How to Advance (Advancement)
Although not always required, certifications enhance professional standing and are recommended by employers. Personal financial advisors may obtain the Certified Financial Planner (CFP) credential. This certification, issued by the Certified Financial Planner Board of Standards, requires 3 years of relevant experience; the completion of education requirements, including a bachelor's degree; passing a comprehensive examination, and adherence to a code of ethics. The exam tests the candidate's knowledge of the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, and investment and estate planning. Candidates are also required to have a working knowledge of debt management, planning liability, emergency fund reserves, and statistical modeling.
Personal financial advisors have several different paths to advancement. Those who work in firms may move into managerial positions. Others may choose to open their own branch offices for securities firms and serve as independent registered representatives of those firms.
Personal financial advisors held 208,400 jobs in May 2008. Jobs were spread throughout the country, although a significant number are located in New York, California, and Florida. About 63 percent worked in finance and insurance industries, including securities and commodity brokers, banks, insurance carriers, and financial investment firms. About 29 percent of personal financial advisors were self-employed, operating small investment advisory firms.
Employment of personal financial advisors is expected to grow much faster than the average for all occupations. Despite strong job growth, keen competition will continue for these well paid jobs, especially for new entrants.
Personal financial advisors are projected to grow by 30 percent over the 2008–18 period, which is much faster than the average for all occupations. Growing numbers of advisors will be needed to assist the millions of workers expected to retire in the next 10 years. As more members of the large baby boom generation reach their peak years of retirement savings, personal investments are expected to increase and more people will seek the help of experts. Many companies also have replaced traditional pension plans with retirement savings programs, so more individuals are managing their own retirements than in the past, creating jobs for advisors. In addition, as people are living longer, they should plan to finance longer retirements.
The growing number and assets of very wealthy individuals will help drive growth of private bankers and wealth managers. The need for private bankers to explain and manage increasing complexity of financial and investment products will continue to drive growth.
Personal financial advisors will face keen competition, as relatively low barriers to entry and high wages attract many new entrants. Many individuals enter the field by working for a bank or full-service brokerage. Because the occupation requires sales, people who have strong selling skills will ultimately be most successful. A college degree and certification can lend credibility.
Median annual wages of wage and salary personal financial advisors were $69,050 in May 2008. The middle 50 percent earned between $46,390 and $119,290. Personal financial advisors who work for financial services firms are often paid a salary plus bonus. Bonuses are not included in the wage data listed here. Advisors who work for financial investment or planning firms or who are self-employed typically earn their money by charging a percentage of the clients’ assets under management. They may also earn money by charging hourly fees for their services or through fees on stock and insurance purchases. Advisors generally receive commissions for financial products they sell, in addition to charging a fee. Wages of self-employed workers are not included in the earnings given here.
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