Financial planning is a growing career field. As more and more people are taking a hard look at their futures, the demand for people who can offer financial planning services is growing. Financial planners work with clients to help them choose and maximize their investments and insurance products. This is a lucrative career field with excellent income and growth potential.
According to the Bureau of Labor Statistics, the average pay for personal financial advisors is $90,530, with more 270,000 employed in the field around the country. This particular career field is growing at a faster-than-average pace. If you love working with people and numbers, this could be a great career option, as long as you have the right training in place. Here is a closer look at what this career involves and how it can benefit your future.
What Is a Financial Planner?
A financial planner is a professional who sells financial products to help clients make the most out of their future financially. This job can go by several names, including financial planner, financial advisor and financial consultant. A financial planner makes money when selling things like investments, insurance, college funding products and similar products. These professionals will help their clients analyze and manage their investments so they can plan for retirement, college funds and estate management.
Financial planners can work in financial planning and investment firms or for insurance companies. Many are also self-employed, working directly with clients to avoid the overhead of working for a firm. The work, whether in a firm or as a self-employed individual, involves working one-on-one with clients to help them maximize their investments.
Who Should Consider a Career in Financial Planning?
Before starting the training for a career in financial planning, you will want to consider if the career field is right for you. First, consider if you are comfortable making sales. While financial planning doesn’t look like sales, it really is, and the products you are selling are risky in nature. Financial planners also have no guarantee that the products they sell will always work, as investments always carry a measure of risk, so you must be comfortable with this.
Financial planners need communication skills. While they do not have to have extremely extroverted personalities, they do need to be comfortable and confident when talking with clients, with the ability to sound knowledgeable about the products being offered.
A strong understanding of math and the ability to work with numbers well is also a critical skill for financial planners. If you do not enjoy math or struggle with it, this may not be the right career for you. Financial planning involves daily work with numbers.
If you feel that this is the right career path for you, you will need to take the right coursework and prepare properly. Here are some guidelines to help you get started on the right path.
Getting the Right Education
Because a financial planner works with other people’s money, those interested in starting a career in this field will need proper training to ensure they can manage the money of others accurately and according to strict standards of compliance. The training for financial planning starts with the right undergraduate degree. Most financial planners will study math, business, law, finance or accounting. Their training may also include supplemental classes in investment topics, like taxes and estate planning. Risk management training can also help support this career choice.
Many financial planners will pursue certification. While it is not required, it can help open more employment opportunities and give the financial planner a wider range of products to sell. Certification can also make the financial planner even more credible to potential clients. Common certifications include Chartered Financial Consultant, Chartered Financial Analyst and Certified Financial Planner. These require additional examinations.
Financial Planning Licensure
Most states do not require financial advisors to have licenses to begin working. However, if a financial planner wishes to sell certain products, like stocks, bonds, insurance and mutual funds, then he or she will need to gain licensure through the Financial Industry Regulatory Authority. You can get the necessary license by passing the Series 7 and Series 6 examinations.
What is the Series 7 Exam
The Series 7 licensing exam is considered the basic entry-level exam for brokers who wish to work in the securities industry. It covers the following topics:
- Debt instruments
- Investment risk
- Retirement plans
- Packaged securities
- Client interaction
After successfully passing the Series 7 exam, you will be able to manage most types of securities except commodities and futures. Also, the test does not cover real estate or life insurance.
In order to take the Series 7 exam, you must be sponsored by a financial firm that is a Financial Industry Regulatory Authority member. To sponsor you, the firm will file Form U4 for their candidate.
To pass the Series 7 exam, you must get a score of 72%. The test itself is taken in two parts, with 130 questions in a three-hour test period, followed by a one-hour break and a second three-hour test period with an additional 130 questions. Only 250 of the questions count for the student’s score.
What is the Series 6 Exam?
The other exam you may need to take for licensure is the Series 6 exam, which is also called the Investment Company and Variable Contracts Products Representative Qualification Examination. The Series 6 exam qualifies you to become a registered representative. After passing, you would be able to sell variable life insurance, variable annuities, mutual funds and unit investment trusts. This exam has 100 scored questions and 5 pretest questions that are not scored. You must complete the test in 2 hours and 15 minutes. A passing score is a 70%.
The exam itself covers specific areas of financial planning. These include:
- Securities and tax regulations
- Securities markets
- Economic factors
- Investment securities
- Evaluation of customers
- Investment company securities
- Variable contracts
- Working with customer accounts
The test is broken up into six specific sections, with 43% of the test covering interactions with customers. Because yous only need a 70% to pass, you should focus strongly on these customer interactions in your study and preparation.
Like the Series 7 exam, the Series 6 exam requires sponsorship from a qualified firm or company. Often, the sponsoring company will be the one you are applying to work for, and sponsorship is part of the employment agreement.
Finding a Sponsor
If you are interested in pursuing a career in Financial Planning, you will want to start with an undergraduate degree in the right field. Then, add the preparation coursework for the Series 7 and Series 6 exams. After graduating, start applying to firms who could serve as your sponsor. After landing a job, your employer will sponsor you for the exams.
How to Prepare for Series 6 & 7 Exams
Once you have sponsorship in place, you will want to spend some time preparing for these exams. Many students will do so through additional coursework, either during their undergraduate training or in a supplement to their degree program. Post University’s Investment Company and Variable Products course is a great way to prepare for the Series 6 exam, while Post University’s General Securities Brokerage Theory and Practice course is an ideal option to prepare students for the Series 7 exam. These programs are offered as part of Post University’s Corporate Partnerships programs, which allow corporations to choose the education products they need to make their employees successful.
If you can, take a practice exam. This may be part of your preparation coursework. This will give you an idea of the types of questions that will show up on the actual exam, as well as the format of the exam.
When taking the exam, remember that both tests are timed. Spending too much time on any one question will mean that you may not complete the exam. If you find that a question or two is too hard to understand or require too much time, use the computer system to flag the question and move on. Finish the other, simpler questions, and then come back to the harder ones if you have time remaining. This will help you manage your time more effectively.
Once you are done with the test, don’t go back and change your answers. In most instances, your first instinct is the correct answer, particularly if you have prepared well.
Financial planning is a lucrative and rewarding career option. With the right training, you will be equipped to take the necessary licensure exams so you can launch your career successfully. For more information about training and preparing for a financial planning career, contact Post University to learn more about the necessary coursework.