What Does a Financial Advisor Do?

FT Contributor  | 

Financial advisors help clients decide how to invest and manage their money and assets. In this career, you can have different specialties, but your focus is always on providing advice and options that address each client’s specific needs.

Whether they work independently or for a firm, bank, or insurance company, financial advisors need a high level of expertise, knowledge of specific financial practices and investment strategies, and, in most cases, professional certifications and licenses.

Here is what you need to know about this potentially lucrative profession.

Types of Financial Advisor Jobs

Personal financial advisors sometimes focus solely on advising clients on investments, but many cover all aspects of clients’ finances. Those who work for commercial clients or at specialized firms, meanwhile, may focus on a specific area, such as asset allocation, risk management, or investments.

Here is a closer look at the different types of career paths and specialties for financial advisors.

  • Personal financial advisors work with individuals to help them manage their assets and choose investments. In this position, you may also help clients negotiate issues such as taxes, insurance, real estate, retirement, and savings plans.
  • Bank financial advisors provide advice to clients who are also customers at a bank. In this career, you guide clients’ financial decisions and help them choose investment products and accounts at your bank.
  • Insurance firm financial advisors work at insurance companies. They provide guidance to clients seeking life insurance, insurance for their assets, or another type of coverage.
  • Registered Investment Financial Advisors (RIAs) are credentialed financial experts who can advise clients and directly manage their investment portfolios. In this career, you can work independently, but you need to meet specific licensing requirements before you may call yourself an RIA.

Financial Advisor Job Description

The job duties of financial advisors depend on their employer and the scope of their job. All financial advisors perform research on investment products and strategies, interact with clients, and recommend investment strategies and other financial management plans. Financial advisors may also directly manage clients’ investments or sell them financial or insurance products.

Here is a closer look at the job duties of a financial advisor.

  • Financial advisors perform market research and economic analysis to gain information that they can relay to clients. They may also learn about specific products that they can market to their clients.
  • Financial advisors market their services to potential clients, try to attract new customers, and build relationships with their existing client base.
  • Regardless of their area of specialization, financial advisors need to meet with clients to learn about their specific needs. You will use this information to create strategies and plans and offer products that meet your clients’ needs and goals.
  • You advise clients about how to manage their money and assets. Your duties also include explaining subjects such as risk and risk management to clients.
  • Though you may communicate with clients online, you may also conduct face-to-face meetings in an office setting.
  • You help clients decide which financial products best meet their needs and goals. Your job usually involves marketing specific products to clients. If you work for a bank, firm, or insurance company, you likely have specific products to sell to your clients.
  • In many cases, financial advisors purchase securities or other investments on behalf of their clients.
  • In this career, you may also directly manage and monitor your clients’ investment portfolios.
  • Financial advisors foster ongoing relationships with clients and help them adjust their strategies and investment to account for life changes, such as marriage, the birth of a child, or an inheritance.

Financial Advisor Salary and Job Outlook

According to the U.S. Bureau of Labor Statistics (BLS), the median salary for financial advisors is $88,890 per year, which is more than the average annual pay for all financial specialists ($70,770).

The bottom 10% of financial advisors make less than $41,590, while the top 10% earn more than $200,000 per year.

Factors such as experience and area of focus may affect earning potential for financial advisors. Those who work with investments such as securities and funds tend to make more than those who work for insurance companies or who advise small businesses.

For example, according to the BLS, financial advisors who work with investments make $97,000 per year, while those in insurance-related positions earn $66,000 per year, on average.

The Bureau of Labor Statistics projects that the need for personal financial advisors should increase slightly more than the demand for all jobs. The BLS foresees a 5% increase in demand for all industries, but a 7% increase in demand for financial advisors between now and 2028.

Work Schedule

The work schedule for financial advisors can vary. Many financial advisors have a regular five-day workweek with regular working hours. You can expect a typical 40-hour workweek in this career.

However, in this career, you may need to adjust your schedule to accommodate the needs of your clients. Since clients often have regular work schedules themselves, you may need to meet them in the evening or on weekends.

This job may also require you to be in the office or online during stock market trading hours to monitor your clients’ investments.

Work Environment

Financial advisors typically work in an office setting. You may sometimes meet clients outside of your office. Financial advisors also often use computers to perform research and access investment management platforms.

In this career, your job duties usually involve attending conferences or conducting seminars about finance on behalf of your employer. You could also participate in events or networking functions where you interact with potential clients and attract new business for your firm. These duties mean that most financial advisors need to travel occasionally.

Financial Advisor Education and Training Requirements

Financial advisors typically need at least a bachelor’s degree to obtain an entry-level job. Most employers do not require the degree to be in a specific subject. However, they may prefer applicants with a degree in finance, economics, accounting, statistics, or another math-related subject.

More opportunities for advancement may be available to financial advisors with a master’s degree in finance or a master’s in business administration (MBA).

Licenses and certification requirements for financial advisors depend on their area of specialization. For example, if you work as a financial advisor for an insurance company, you need to get a license to sell insurance products from the state in which you work.

Advisors who sell financial products and manage investments need accreditation from the Financial Industry Regulatory Authority (FINRA). You gain a license to sell specific investment products, such as securities, by passing a series of exams.

Some financial advisors take an exam to become Certified Financial Planners (CFPs) or Chartered Financial Analysts (CFAs). These credentials can help you gain employment and attract clients, but they are not required to get a job or advance your career.

Financial Advisor Skills, Aptitudes, and Competencies

Financial advisors need knowledge of their area of specialization and interpersonal communication skills. The specific skills that employers look for can vary depending on your area of specialization.

All financial advisors deal directly with clients, so they need communication skills. This career not only requires you to be able to explain financial matters, but you also need to be able to listen to clients’ needs so that you can customize your advice for them.

Financial advisors also need sales skills. They use these skills in two areas of their career. First, financial advisors market specific products to their clients. In a bank or insurance company, they sell their employer’s products, while financial advisors who work for a firm may get a commission if they sell specific investment products.

Secondly, financial advisors need sales and networking skills to find and attract new clients.

In addition to interpersonal skills, this career also requires hard skills, also known as technical skills. For example, financial advisors need to understand how to analyze stocks and other securities, which can include statistical modeling and technical and fundamental analysis.

Similar Jobs

Financial advisors perform many of the same tasks as other financial professionals.

Financial analysts focus on assessing market conditions and researching specific investments. Unlike financial advisors, financial analyst careers do not have a sales component, and they tend to work for commercial clients rather than individuals.

Insurance sales agents find insurance products that meet their customer’s needs. Unlike financial advisors who work for insurance companies, these professionals focus mainly on sales and do not perform an in-depth analysis of each client’s financial needs and goals.

Stockbrokers and securities sales agents sell financial products and help clients purchase stocks, commodities, and other investments. These careers are primarily sales careers, so you will not perform analysis on behalf of clients.


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