If you want to learn how to become a financial advisor an interest in helping people reach there financial goals is a great place to start. Financial advisors provide clients with advice on financial matters, making recommendations on ways to best utilise their money. The role involves researching the marketplace and advising clients on products and services available, ensuring they are aware of and understand those that best meet their needs, and then securing a sale.
If you have ever wondered how to become a financial advisor, now is an excellent time to find out. The field will see a 20 percent increase of employment opportunities between 2008 and 2018.
Although hard work and dedication are synonymous with how to become a financial advisor you can earn considerable fee and/or commission-based pay. The average earnings, excluding bonuses, of financial advisors was $73,150 in May 2008. This was more than twice the amount of the national average wage. The highest earning ten percent of financial advisors earned more than $140,000 per year without bonuses. Since annual performance bonuses are quite common and most financial advisors are paid on a commission basis, there is no limit to a financial advisor’s earning potential. Some successful financial advisors earn more than $1,000,000 each year!
If you want to learn how to become a financial advisor you must have an interest in and be attentive to detail. A financial advisor must be able to keep a close watch on the financial markets to monitor the various investments their clients have made. Although they work hard to avoid such circumstances, financial advisors must be able to accept losses and failure.
As of 2011, there are no regulations over the use of the title ‘financial advisor,’ which means that anyone in the business of providing financial advice can call themselves by that title. However, certain exams and registrations are required before someone can promote the sale of stocks, charge a fee for investment advice, recommend insurance products, etc. Professional investment firms will not consider hiring someone who does not have the proper licenses.
Financial advisors are usually licensed in one of three ways: as an investment advisor representative, a registered representative or stock broker, or as an insurance producer. Before advising or promoting the sale of stocks, for instance, financial advisors must pass a series of tests provided by the Financial Industry Regulatory Authority (FINRA). These include the Series 7 exam on general securities, the Series 63 exam on state securities and the Series 65 or 66 exam on uniform investment advisor law. Some exams, such as Series 7, require an applicant to have company sponsorship before sitting for the exam.
Financial advisors who join an existing firm may not need to complete any registration. However, independent advisors will need to register with the state(s) in which they will operate. Advisors who work across state lines or operate online must register with the Securities Exchange Commission (SEC) or the states in which an office is maintained or where clients are located. Exceptions to these regulations vary by state. Financial advising is a complex but rewarding career.
Advanced specializations within these fields also exist. These specialties can open the door to better opportunities and better earnings. For example, a financial advisor may obtain the designation of chartered financial analyst (CFA), registered financial consultant, certified financial planner (CFP), chartered life underwriter (CLU), charted financial consultant or other related titles. To qualify for these designations, a financial planner must complete coursework from an organization like the College for Financial Planning. Registration is another step in how to become a financial advisor.
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