What it Takes to Become a Financial Advisor in the United States

There is a great deal of misunderstanding about what it takes to become a financial advisor in the United States. What is important to understand is that while financial advisors have the potential to make a substantial amount of capital, they also have strict qualifications and standards that they must adhere to. For this reason, it is important to verify whether you have the necessary experience and qualifications to become a financial advisor. Financial advisors usually need to have many years of experience working in the industry before they become a financial advisor. This allows them to have a clear vantage point to which they will be able to advise clients effectively.

When you are trying to figure out whether being a financial advisor in the United States is a viable possibility for your career, it is wise to consider the conversation below:

Steps that Must Be Taken to Become an Effective Financial Advisor

There many steps associated with becoming a financial advisor. The following list is a general guide to how to pursue a rewarding career as a financial advisor:

Earn an Undergraduate Degree

Even though it is quite difficult to decide what major you choose in the United States, for those that would like to be involved in the financial sector need to head down that path early. Ideally, those interested in choosing a finance career should elect to study Economics, Business or Statistics. These degrees will allow you to obtain the proper knowledge to have a career in the financial sector.

Customize Your Internship Choices

During the academic semester, you should have an internship at least one day per week. This experience grows your personal network of contacts and also gives you more experience on your CV for future entry level job opportunities. Make sure to focus heavily on the financial sector with large brand name banks or financial firms. These internships may open doors for you later on.

Have a Summer Job in the Industry

Having a Summer job and an internship in the industry are two entirely different tasks. The internship will be more informal; however, the Summer position will make you work a full day and experience what the reality of the financial industry is. This is something that will provide you with solid work experience that will be a tremendous value to your CV. This experience could shed light on which focus you would like to possess within the financial sector.

Take Licensing Exams

There are several different licensing exams to choose from. The ones that you are able to pass will have a large influence on your salary. Some examples of the various exams that you can sit for are: Certified Financial Planner (CFP), Personal Finance Specialist (PFS), Chartered Financial Consultant (ChFC), and Chartered Financial Analyst (CFA). These exams are quite challenging and competitive. Be sure that you sign up for a review course and study to the best of your abilities. This will help you to have the results that you are seeking and the competitive job application to land your first full time position.

Look for Your First Full Time Position

Your first full time position will be paramount to the direction that you will go in the long term. You want to find a major firm that will give you real experience for the first two to five years. This will shed light on what area of the financial sector is ideal for your skillset. Once you determine this, you will know what potential graduate degrees that you would like to pursue to receive a major salary increase.

Gain Work Experience

It is essential that you take the work experience that you receive seriously. This is something that entry level associates do not always appreciate because they know they are going to graduate school. In order to be the most successful financial planner, you have to be familiar with the industry. The work experience that you receive can also lead to a favorable letter of recommendation from your employer to your graduate school of choice. Additionally, those that take this experience seriously can even work during graduate school and ultimately, retain a better position after finishing.

Return to Graduate School

Graduate school these days is a must to get the high paying positions. The best degrees to consider are an MBA or an MFA. That said, an MBA is usually the best because it provides you with the most options within the business world that may not always fall within the financial sector. Bear this in mind as you may begin in the financial sector and then transition due to the natural evolution of your career. It is best for you to leave as many doors open for you as possible due to the unique climate that exists in the business world and how norms are periodically fluctuating.

Specialize in Your Niche

Once you finish graduate school, you should be able to hone in on your niche and excel there. Due to your prior experience and qualifications, you will be able to become an authority in your field. You should publish articles, keep learning, and focus on your personal brand. Remember that in the financial sector, advising is client based and you have to present your own personal brand to clients in order to make substantial capital with the major players.

Legal Limitations that Financial Advisors Have

One of the primary legal limitations that concern financial advisors is a conflict of interest or any form of insider trading. Remember that many times, these roles advise on investing in a very high amount of capital. It is important that financial advisors are aware that there are conflicts of interest that arise when the financial planner has an investment in the company that they are advising the individual to invest in. The general rule of thumb is that if there is any potential for the financial planner’s mental judgement to be clouded to the point where they are no longer protecting their fiduciary duty to their client, then there is a conflict of interest. In terms of insider trading, there are protections in place that regulate fair trading. Financial planners cannot give or receive inside tips. This will be a major issue for their career and many times, they will lose all their license as a result.

Is There an Ethics Code Available?

There is an ethics code available to professionals in the financial sector. It is important that these standards are followed. For those professionals that do not follow such a standard, there is a CFB Board ready to take complaints and revoke certifications when necessary. If there is a complaint that is filed to the CFB Board that is substantially serious, it will be also forwarded to FINRA and the U.S. Securities and Exchange Commission. In terms of violations, it is quite difficult for a professional in the financial sector to come back from accusations. For this reason, ethical violations should be taken seriously in order to preserve one’s career and reputation.

Concluding Remarks on the Subject

Becoming a financial advisor is a rewarding career path. That said, it does take many years of work and preparation in order to succeed at this level. It is quite important to ensure that it is the right career path before undertaking such a process. For those that have a passion for the industry and the right experience, it is important to invest the proper time and capital in order to become prepared for a career in the financial sector. Doing so will be a considerable value to you. Once you have achieved your career position, you must follow the ethical rules and regularly subscribe to them. If you fail to do so, you may end up losing your career as a result.  In sum, it is important to work diligently and ethically in the financial sector. Should you do so, you will have a rewarding and financially lucrative career ahead of you.