Becoming a Financial Planner in Maryland

According to the Maryland Department of Labor, Licensing and Regulation, in 2008 there were 4,565 personal financial advisors providing personal financial planning services in the state. Based on occupational projections it is estimated that by 2018 there will be 5,935 such financial professionals working in Maryland. This is an increase of some 1,370 jobs. It is worth noting that these estimates don’t include the many financial advisors in Maryland that establish their own independent firms. The United States Bureau of Labor Statistics (BLS) predicts job growth for personal financial advisors to be around 30 percent, much faster than the average for all occupations. The demand for personal financial planning services is largely attributed to the fact that the millions of Americans who are looking at retirement over the next decade are seeking expert advice in how to best manage their financial assets.

The median household income in Maryland in 2009 was $69,193, a figure about $19,000 higher than the median household income across the U.S. Approximately 18 percent of Marylanders earn $100,000 or more annually, and it is very often these higher net worth individuals that look to experts for help with college tuition planning, retirement and estate planning, as well as investment advice from state licensed investment advisors. The U.S. Bureau of Economic Analysis notes that Maryland was one of only a few states with personal income growth in 2009, as personal income in the state grew by 0.3 percent. Over the next decade, the number of Maryland residents over age 65 will increase by 34 percent, which will contribute to the increased demand for retirement planning services. Demand for financial planning services can be expected to be highest in be the Baltimore-Towson area and the Hagerstown area as the FDIC has named these areas as the largest deposit markets in the state.

Maryland is a state where financial planners who specialize in college savings plans can expect to do very well. The College Board reports that as of 2010, 44.6 percent of Maryland’s population had earned an associate’s degree or higher. This number is well above the national average of 41.6 percent. In 2010, the Maryland Higher Education Commission reported that 78 percent of Maryland high school graduates enrolled in Maryland colleges and universities. The number of Marylanders saving for college increased as well, as Maryland’s College Investment Plan grew to a new high of $2 billion in assets in 2010. Enrollment in Maryland’s Prepaid College Trust also grew considerably last year showing a net increase of 36 percent.

How to Obtain an Investment Adviser Representative License in Maryland

The Maryland Attorney General’s Securities Division licenses candidates interested in becoming financial planners who offer specific investment advice to Maryland residents as investment adviser representatives (IARs) under the auspices of large national investment advisory (IA) firms, as well as IARs who establish independent IA firms of their own within the state. To be licensed as an investment advisor representative in Maryland, candidates must pass the North American Securities Administrators Association’s (NASAA’s) Series 65 Uniform Investment Adviser Law Examination and register with the Financial Industry Regulatory Authority (FINRA). Would-be IARs schedule these exams through Maryland’s Pearson or Prometric Testing Centers, located in Baltimore, Bethesda, and Columbia.

Investment advisor representatives are found in the many well-known national, and global investment advisory firms located across Maryland. Major global investment firms with offices in Maryland include Charles Schwab in Annapolis, Columbia, Bethesda, Towson, and Gaithersburg; Morgan Stanley Smith Barney in Frederick, Annapolis, Waldorf, Chestertown, and Easton; and Fidelity in Towson, Annapolis, and Bethesda.

Regional investment advisor firms in Maryland include Parrish & Company in Chevy Chase, Chesapeake Financial Advisors in Towson, Main Street Advisors in Westminster, The Family Firm, Inc. in Bethesda, Broinco & Broinco LLP in Abingdon, Chapin Davis Investments in Baltimore, and Financial Network Investment Corporation in Owings Mills.

IARs also have the ability to license independent IA firms of their own through the Maryland Securities Division.

How to Obtain a Stockbroker License in Maryland

The Securities Division also licenses all broker-dealer firms operating within Maryland, as well as the stockbrokers who sell investment products as registered representatives of these firms. Depending on the specific investment products they are selling, registered representatives are required to take either the Financial Industry Regulatory Authority’s (FINRA’s) Series 6 Investment Company Products/Variable Contracts Limited Representative Exam, or the series 7 General Securities Representative exam, which allows them to offer a more comprehensive suite of products that includes stocks. Stockbrokers in Maryland are exempt from NASAA’s Series 63 Uniform Securities Agent State Law Examination if they only work with residents of Maryland. All stockbrokers also become registered in FINRA’s CRD national database after passing the required exams and being approved for licensure.

Registered representatives must fulfill some continuing education requirements in order to maintain their license. The regulatory element consists of a computer-based training program completed within 120 days of the registered rep’s second license renewal, and then every three years after that, as these training modules are updated to reflect regulatory changes and shifts in market trends. In addition to the required regulatory training, registered representatives engage in annual continuing education to sharpen sales skills and product knowledge in specific areas as determined by the brokerage firms that employ them.

How to Obtain a License to Sell Life Insurance and Fixed Annuities in Maryland

The Maryland Insurance Administration distributes life insurance producer licenses, which include the ability to sell fixed annuities to state residents. This license requires that applicants take a 60 hour pre-licensing course specific to life insurance and annuities through a Maryland-approved provider, and then pass the MD General Life Insurance Producer exam administered by PSI Exams Online.

Completing 24 hours of approved continuing education courses every two years satisfies the license renewal requirements maintained by the Maryland Insurance Administration.

Insurance producers often work as independent contractors for the major insurance providers and opt to expand their offerings to include variable annuities and other investment products so as to be able to provide more comprehensive financial planning services. This requires them to take either the Series 6 Investment Company Products/Variable Contracts Limited Representative Exam or the Series 7 General Securities Representative Exam, resulting in additional licensure through Maryland’s Securities Division.