How to Become a Financial Planner

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How to Become a Financial Planner: Career Path Guide

Becoming a financial planner typically requires a bachelor’s degree in a field such as accounting, finance, economics or business. While not legally mandatory, most employers prefer to hire candidates who hold the Certified Financial Planner (CFP) designation in addition to their degree.

 

If you want to become a financial planner, you first need to determine if this career path is a good fit for your skills, interests and personality traits. If the following description sounds like you, then you’re probably well suited for this career:

 

• You are interested in helping people prepare for their financial futures

• You enjoy getting to know the needs and goals of clients

• You have an interest in providing guidance and advice to others

• You are trustworthy and have a high level of integrity

• You have an interest in a career that has unlimited earning potential

• You are able to understand complex financial documents such as wills, insurance policies and financial statements

 

Below we've outlined what you'll need to become a financial planner. We've also included helpful information for this career, such as job description, job duties, salary expectations, a list of possible employers and much more!

 

 

Education Needed to Become a Financial Planner

The educational requirements for becoming a financial planner (certified or otherwise) vary by region, and may also vary by employer.

 

Technically, you can become a financial planner without formal education and without certification, although many who are serious about a career as a financial planner choose to pursue certification due to the many recognized benefits of being certified.

 

For the purposes of this career guide, we will outline the education you need to work as a certified financial planner (CFP).

 

Education Required in Canada

To become a financial planner in Canada, aside from the Certified Financial Planner (CFP) core courses that you pursue as part of your licensing, you typically need at least a bachelor’s degree in a relevant field to work for a reputable employer.

 

A degree in an area such accounting, finance, economics, business or mathematics is good preparation for this career, as are courses related to investments, taxes, insurance, estate planning, and risk management.

 

Some employers may even require that you earn a master’s degree in an area such as finance or business administration. A degree of this level can also be quite helpful for attracting new clients, and helpful if you eventually plan on moving into a management position with a financial product brokerage.

 

Success Tip: College and university courses and programs in financial planning are becoming more and more available in Canada and the United States. If you are interested in becoming a financial planner, check for these programs and courses in your area!

 

Education Required in the United States

To become a certified financial planner in the United States, you need to hold a regionally accredited college or university bachelor’s degree or higher (accreditation must be recognized by U.S. Department of Education at the time the degree is awarded).

 

You do not have to have to a degree prior to writing a certification exam, although you must finish your degree within 5 years of passing the exam.

 

There are no specific requirements as to what field of study your degree should reflect, although a degree in a field such as such accounting, finance, economics, business or mathematics is highly applicable to a career as a financial planner. 

 

 

 

Financial Planner Job Description

Financial planners are responsible for using their skill and expertise to help their clients (individuals and families) develop financial plans, for the ultimate purpose of ensuring their long-term financial goals are achieved.

 

In order to prepare a plan for their client’s future, financial planners must analyze aspects of a client’s current financial situation, such as their net worth, financial resources, lifestyle preferences and goals. They must then use this information to make recommendations regarding how clients can achieve their financial goals.

 

 

Financial Planner Job Duties

Financial planners are generally responsible for performing the following duties:

 

• Establishing the client/planner engagement

• Determining the client’s long-term financial goals and expectations

• Identifying the client’s present financial status and identifying any problem areas and opportunities

• Helping clients gather financial information, such as tax returns, insurance policies, etc.

• Explaining, comparing and possibly selling financial products

• Meeting with financial product representatives

• Developing and presenting a financial plan

• Helping clients implement plans or refer them to other financial services or professionals

• Monitoring how a client is progressing with their financial plan

• Building and maintaining a client base

• Maintaining detailed client files

 

 

Certification Needed to Become a Financial Planner in Canada

In Canada, there is no legislation surrounding the work of financial planners. With the exception of Quebec, people who call themselves financial planners are not required to obtain any credentials in Canada.

 

Although it may not be legally mandatory, having the Certified Financial Planner (CFP) designation is largely regarded as the industry’s gold standard. The CFP designation serves to communicate the holder’s expertise and credibility, as well as holds them accountable to a professional body, namely the Financial Planners Standards Council (FPSC). In order to receive authorization to use the CFP credential, candidates must achieve the following:

 

1. Enroll in an FPSC-approved Core Curriculum program

2. Write the FPSC Level 1 examination

3. Take an FPSC-approved Capstone Course

4. Write CFP Examination

5. Complete 3 years of qualifying financial planning work experience

6. Pay an ongoing fee

 

 

Certification Needed to Become a Financial Planner in The United States

In the United States, as in Canada, there is no legislation surrounding the work of financial planners.

 

Although it may not be legally mandatory in the United States, having the Certified Financial Planner (CFP) designation is largely regarded as the industry’s gold standard. CFP professionals have completed extensive training and experience requirements and are held to rigorous ethical standards.

 

To become certified, candidates are required to meet the following initial certification requirements:

 

Education: In order to become a Certified Financial Planner (CFP) you must complete a college-level program of study in personal financial planning, or an accepted equivalent, including completion of a financial plan development (capstone) course registered with CFP Board. You must also have earned a bachelor’s degree from a regionally-accredited college or university in order to obtain CFP certification.

 

Examination: After you have successfully met the education coursework requirement, you will be eligible to register for the CFP Certification Examination.

 

Experience: To qualify for certification, you must have 3 years of professional experience in the financial planning process, or 2 years of apprenticeship experience that meets additional requirements. The necessary experience may be acquired through a variety of activities related to financial planning, including personal delivery, supervision, direct support or teaching.

 

Ethics: Once you have completed the education, examination and experience components of the CFP certification process, you will be directed to complete a CFP Certification Application, which is essentially a background check. Authorization to use the CFP marks will not be approved until the background is concluded successfully.

 

Please Note: In Canada and the United States, individuals holding professional designations pre-approved by the CFP Board (such as Ph.D.’s in business, attorneys, Certified Public Accountants (CPA), Chartered Accountants (CA), Chartered Wealth Managers (AAFM), Chartered Life Underwriters (CLU), Chartered Financial Consultants (ChFC), and Chartered Financial Analysts (CFA)) are entitled to challenge the exam without having to complete the education requirements.

 

 

 

 

 

Skills Needed to Become a Financial Planner

In order to become effective in a career as a financial planner, you need to posses a certain set of skills. These skills will allow you to perform your job duties with competence, and you will need them in order to develop and maintain a profitable client base.

 

• Able to develop rapport with customers

• Able to apply listening skills in order to determine client needs

• Able to understand complex financial documents such as wills, insurance policies and financial statements

• Knowledge of financial products (knowledge may be acquired during on-the-job training)

• Entrepreneurial and marketing skills

• Networking and client acquisition skills

• Able to balance the needs of clients with the range of financial products being offered

• Excellent presentation skills

 

 

Characteristics Needed to Become a Financial Planner

In order to enjoy performing the duties of a financial planner, you need to have certain personality traits. Taking enjoyment from your job duties is important, as it helps you maintain a positive attitude towards your work, which can lead to having a long and successful career.

 

• Enjoy helping people financially prepare for their futures

• Enjoy getting to know the needs and goals of clients

• An interest in providing guidance and advice to others

• Respect for client confidentiality

• Willing to keep up to date with advancements in the industry, including financial products and regulations

• An interest in a career with unlimited earning potential

• Willing to ‘cold call’ and ‘door knock’ to develop your client base

• An interest in life insurance, health insurance, wealth accumulation, and savings products

 

 

Financial Planner Salary

The salary level of financial planners can vary greatly depending on factors such as whether they are compensated by commission or salary, whether or not they receive bonuses, their job performance, whether or not they are self-employed, the size and type of their employer, their level of experience and many other factors.

 

There is no salary information available from reliable sources specifically for the career Financial Planner. We can however, get a good idea of the salary level they earn by looking at the earnings of workers in closely related careers.

 

Financial Planner Salary Alberta: According to the 2011 Alberta Wage and Salary Survey, Albertans working in the Other Financial Officers occupational group earn an average salary of $58,626 per year.

 

Financial Planner Salary Canada: According to Service Canada, the average salary level of Canadian workers in the Other Financial Officers occupational group is $62,107 per year.

 

Financial Planner Salary United States: According to the United States Bureau of Labor Statistics, the median salary level of American workers in the Personal Financial Advisors occupational group is $67,520 per year. The lowest 10% of yearly earnings of workers in this occupational group are below $32,280, and the top 10% are above $187,200 per year.

 

 

How Do Financial Planners Get Paid?

Financial planners may be remunerated in one of the following ways:

 

• Commission based on the cost of products purchased by the client

• A percentage of the assets they manage on the client’s behalf

• A fee-for-service model based on hourly or set fees, billed directly to the client

• A base salary from their employer (possibly with a commission or bonus structure on top of the base salary)

 

 

Who Employs Financial Planners?

Many financial planners are employed on a full-time basis or contract their services to larger firms and organizations, such as banks. Other financial planners may be employed by small financial planning businesses or are self-employed. Below is a list of the types of organizations that hire financial planners:

 

• Banks and other lending institutions

• Trust companies

• Stock brokerage firms

• Insurance agencies

• Legal firms

• Accounting firms

• Mutual fund companies

• Private financial planning companies

• Self-employment 

 

 

Financial Planner Jobs

Our job board below has "Financial Planner" postings in Canada, the United States, the United Kingdom and Australia.

Financial Planner Work Environment

Working Hours: Most financial planners work full time, and some work more than 40 hours per week. They typically work normal office hours during the week, while sometimes having to work during the evenings and weekends, in order to attend meetings with existing and potential clients.

 

Work Setting: Financial planners may work alone or with others in fully equipped offices. Some financial planners work from home. Financial planners often have to travel to meetings at clients' homes or places of business. They must be comfortable meeting new people, and developing professional relationships, as they frequently have to interact with existing and potential clients.

 

Working Conditions: As with any other career, the work of financial planners can be stressful, such as when they are having trouble finding new clients, and when their clients are dissatisfied with the service they are receiving. Their work can also be highly satisfying, such as when they have clients who are successfully following their financial plans.  

 

 

Careers Similar to Financial Planner

Listed below are careers in our database that are similar in nature to Financial Planner, as they may involve many of the same skills, competencies and responsibilities.

 

Budget Analyst

Credit Counselor

Financial Advisor

Insurance Agent

Investment Analyst

 

 

Financial Planner Career: References

To find out more about what a financial planner does, how much they earn, and other details of this career, please consult the following resources:

 

Alberta Learning and Information Service website: alis.alberta.ca

CFP Board website: www.cfp.net

Financial Planning Standards Council website: www.fpsc.ca

Mount Royal University website: www.mtroyal.ca

United States Bureau of Labor Statistics website: www.bls.gov

 

 

Scholarships for Becoming a Financial Planner

Scholarships listed for majors that apply to becoming a Financial Planner can be found on our All Scholarships by Major page.

 

Success Tip: Be sure to apply for any scholarships that you even barely qualify for, as there are millions of dollars of scholarships that go unused every year due to a lack of applicants!

 

 

Becoming a Financial Planner: Applicable Majors

Studying one of the university majors listed below is an excellent starting point to becoming a financial planner. Click on the links to find out what else you can do with these majors!

 


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