How you can become a financial advisor like Suze Orman

Are you interested in all things finance? Does the thought of helping people of all backgrounds reach their financial goals interest you? Are you capable of being discreet when learning about the intimate financial details of another person? If you answered yes to all the above, you might be interested in a career as a financial advisor.

Financial advisors are needed in both good and bad economic times. Living in the throes of a pandemic has shown us that the global health crisis has impacted millions of people’s jobs and incomes. Vaccine rollouts offer hope for a return to normalcy soon, but many are still unemployed due to COVID-19’s impact on businesses.

Last month, CNBC reported that long-term joblessness has been rising in the US and poses greater financial risks for affected households. The Bureau of Labor Statistics (BLS) confirmed this — over one in four unemployed Americans have been out of work for over a year, which can affect both their short and long-term financial outlook.

Many can benefit from getting professional help when it comes to managing their finances and planning for their financial future, be it savings for retirement, buying a home, sending their kids to college, or going back to school themselves. 

The US Bureau of Labor Statistics notes that the employment of personal financial advisors is projected to grow four percent from 2019 to 2029, about as fast as the average for all occupations. As the population ages and life expectancies rise, demand for financial planning services should increase, it said.

Financial advisors use their expertise to help people decide how much money they need to save to retire comfortably, understand insurance plans that might be essential to them, and assist clients with tax issues and investment plans. 

Helping people from different socioeconomic backgrounds make informed decisions about their money means shouldering some heavy responsibility, but the job isn’t without its rewards. The US News and World Report ranked it as the fourth-best business job in 2021.

Depending on how and where you work, this career route may offer unlimited earning potential and a flexible work schedule. While some work in large financial institutions such as banks or brokerage firms, many are also self-employed. 

The US Bureau notes that the median annual wage for personal financial advisors was US$89,330 in May 2020. Your earnings could skyrocket with an advanced qualification.

How does one become a financial advisor?

Like most careers, an aspiring financial advisor will need a bachelor’s degree. Having a major in business and finance are good options, but they are not a prerequisite as many financial advisors hold degrees in other areas of study.

Speaking to US News, Michelle Bender, a certified financial planner at Potomac Financial Consultants, said having a financially relevant degree will likely help aspiring financial advisors with their exams. Taking courses in finance, investments, estate planning and risk management are also useful areas to improve your knowledge in the area.

It’s also useful to get an internship experience in the field, such as exposure to a financial advisory firm, to help students understand what they’ll face as professionals. This also improves their chances of expanding their network in the field and potentially find a mentor who can guide them towards success.

Both a degree and some work experience in the field will improve one’s chances of securing a job as a financial advisor.

Get certified

The kind of role you plan to achieve and the types of services you wish to offer will determine the licenses and certifications you need. 

Among the credentials you might want to consider getting is the Chartered Financial Analyst (CFA). Issued by the internationally recognised CFA Institute, the CFA Program is designed to equip you with the kind of expertise and real-world skills in investment analysis that will help you advance your career.

“To become a regular member of CFA Institute you will need to hold a bachelor’s degree from an accredited institution or have equivalent education or work experience,” notes the CFAinstitute.org on its website. 

The CFA holder must also have 48 months of related professional work experience in an investment related field. The three required examinations take six hours each to complete, and must be taken over several years. Test topics include accounting, economics, ethics, finance, and mathematics. 

The PFS studies estate planning, retirement planning, investing, insurance and additional areas of personal financial planning. The designation also requires three years of work experience, rigorous continuing professional education, and high ethical standards before passing the required exam.