Becoming a Financial PlannerThe continued growth in the personal financial planning industry is driven largely by two diametric factors: An increase in the accumulation of wealth resulting in more high net worth individuals and families than ever before in America’s history, and recent market volatility leading to dramatic losses in self-managed, employer-sponsored retirement plans. The unprecedented growth in the number of high net worth individuals and families was recently illustrated by the 2011 Deloitte Analysis and Oxford Economics report, which revealed that 1.5 million American households have amassed net  worth’s of $1 million dollars or more in the past three years alone. A projected 10.1 million more are expected to achieve this benchmark in the next decade. The Certified Financial Planner Board of Standards published the results of a recent survey of America’s middle-income households showing that nearly a third have retained financial planners to help them rebuild after having suffered losses to their 401(k) plans during the financial meltdown of 2008. America’s middle-income families and new millionaires have more in common than might be immediately apparent. Both are turning to well educated and experienced financial professionals to help them hold on to what they have earned through responsible tax planning and savings practices, while also looking to grow assets through wise investment strategies. This is reflected in the 30% growth the U.S. Department of Labor expects to see in the personal financial planning industry during the current decade. America’s Financial planners are licensed registered investment advisers, securities sales reps, life insurance producers, CPAs, as well as other experienced financial professionals who have attained elective professional certification independent of these licenses. The career paths are different, but they all converge on a common professional agenda aimed at helping America’s families and business owners achieve their financial goals. How to Become an Investment AdviserAlthough some 70% of investment advisers work for investment advisory firms, there’s a growing trend that shows more individuals and families turning to independent investment advisers than ever before. A study conducted by the research firm, Cerulli Associates, showed that assets under the management of independent advisers tripled to a total of $1.7 trillion during the ten-year period ending 2010. This is in addition to the $13 trillion currently being managed by salaried employees of major investment firms, as was reported by the Investment Company Institute in 2010.Education Most investment advisers have an extensive education and have earned bachelor’s degrees or graduate degrees. Those who wish to become investment advisers would do well to obtain degrees in one of the following areas:
Examination Experience How to Become a StockbrokerStockbrokers, also known as broker-dealer agents, work for brokerage firms selling securities and other investment products. Some stockbrokers only work with clients with a very high net worth, while others serve clients at various stages of financial growth. Stock transactions place trillions of dollars in the hands of America’s stockbrokers each day, operating from brick-and-mortar firms or online through discount brokerage firms.Along with earning a client’s trust, being a good salesperson is key to success as a stockbroker. Stockbrokers may be employed by internationally recognized brokerage houses, national brokerage firms, or local brokerages. Some of the most recognizable names among brokerages include Scottrade, Merrill Lynch, and Charles Schwab. Education An education in finance will give aspiring registered reps the knowledge of securities markets and investment options they’ll need to pass required exams, and ultimately be successful in their role as securities sales professionals. Additionally, in today’s competitive market place, many brokerage firms will only hire stockbrokers who have a bachelor’s degree at minimum. The following degrees have proven to be beneficial to stockbrokers:
Examination How to Become a Life Insurance and Annuity ProducerLife insurance is a key component to any well-rounded financial plan. Life insurance producers also offer annuity products, which have proven to be some of the most popular and dependable financial products available. Insurance producers who offer financial planning services are well known for going independent and establishing practices of their own. However, many work for major insurance firms including John Hancock, Pacific Life Insurance Company, AXA Equitable Life Insurance Company, and Allstate Financial. Education A degree in accounting or finance would be very beneficial to anybody interested in becoming a life insurance and annuity producer. It would be wise to include courses in personal finance, insurance law, risk management, as well as fixed and variable products. Degrees specific to insurance and risk management are also widely available.
Most states require life insurance and annuity producers to take pre-licensing education courses of varying length prior to passing the state’s Life Insurance Producer examination and registering with the state’s Insurance Division. Prospective life insurance producers are urged to check with their state’s Insurance Division to determine specific pre-licensing requirements. Each insurance department sets its own mandates on required pre-licensing education, including number of credits necessary, approved providers, and length of time given to complete the education prior to taking the state insurance licensing exam. Most states that do require pre-licensing education require that a certain number of credits obtained be specific to ethics courses. How to Become a CPACertified public accountants very often expand the scope of their practices by offering financial planning services, and are uniquely qualified to do so given their existing client base and familiarity with their clients’ personal finances. Many CPAs work for companies that offer a broad spectrum of professional and financial services, including public accountancy and financial planning. A CPA’s value increases with training in finance and by achieving specialized designations such as the Personal Financial Specialist (PFS) offered by the American Institute of Public Accountants (AICPA). Some of the major public accounting firms employing CPAs as financial planners include Deloitte & Touche, Ernst and Young, Grant Thornton and KPMG.Education Aspiring CPAs must fulfill educational requirements determined by their state’s Board of Accountancy, the specifics of which vary from one state to the next. A link to all state boards of accountancy can be found at the AICPA (American Institute of CPAs) website. Although credit distribution among specific courses differ between states, under the Uniform Accountancy Act, all CPA candidates must have a minimum of 150 semester hours of post-secondary education and a bachelor’s degree. Experience In addition to passing the Uniform CPA Exam, all states require that aspiring CPAs complete a minimum of one year of accounting work experience before licensure. Specifics of that experience, such as the type of work setting, amount of experience, and duties that must be fulfilled, differ from state to state. Check each state board of accountancy’s website for further details. Examination The majority of states also require that prospective CPAs fulfill an ethics requirement, which may involve taking a national course in ethics, such as one provided by AICPA, or a state-specific examination pertaining to state ethics and laws in accountancy. All prospective CPAs must pass the Uniform CPA Exam prior to state licensure. This is the fundamental licensing exam required to become a CPA. States administer the Uniform CPA Exam through the National State Boards of Accountancy (NASBA), which processes registration and helps facilitate the licensing process for all states. State Certification and Licensure Certified public accountants must be licensed in each state in which they practice. Filing of an application for certification with the respective State Board of Accountancy is necessary prior to certification/licensure in that state. The information that must be included on this application details education (through college transcripts), experience (signed and verified by an employer), Uniform CPA Exam scores, and scores from an ethics exam, as required. Once the state board of accountancy receives and reviews an application, certification is usually granted within a few weeks. Continuing education Once licensed, CPAs must fulfill continuing education (CE) requirements as determined by their state in order to maintain licensure. Each state board of accountancy sets forth CE requirements, including credits needed, types of courses that must be taken, and authorized providers of CE courses. Some CPAs also opt to pursue further certifications or professional designations in order to broaden their financial planning knowledge and prospects. These may be specific to personal financial planning, retirement planning, estate planning, or working with other types of investment products and clientele. |
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