A financial planner advises individuals on managing their personal finances, dealing with matters such as:
- Saving for retirement
- Saving for college
- Saving for home or car purchase
- Expenditure control
Many planners work independently or in small firms, though larger financial services firms either are adding financial planners to their staffs or are insisting that their financial advisors (or financial consultants) also become certified as financial planners.
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A bachelor's degree is the minimum educational attainment expected of a financial planner. Coursework in finance, accounting and/or economics is helpful, though not required. Strong quantitative and problem-solving skills are essential, but so are communications and sales skills. An MBA may make you an especially desirable job candidate, depending on the firm.
Legal requirements to function as a financial planner vary by state. Even in jurisdictions where it is not mandated by law, passing the exam to become a Certified Financial Planner (CFP) is highly advisable. The CFP designation increases your credibility and marketability, to potential employers and clients alike.
Duties and Responsibilities
A financial planner helps clients create personal budgets, control expenditures, set goals for saving and implement strategies for accumulating wealth.
He or she may have working relationships with financial advisors, investment managers and/or mutual fund companies, utilizing these specialists for the actual investment of their clients' funds. The job requires keeping current about developments in financial products, tax laws and strategies for personal financial management, particularly with respect to retirement plans and estates.
Success also requires sales ability, both in the acquisition of new clients and in the development of new ideas to improve the financial situation of existing clients.
The time commitment is highly variable, dependent on the type of practice you are in, your client load, and the effort you are putting into acquiring new clients. Thus, it can range from a part-time effort of under 40 hours per week to one that far exceeds 40 hours. To accommodate their clients' schedules, financial planners frequently must be available for meetings and telephone consultations in the evenings and on weekends.
What's to Like
Depending on the firm, a financial planner may enjoy a high degree of professional autonomy. The job should appeal to those who enjoy teaching, given that many of your clients will be unsophisticated financially and require education in the fundamentals of personal finance. The job also offers an opportunity to improve your clients' lives in a tangible way.
What's Not to Like
Financially unsophisticated clients often require much handholding from a financial planner, can have unrealistic expectations, and may blame the planner for their own failure to follow recommendations.
Planners may face conflicts of interest. For example, a financial planner in the employ of a securities brokerage firm may be pressured into recommending certain investment products that may not be entirely suitable for their clients. Likewise, planners working for small firms that have agreements to direct business to certain financial advisors, money managers or mutual funds face similar conflicts.
According to data compiled by the Princeton Review, average salaries for financial planners can exceed $100,000 for those with 10-15 years' experience. However, starting pay can be as low as $20,000. As noted above, many financial planners are self-employed or employed in small, independent practice groups. Planners in these situations may have more variable earnings than those in the employ of larger firms, depending on shifting business conditions.