Financial Advisor

Career Guide – Financial Advisor/ Planner

In Retail Banking by Gaurav SharmaUpdated On:

Financial Advisory might just be one of the most rewarding careers in banking and finance. You can most definitely make a lot of money if you are good, but that is true for many other careers in finance as well. What makes financial advisory great though, is that you are directly helping average people improve their financial well-being. And the better you are at helping others, the better your reputation becomes and that leads to more business for you as well. Talk about a win-win!

Because of this rather unique aspect, financial advisory has more in common with a local business than a banking conglomerate. This means that if you can build trust and a reputation in your local community, you are going to do well for yourself in the long run.

Job Description

Part 1 – Planning

The job of a financial advisor is to maximize the financial well-being of her clients. Everything that you do should ultimately be directed towards that single goal. Some of your daily responsibilities directly lead to that, while others are general administrative tasks that are indirectly related to that goal.

The most important aspect of your job as financial advisor is to first understand the financial needs and wants of your clients. You must start with a candid conversation about the client’s current financial situation, future needs, income, expenses, risk appetite, back-up plans, asset preferences and other things of that nature.

Once you have all this data, you can begin to work on an over-arching investment/ financial plan for your client. From here on out, everything you do must take into consideration this financial plan (and it must be updated at a set frequency or whenever there is a material change in the client’s financial situation).

Part 2 – Executing

The second part of the job is all about executing each client’s financial plans. This may involve the following activities:

  • Selecting products or assets to invest in on the client’s behalf after adequate research
  • Making suggestions about cash management, insurance coverage, saving requirements etc.
  • Managing a client’s portfolio of investments which includes monitoring performance and suggesting tweaks
  • Executing planned trades
  • Preparing reports, filing compliance data, conducting due-diligence, maintaining records and other such administrative tasks

I think that gives you a general idea of what to expect.

Part 3 – Growing

Finally, the last major activity is business development. This might mean getting new clients to sign with you or convincing your existing clients to switch more of your business to you. Expect a lot of meetings, calls, emails, networking events and other such typical activities that are typical of a sales role.

Working for yourself vs as an employee

Just to clarify that if you are working for a big firm, you don’t have to do ALL of these actives alone, just some of them. It depends on how big of an outfit you are working for. This is why brand-new financial advisors would most likely benefit from working at a big firm before striking out on their own.

Keep in mind that almost three quarters of financial advisor work for a firm, rather than running an independent business of their own. Not saying you can’t succeed on your own, but you are more likely to succeed once you learn the ropes first and can hit the ground running!

Financial Advisor

Skill Requirements

Investment Savvy – This is what is eventually going to determine your actual performance as a financial advisor. Soft skills like personality and communication are important to win business, but it is your capacity to judge investments that eventually determines your actual performance and whether clients will keep coming back to you.

You probably won’t be a rock star from day one but remember that you do have access to a tonne of valuable research. You don’t have to analyse every little thing on your own. For example, you can read 2-3 good stock reports and then decide whether that stock is good instead of making the excel model yourself!

Legal/ Tax Knowledge – Since you would be dealing with individuals who don’t have in-house legal or accounting departments, you would have to be aware of the legal and tax implications of your advice. Although you legally can’t give tax advice without having the requisite licenses, you still have to be aware of how everything works.

The majority of financial advisory revolves around retirement planning. So starting with that can be a good idea if you want to build your knowledge base.

Quantitate Skills – Being good at math is something that is going to help you with all banking and finance careers. After all, you are mostly dealing with numbers. But this certainly doesn’t mean that you have to do complex calculations in your head. It’s that you have to be able to figure out some things like how the fee/ interest can be calculated for different products, how probability and statistics works and things of that nature.

Being Personable/ Likable – As a front-end financial advisor, you are essentially selling your hard-skills using your soft-skills. To succeed, therefore, you need both sets of skills. There isn’t much to say here except that you really have to focus on what your core demographic likes. For example, people near the retirement age might think differently from millennials. I am not suggesting that you “fake it” but rather speak in a language that your target demographic understand.

Effective Communication Skills – None of your core technical skills will matter if you can’t get your point across well. This is simply not just a matter of having a silver tongue, but you have to make your communication effective. Some examples of effective communication:

  • Being able to simplify complex concepts with ease using graphs or other visual tools
  • Providing timely information to your clients like when they need account data for the tax season
  • Feeling what your clients pain points are and designing your solutions around that. An example might be – Determining how risk averse or risk loving each of your clients is and then pitching the appropriate solutions.

Trustworthiness and Ethicality – One might argue that trust is an important factor in almost every career, but I can’t think of any other professions where it matters more than what it does in financial advisory. This is because you are directly affecting the financial destiny of the individuals you are advising. It’s a very personal thing and not some B2B transaction.

Having solid ethics directly translates to your trustworthiness quotient over time. The general consensus that we had for “ethics” was that you have to be like Superman. When in doubt, do what Superman would do.

Experience – If you are working for a firm (which the majority of financial advisors are), you can get away with little or even no experience. This is because the firm’s reputation gets attached to you. But if you are running your own practice, you would need to showcase some solid experience to get the best clients. Which is why it is best to have a few solid years of work-ex before striking out on your own.

Logical Reasoning – You would need to have the ability to logically deduce how events can affect the valuation of different assets or otherwise impact the financial well-being of your clients. For example, if oil prices keep going down despite supply cuts, does that signal that the global economy is slowing down? What does that mean for auto sales? What does that mean for steel suppliers who supply auto companies? What does that mean for logistics cost in other industries? What should you do if you are invested in any of these companies?

High levels of Awareness – To make all these logical deductions, you have to first be aware of every major political and economic event that can have a material impact on various assets. You should at least be reading one financial paper (digital edition is just fine) daily and preferably another general one. This is true for all careers in banking and finance. Personally, I check Bloomberg and Reuters a few times a day along with some syndication service which sources articles from all over.

Day to Day Responsibilities

The first order of business for any financial advisor should be to read up on the news. I don’t mean that this should be the first thing you do but you should schedule it so that it becomes “routine. For me, this was usually during the car ride to work or when having breakfast.

How your day proceeds from there depends a lot on whether you have a practice of your own or work for a bigger firm. Larger firms would usually have a meeting to discuss important events and any action items for the day. If you have your own practice, it could just mean planning your schedule for the day.

For the rest of the day you would mainly be doing three activities:

  • Trying to expand by prospecting for new clients. This would involve some combination of cold-calling, setting up meetings, planning/ participating in networking events, following up on leads, preparing presentations and so on. How much prospecting you do obviously depends on your current work load and bandwidth. If you plan to join a larger firm, most of the prospecting is usually led by the more senior people.
  • The vast majority of your time would be spent on servicing existing clients. Everything from answering queries, discussing future plans, updating investment plans and so on. This is what separates you from a robo-advisor, so you better get really good at it!
  • There is also a lot of routine administrative activity like filing compliance reports, updating client KYC data, record and bookkeeping, managing staff etc.

One of the most interesting things about being a financial advisor is that you can run a business of your own or join a bigger firm. This flexibility is rather unique in finance as you will never find one-man investment banks or credit card issuers. This means you have some real options in how you want to structure your days, months, and even your entire life!

How to Become a Financial Advisor?

The easiest way to become a financial advisor is by joining a big firm (something like a Fidelity or Charles Schwab) as a trainee. Generally speaking, the bigger firms usually have better and more thorough training programs, but you won’t be given a lot of responsibility to begin with. Conversely, you will likely be expected to hit the ground running at a smaller firm without too much time spent on orientation.

So it becomes a trade-off between getting down and dirty on day one at a smaller set-up or spending several months doing grunt work but having access to the best tools, the best training programs and a wide variety of specialisation options.

Academic Qualifications

In terms of education, a finance focused bachelor’s degree should suffice. Finance, Economics, Business majors would be preferred but are by no means mandatory. As long as you display the necessary acumen to break down financial products, you should be fine with even non-mathematical majors. Doing an internship during college in a related role will usually help your chances later on to get a full time offer as well so that is highly recommend.

Having an MBA, like for almost all finance roles, will definitely help. You would almost always join at a more senior level with an MBA, with a batter package and better hours. There is a lot less grunt work at that level too.


This is where things get really interesting for Financial Advisors because they are spoilt for choice!

  • First up is the Certified Financial Planner (CFP) certification which is generally the most popular. It is offered in the US by the CFP board and internationally by FPSB. It does require some prior work experience in the field and the exam can be gruelling but not as bad as the CFA. This is probably the best option as its curriculum is purpose-built for financial advisors. It covers courses like estate planning, retirement planning, tax planning etc. which is precisely what financial advisors need to know.
  • The CFA (Chartered Financial Analyst) certification is the gold standard in all of finance and financial advisory is no exception. But a CFA can take a while to get as you need four years of work experience requirements in addition to three separate exams. The CFA curriculum covers a lot of investment related stuff and definitely a lot of portfolio management, but it is not purpose built for financial advisors. However, the CFA more than makes up for it in terms of brand value and you can have much better options to move laterally with a CFA.

Mandatory Requirements

There are also some FINRA certifications (in the US) that are mandatory if you are to ever to sell any investment products. These can vary from state to state but Series 6, 7, 63, 65 and 66 are usually the most common ones.

In the UK, you need to get a qualification recognized by the Financial Conduct Authority (FCA).

Salary and Bonus

The median salary for financial advisors in the US is around USD 90K. However, this can be a bit misleading as this does not account for experience, location, company size and other such factors which can totally skew this number.

An even more important point to consider is whether you are self-employed or working for a firm. Because if you are self-employed, you don’t really have a salary – you run a business. And this business can be loss making or earning you several million dollars a year! Yes, there are financial advisors who make several million dollars a year and the only staff they have are assistants, bookkeepers and such.

When working for a firm though, your compensation is slightly less variable, but it still depends on performance. In your first year itself, you can expect a minimum of USD 60K which can go up to USD 90K at the more reputable firms. There is usually a variable component over and above that figure which can easily equal tens of thousands of dollars even in your early years. Expect to earn around USD 200K after a few years of experience.

Another important thing to remember though is that financial advisors do usually have a commission sharing arrangement in place. This commission can even run into hundreds of thousands of dollars which makes financial advisory an interesting career choice if you are a good salesman!

A Note about Location

An interesting aspect of being a financial advisor is that you have a lot more flexibility in choosing a location. Of course, you will get paid the most in California or NYC (and expenses are also correspondingly higher there), but you can just as well choose to be a big fish in a small pond and still make more money. For corporate/ investment banking and even wealth management, you have to stick to the major financial hubs. But as a financial advisor you can do well even in small towns as the competition would be much lower there.

This can be ideal for someone just looking for a simpler lifestyle in smaller cities or towns.

Career Path and Progression

There are essentially two main choices:

Option 1: Working for a firm

Three quarters of financial advisors are employees who work at companies rather than run their own business. For these people, the career path is pretty simple. You start as an intern or a trainee and work your way up the chain. At a larger firm, you would usually just look at one aspect of financial advisory rather than managing everything from research to administration to business development to operations as you would in your own firm.

This means that you can specialise and keep growing within your vertical. If you happen to focus on certain specific niches, you have the flexibility to move outside the advisory industry. For example, if you focus on investments in debt or equity and are good at it, you can become a trader/ researcher.

Option 2: Starting your own financial advisory practice

If you decide to start your own financial advisory practice though, your career could look a lot different. Usually, it is people who have a few years under their belts that start their own firms which means they already know what to do and can start courting clients from day one. Keep in mind that poaching your previous employer’s clients can land you in legal trouble in certain cases.

The thing with starting off on your own though is that you become extremely sensitive to both the upside and downside risks. If you do well, you can make millions. However, there is a reason so many people just prefer to work for a firm. Most people just prefer a fixed pay check of 100K-200K a year rather than risking it as an independent business. The question is, which category do YOU fall into?

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About the Author

Gaurav Sharma

Gaurav (LinkedIn) started his finance career as an intern in Citi’s Institutional Clients Group in 2009, eventually ending up as an Associate Director at Standard Chartered Bank’s Corporate & Institutional Banking division a few years later. By 2016, he was an independent consultant helping FinTech start-ups in London with product development and launch. Gaurav also helps banks with their digital banking initiatives and advises PE & VC firms with investments in the financial services and FinTech sectors. Gaurav writes on topics ranging from EU banking regulations and tradional finance to Blockchain startups and the future of banking itself! He has an Engineering degree in Computer Science and an MBA with a double major in Finance and Marketing. He is also a Certified Financial Risk Manager.