When you become a licensed financial planner, you can work either as a personal financial adviser or as a financial analyst. As a personal adviser, your job will be to measure the financial needs of the person who hires you. On the other hand, as a financial analyst, your job will be to measure the financial performance of organizations.
If you have strong organizational and interpersonal skills, you can even work for multiple clients at a time. Following are some of the basic steps that you must follow to become a financial planner.
Tips to Become a Financial Planner
Obtain Educational Qualifications
You must possess at least a bachelor’s degree in a related subject area, such as business administration, accounting, statistics or economics. Though a higher level of education is not a mandatory qualification requirement, a master’s degree in finance or business administration will definitely enhance your chances of becoming a licensed financial planner.
Most individual clients and organizations prefer to hire those who have completed higher level of courses that teach about corporate budgeting, financial analysis method and accounting policies and procedures.
You can further enhance your chances by completing advanced courses that teach about risk management, options pricing and bond valuation. Many schools also offer specialized courses in financial planning. A degree in such courses will obviously be a big plus.
Obtaining licenses is also not an obligatory qualifying criterion to get a job as a financial planner, but it is practically almost impossible to succeed in this field unless you are licensed. You can obtain a license through FINRA (the Financial Industry Regulatory Authority). The best strategy is to choose a specific area in financial planning and apply for a license in that category only, such as securities.
FINRA conducts an examination to determine whether a candidate is eligible for the license or not. In general, you have to pass two exams – a state specific exam and a national product exam. You have the option to schedule the dates for your exams. You can even appear in both the exams in a single day.
Obtain CFP Certification
Certifications are issued by CFPB (the Certified Financial Planner Board). For this, you have to complete a specific education program registered by the CFP board. You must have at least a bachelor’s degree to enroll in this program. After completing the program, you have to appear and pass a CFP certification exam. After passing the exam, you have to gain three years of work experience as an assistant financial planner.
You will also be required to disclose all agency or litigation proceedings. The CFP board contacts FINRA’s Central Registration Depository to verify disciplinary issues, your academic qualifications and employment history. Finally, the certification is issued after doing a thorough background check when the CFP board is satisfied that all criteria have been fulfilled thoroughly.
Pay Certification Fee
Expect to pay a certain sum of money as a certification fee, which is around $100. Also, in order to retain the certification, you have to pay $360 every two years. Overall, though the mandatory requirements to become a financial planner are very few, it demands hard work and determination to succeed in this field.