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Financial Planner Job Description, Career as a Financial Planner, Salary, Employment

Definition and Nature of the Work, Education and Training Requirements, Getting the Job

Education and Training: Varies—see profile

Salary: Median—$62,700 per year

Employment Outlook: Very good

Definition and Nature of the Work

Financial planners help individuals and groups plan the use of their savings, income, and investments. Some are self-employed consultants who offer workshops that teach people how to analyze their own financial situations. Other financial planners operate financial planning businesses or are employed by insurance companies and financial institutions—savings and loan companies, investment services companies, and banks—to sell their company's financial products. Such products might include family budgeting schemes, mutual funds, individual retirement accounts (IRAs), insurance, real estate, or tax-sheltered investment plans.

Financial planners help individuals examine their immediate and long-term financial situations. The job of the financial planner is to help each investor decide what kinds of investments are best. They advise people on what types of investments to put their money in as well as the timing of major expenditures, such as buying a house or starting retirement.

In order to be effective, financial planners must be familiar with legal restrictions and laws concerning retirement plans, tax shelters, insurance, and trusts. They must be skilled at working with numbers and budgets and be able to understand complicated financial and legal documents. In addition, they should be articulate, persuasive, and have sales ability to build a clientele. Financial planners are also sometimes called personal financial analysts, personal financial advisers, or financial consultants.

Education and Training Requirements

The majority of workers in this occupation are college graduates. In fact, a growing number of colleges offer programs specifically for financial planners. Although few employers require such specialized academic training, it is helpful to take courses in marketing, accounting, business law, economics, and financial and estate planning. In preparing to become a financial planner, a person must have good math skills and the ability to work with budgets and accounting systems.

The Certified Financial Planner (CFP) Board of Standards offers a CFP credential for people who have some experience in financial planning. To acquire a CFP, a candidate must pass an examination that covers subjects such as financial planning processes, insurance and risk management, and taxes and retirement planning. Although the CFP designation is not needed to become a financial planner, it is helpful for advancement, especially for someone working for a big investment firm.

Many financial planners obtain additional training in insurance, stocks and securities, taxes, or banking, depending on their special field. Those interested in working with securities often seek certification from the National Association of Security Dealers. Some states have bonding and licensing requirements for people who work in stocks, bonds, and securities. Individuals should contact their state government for specific requirements that may apply to financial planners.

Financial planners must be skilled at working with numbers and budgets and be able to understand complicated financial and legal documents. (© Bill Varie/Corbis.)

Getting the Job

The best way to get a job as a financial planner is to apply directly to the company or financial institution for which you would like to work. Newspaper classified ads and ads on the Internet may also offer job leads. Private employment agencies that specialize in placing workers in the field of finance may also list openings.

Advancement Possibilities and Employment Outlook

Financial planners can advance by expanding the areas of their expertise and thus increasing the range of financial services or products they handle. In some companies advancement to positions of greater responsibility depends on the financial planner's ability to generate high commissions. Some planners open their own financial planning businesses. Financial planners also might advance by becoming licensed as securities brokers.

According to the U.S. Bureau of Labor Statistics, personal financial planners held 158,000 jobs in 2004. Employment of financial planners was expected to grow at a faster rate than that of all occupations through the year 2014. The increasing number of investment alternatives and continuing changes in tax laws should lead to high demand for people employed in financial planning. As the baby boomers reach retirement age, more and more will be turning to financial planners to secure their financial future. The turnover rate is high, however, owing to the competitive nature of work in this field. Many beginning financial planners fail to establish a sufficiently large clientele and leave the field.

Working Conditions

Financial planners work in offices and in the field, either alone or in teams. They may hold financial planning workshops with local community groups or at adult evening schools. Some financial planners meet their clients at their homes or businesses.

Financial planners sometimes work more than forty hours per week, especially in the beginning when they are trying to establish a clientele. Some financial planners work evenings and weekends to meet with clients.

Where to Go for More Information

American Academy of Financial Management
2 Canal St., Ste. 2317
New Orleans, LA 70130

Certified Financial Planner Board of Standards, Inc.
1670 Broadway, Ste. 600
Denver, CO 80202-4809
(303) 830-7500

Financial Planning Association
1600 K St. NW, Ste. 201
Washington, DC 20006
(800) 322-4237

Earnings and Benefits

Earnings of financial planners vary widely depending on their experience and the services they perform. Financial planners who are self-employed may charge a flat fee based on a percentage of the value of their client's investment. Fees are also sometimes negotiated on an hourly rate. Many financial planners who sell financial products are paid primarily on a commission basis. Some receive supplementary salaries that vary depending on the employing company. The median annual salary for financial planners was $62,700 in 2004, according to the Bureau of Labor Statistics. Experienced financial planners earned $108,280 or more per year. Some financial institutions and insurance companies offer benefits that include paid holidays and vacations, health and life insurance, and pension plans.

Additional topics

Job Descriptions and Careers, Career and Job Opportunities, Career Search, and Career Choices and ProfilesAccounting & Finance