approach to financial planning, rather than the approach that being a wealth manager can make you wealthy, you have the opportunity to be successful and influence a lot of lives.”

2. Get the Right Education Credentials

Starting a financial planning business doesn’t have to cost a lot of money. In fact, you can set one up on less than $10,000. But you do need the right education and credentials to back you up. “I highly recommend getting the CFP certification, since it’s the gold standard in our profession,” says Moore. “You can keep your day job while taking the courses online, or you can start looking for a job in financial planning.” While working to gain your certifications, Hull also agrees that the CFP title shows you have the baseline of knowledge necessary to competently do the job. He recommends you “get into a large wealth management firm where you can work alongside someone who has the experience, and can validate your experience when you apply to the CFP Board for certification. If you work directly for a CFP, you can choose the two-year apprenticeship option rather than requiring three years of financial planning or equivalent experience.”

3. Network With Other Young Financial Planners

The average age of financial planners is 50 years old and just over 40 percent of all the advisors in the industry are 55 years or older, so finding a cohort of other young planners can be challenging. Moore suggests for younger financial planners to join groups like FPA NexGen (who also offers a helpful job board) and NAPFA Genesis. Consider getting involved with local events and networks in your city, through (or hosting your own). Also reach out to a mentor, or collaborate on webinars, and attend conferences in your industry.

4. View Yourself, and Your Practice, as a Brand

A few decades ago you had to network the old-fashioned way, through direct mail or in person. But today, aspiring financial planners and advisors can use social media to effectively market themselves in so many different ways. “If you have an interest in being a financial advisor, you should think of yourself as a brand”, suggests Jeff Rose, of Alliance Wealth Management. “Share relevant articles having to do with investing, financial planning or any topics you feel would be of interest to your community on social media. This will program how potential clients perceive you, especially if you can add your own commentary to any of the sources that you share.” “Why is someone coming to you for financial planning when they can walk into the door of a well-known wealth management firm?” asks Hull. “If you can't clearly articulate a convincing value proposition, and make your brand stand out, then you shouldn't be in the business.”

5. Unconventionally Build Your Client Base

“Every financial planning firm does things differently and it takes time to find one that's the right fit for you,” explains Sophia Bera, from Gen Y Planning. Her suggestion to start building your client base is to do as many informational interviews as you can, whether they are in the form of podcasts, written interviews or video chats. Then watch as these lead to future mentorships or job opportunities. Linda P. Jones, America's Wealth Mentor, encourages young financial advisors to “establish three specific target markets you have connections with, and then ask your clients how they prefer to hear from you.” Since you’re targeting a younger market, you should not only connect with them on social media, but through your blog, newsletters and online workshops. You want to connect with your ideal client on their level and talk the same language. In Jones’ experience, the number one reason clients leave their current financial advisor is because they don't communicate well. “Establish how your client want to be communicated with and then follow through,” she warns. Jason Hull also suggests to “learn how to be concise and effective in both written and verbal communication. Consider joining a Toastmasters society to practice speaking and to get over your fear of presentations. The better a communicator you are, the more likely your clients are to implement the plans you recommend and the more likely you are to be better at sales.”

6. Aim to Launch Your Own Firm

Your ultimate goal might be to launch your own firm, one you can run virtually from anywhere in the world. In Moore’s experience, few firms will work with clients under 50 (unless they are particularly wealthy). So if you plan to work with younger clients, you’ll likely end up starting your own firm in the future. Bera also highly recommends launching your own firm as soon as possible, especially if you get to the point where you want to work with your own clients. “My only regret is not launching my own firm sooner,” says Bera. But don’t expect to get rich or be in it for the money. “My first couple of years of being a financial advisor, my income was something that I could never brag about because I made hardly anything,” explains Rose. “What kept me going was a true desire to help others.” Before getting started in this industry, it’s important to truly understand it’s a marathon and not a sprint. Financial planning is ever-evolving, and it takes time to stay up-to-speed on new rules and strategies. Carrie Smith (@carefulcents) is a blogger and editor who recently quit her accounting job to pursue full-time writing and entrepreneurship.