Education and Training Requirements
If financial planning sounds interesting to you, take as many business and economics classes as possible as well as mathematics. Communication courses, such as speech or drama, will help put you at ease when talking in front of a crowd, something financial planners must do occasionally. English courses will help you prepare the written reports planners present to their clients. Computer science and information technology courses will help you to learn how to use databases and conduct research on the Internet.
You will need at least a bachelor's degree in finance, economics, accounting, mathematics, business, or law to work as a financial planner. Courses in accounting, business administration, economics, finance, marketing, investments, tax law, estate planning, risk management, psychology, counseling, and public speaking will provide you with excellent preparation for this career. Those with master's degrees in finance or business administration are stronger candidates for advancement to managerial positions.
Participation in an internship at a financial planning firm or a related employer is also required. As an intern, you will receive hands-on experience working with financial planners and get a chance to explore the various aspects of the field. You will also make valuable contacts, which you might be able to use to help you land a job after you graduate.
The American College offers graduate certificates in business succession planning, and estate planning and taxation. The Investments & Wealth Institute offers an essentials of investment consulting certificate program. Fi360 offers the fiduciary essentials for advisors certificate program. Contact these organizations to learn more.
Other Education or Training
Keeping up with industry developments is key to success as a financial planner. Professional associations often provide continuing education opportunities. For example, the Financial Planning Association offers continuing education (CE) classes, workshops, webinars, and seminars on communication and organizational skills, sales and marketing, and business and practice management. The American College of Financial Services, Fi360, Investments & Wealth Institute, and the National Association of Personal Financial Advisors also offer CE opportunities. Contact these organizations for more information.
Certification, Licensing, and Special Requirements
Certification or Licensing
Education alone will not motivate clients to easily turn over their finances to you. Many financial professionals are licensed on the state and federal levels in financial planning specialties, such as stocks and insurance. The U.S. Securities and Exchange Commission and most states have licensing requirements for investment advisers, a category under which most financial planners also fall. However, most of the activities of planners are not regulated by the government. Therefore, to show credibility to clients, most financial planners choose to become certified as either a certified financial planner (CFP) or a chartered financial consultant (ChFC).
To receive the CFP mark of certification, offered by the CFP Board, candidates must meet what the board refers to as the four E's, which comprise the following:
Education: To be eligible to take the certification exam, candidates must meet education requirements in one of the following ways. The first option is to complete a CFP board-registered program in financial planning. The second is to hold a specific degree and professional credentials in one of several areas the board has approved of; these include licensed certified public accountant, licensed attorney, chartered financial consultant, chartered life underwriter, chartered financial analyst, doctor of business administration, and Ph.D. in business or economics. Lastly, applicants may submit transcripts of their undergraduate or graduate education to the board for review. If the board feels the education requirements have been met, the candidate may sit for the exam. Additionally, applicants must have a bachelor's degree in any area of study or program to obtain CFP certification. They do not need to have earned this degree at the time they take the examination, but must show proof of completion of this degree in order to complete the final stage of certification.
Examination: Once candidates have completed the education requirements, they may take the certification exam, which tests knowledge on various key aspects of financial planning.
Experience: Either before or after passing the certification exam, candidates must have three years of work experience.
Ethics: After candidates have completed the education, examination, and experience requirements, they must voluntarily ascribe to the CFP Board's Code of Ethics and Standards of Conduct and Financial Planning Practice Standards to be allowed to use the CFP mark. This voluntary agreement empowers the board to take action if a CFP licensee violates the code. Such violations could lead to disciplinary action, including permanent revocation of the right to use the CFP mark.
The American College of Financial Services offers the chartered financial consultant (ChFC) designation and other credentials. To receive this designation, candidates must complete certain course work stipulated by The American College, meet experience requirements, and agree to uphold The American College's Code of Ethics.
To maintain the CFP and the ChFC designations, professionals will need to meet continuing education and other requirements as determined by the CFP Board and The American College.
Two other organizations offer certification to financial planning professionals. Fi360 offers the accredited investment fiduciary and accredited investment fiduciary analyst designations. The Investments & Wealth Institute offers the following designations: certified investment management analyst, certified private wealth advisor, and retirement management advisor. Contact these organizations for more information.
Experience, Skills, and Personality Traits
Students should obtain as much experience in the field as possible by participating in summer internships, co-ops, and part-time jobs at financial planning firms.
Successful financial planners should enjoy helping others plan their financial futures. They need excellent communication skills in order to explain often-complicated financial products to clients. They should be good listeners in order to be able to clearly understand and implement their clients' financial goals. Other important traits include self-motivation, a willingness to work long hours when necessary, honesty and strong ethics, a willingness to continue to learn throughout their careers, strong sales and marketing skills, and comprehensive knowledge about the world of finance.