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How to Become a Financial Planner
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Duties of a Financial Planner

Because of the rise in the number of wealthy investors and successful entrepreneurs around the globe, becoming a financial planner is a great career choice. Having great wealth is not usually a simple proposition. Most wealthy people have their resources spread among various pursuits, and those funds must be carefully managed and monitored.

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According to Investopedia.com, the basic duties and tasks of a financial planner include

working with individuals, families, and businesses to help clients understand their financial circumstances, and how to reach their short-term and long-term financial objectives.

New clients participate in an initial interview where they answer questions regarding income, debt, monthly expenses, current investments, savings, taxes, and insurance policies. The financial planner then analyzes the client’s financial positions and offers recommendations on how clients can reach their long-term and short-term financial goals.

The goal of a financial planner is to offer their clients the best advice for reaching and maintaining their plans for their future wealth.

Steps to Becoming a Successful Financial Planner

So, how does one become a financial planner? First, you must complete some schooling at the university level. Then, you must pass rigorous exams to become a licensed financial planner. Those licenses include the Certified Financial Planner (CFP), and/or the Financial Industry Regulatory Authority license (FINRA).

Certified Financial Planner

To earn a CFP license, you must hold a minimum of a bachelor’s degree from an accredited university. However, you can sit for the exam prior to finishing your degree. To qualify to take the exam, you must have completed coursework in the following:

  • Professional Conduct and Regulation
  • General Principles of Financial Planning
  • Education Planning
  • Risk Management and Insurance Planning
  • Investment Planning
  • Tax Planning
  • Retirement Savings and Income Planning
  • Estate Planning
  • Financial Plan Development (capstone) course

Once you have passed the exam, you are required to complete your bachelor’s degree within five years. You must also have completed at least 6,000 hours of professional financial planning experience to qualify for the CFP.

Another consideration in applying for the CFP exam is the requirement that you sign an ethics declaration. The financial planning industry can only maintain its integrity by operating with the highest ethical standards and practices. You must agree that you will always act for the client’s best interests, regardless of how you may profit or otherwise gain from working with their financials.

As part of the ethical considerations, all candidates for the exam must adhere to and successfully pass a criminal and financial background check. It is in the best interests of all parties concerned that candidates for the CFP are free of convictions and have a solid financial history.

Financial Industry Regulatory Authority

To pass the FINRA Series 7 exam, you are required to first pass the Securities Industry Essentials (SIE) exam.

These basic skills are essential for any financial planner who wishes to have a successful career. Once you have successfully passed the SIE exam, you can begin preparation for the FINRA Series 7 exam.

The first step is to secure a sponsor from a FINRA member firm. The firm files Form U4 (Uniform Application for Securities Industry Registration) for you to be registered for the exam.

Next, you will need to prepare for the 125-question exam that covers the five principle activities of financial planners:

  1. Seeks business for the broker-dealer through customers and potential customers.
  2. Evaluates customers’ other security holdings, financial situation and needs, financial status, tax status, and investment objectives.
  3. Open accounts, transfer assets, and maintains appropriate account records.
  4. Provides customers with information on investments and makes suitable recommendations.
  5. Obtains and maintains customer’s purchase and sales instructions, enters orders, and follows up.

The cost for the exam is around $300, so, it is in your best interest, and the best interest of your sponsor, that you are adequately prepared for the exam and achieve a passing score, which is generally around 75 percent.

Job Prospects

Certified financial planners make approximately $90,000 annually, depending on the pay and bonus structure of the firm they work for. The industry is growing rapidly and there were more than 250,000 CFPs hired in 2016.

Lead planners or partners in firms can earn nearly $500,000 annually, depending on their salary and bonuses for the year. FINRA licensed planners who run their own branches have unlimited earning potential. As the industry itself grows, new firms will continue to open.

For those who have a knack for numbers and a desire to help people grow their wealth, the financial planning industry is a great career to consider.

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