Even though there has always been a need for financial planning, the demand for qualified financial planners is greater today than ever before. An aging population of Baby boomers who are nearing retirement, insecurity in financial markets, shortfalls in pension funds, benefit reductions, and social security and medicaid hysteria have created an atmosphere of financail uncertainty and confusion that requires sound financial planning. People are paying more attention to how they spend their money, and more and more individuals and families are turning to qualified and experienced financial planners, advisors and consultants to help them plot a course for the future. There is a significant and growing demand for skilled financial planners with the right training. In fact, between 2010 and 2020 job growth for personal financial planners and advisors is projected to grow by a staggering 32%, well above the average for all other occupations in the United States.
Pay and Benefitis
As of 2010, the annual income for financial planners and advisors in the United States was roughly $65,000 a year. During the same period, the lowest ten percent of financial advisors earned less than $33,000 a year and the top ten percent earned more than $167,000 a year. However, these compensation figures only include annual salaries of financial advisors who work for corporations and do not account for bonuses–which can be quite substantial. In addition, these figures also don’t include the incomes for self-employed financial planners and advisors. It’s not uncommon to successful self-employed financial planners who earn in excess of $250,000 a year.
Financial planners typically generate income revenues in three ways. First, they charge a percentage of assets under management. For example, if a financial advisor actively manages a portfolio worth $500million, then they might charge an annual management fee of 1%, or $5million. Second, advisors earn money by charging consulting fees for estate planning and general financial planning services. It’s not uncommon for a financial advisor to charge between $800 and $10,000 to develop a comprehensive financial plan for their client’s. What they charge is typically determined by the complexity of a client’s estate and their networth. Advisors also earn commissions on the sale of various financial products.
The majority of financial planners work full-time, but its not uncommon for newbies, those just getting started, to put in 50 to 60 hour work weeks. Financial planners who’ve been in the business for a while and have an established clientele tend to work more on referal business and can look forward to shorter work weeks. Some financial planners, particularly those working for corporations and investment firms, have structured 9 to 5 work days, but most financial advisors are expected to meet with clients and hold meets in the evenings and on weekends.
Education and Training Requirements
Most investment firms and corporations looking to hire financial advisors require candidates to have at minimum a bachelor’s degree and preferrably a master’s degree in financial planning, or a related career field such as finance, business, economics, accounting, mathematics, or law. Industry specific courses including estate planning, investments, portfolio management, risk management and taxes are also also highly beneficial. Financial planning degrees and programs are growing in popularity and are now offered at several campus-based and online colleges and universities. Not surprisingly, there is growing trend among students to earn a financial planning degree or diploma online from the comfort of their home or office.
In addition to a bachelor’s degree, there are several industry specific certificates and credentials that financial advisors, planners, and analysts should considered, including Certified Financial Planner® (CFP®), Chartered Financial Consultant (ChFC), and Chartered Financial Analyst (CFA). These three designations demonstrated a professional level of knowledge and skill set within the financial planning industry and garner respect from both associates and clients. For advisors, who intend on selling stocks, bonds, mutual funds and other related insurance products, Series 6, 7, or 63 licensing through the Financial Industry Regulatory Authority (FINRA, formerly the NASD) is required.
Financial Planner/Advisor Degrees and Programs
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