Becoming a Financial Planner in California

According to California’s Employment Development Department, the state’s financial planning industry is expected to experience great occupational growth in the current ten-year period ending 2018. In fact, an estimated increase of 21 percent in the number of job opportunities is projected, which translates to an estimated 930 yearly openings. Positions for insurance producers, who may deal in fixed annuities so as to market themselves as financial planners, are expected to increase by 6 percent during this period, seeing an estimated 1,020 new jobs added annually. Securities, commodities and financial service sales agents are expected to see an increase of three percent in the number of jobs available, or some 1,110 new jobs each year through 2018.

In 2010, the University of New Mexico’s Bureau of Business and Economic Research compiled information showing that at $42,578, California’s average annual per capita income ranked 12th in the U.S. California is also home to a number of counties that made Forbes Magazine’s list of richest counties in the United States. Among these is Marin County where the median household income is $81,761. Additionally, 88 of the 400 individuals listed in the most recent Forbes 400 ranking of the richest people in the United Sates live in California. Californians aspiring to become financial planners will find themselves working with higher net worth individuals and families who turn to experts for investment advice and wealth management, as well as to help them establish college and retirement savings plans.

The Public Policy Institute of California projects that during the years between 2005 and 2025 the state’s population will grow from 37 million to somewhere between 44 million and 48 million. The Institute’s report goes on to say that California’s age demographic will shift considerably during this period. It is estimated that by 2030, one in every five Californians will be age 65 or over, nearly twice the number now. These are important considerations for California’s financial planners who often specialize in the prudent and responsible creation and management of retirement savings plans.

The Institute predicts that beginning in 2012, California’s population of school-age children will begin to rise as more women in the state hit childbearing age. By 2020, the Institute estimates that 33 percent of Californians ages 25 to 34 will have a college degree, and 39 percent of all jobs in California will require a college degree. These indicators strongly suggest an increased demand will exist for financial planners dedicated to helping families establish college savings plans.

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How to Obtain an Investment Adviser Representative License in California

The California Department of Corporations (CORP) licenses and registers investment adviser representatives (IARs), also known as registered advisers (RAs). Registration through the Financial Industry Regulatory Authority’s (FINRA’s) IARD (Investment Advisor Registration Depository) system is also required. In order to qualify to become an investment adviser in California, applicants must fulfill one of the following examination scenarios:

  1. Pass the Uniform Investment Adviser Law Examination (Series 65); or
  2. Pass the General Securities Representative Examination (Series 7) and the Uniform Combined State Law Examination (Series 66)

Countless investment adviser (IA) firms with globally recognized names are located across California, as are local and regional IAs. These include Bank of the West in Stockton, Huntington Beach, Santa Monica, Los Angeles, Redondo Beach, and San Marino; Sparrow Capital Management, Inc. in Los Angeles; Edward Jones in Riverside (with offices in 24 other California cities); Goldman Sachs & Co. in San Francisco; Union Bank in Beverly Hills; Mutual of Omaha in San Diego; and Arbor Advisors LLC in Palo Alto.

How to Obtain a Stockbroker License in California

Broker-dealer agents, also called stockbrokers, are licensed through the California Department of Corporations and registered through the FINRA Central Registration Depository (CRD). Examination requirements include passing the Uniform Securities Agent State Law Examination (Series 63) or the Uniform Combined State Law Examination (Series 66), as well as the Series 6 or 7 FINRA-sponsored examinations pertaining to the particular financial products with which they intend to work.

Continuing education (CE) requirements that apply to all registered representatives include completing a computer-based refresher course after two years of registration and every three years thereafter. This element of CE is called the Regulatory Element. Additionally, FINRA requires all firms to provide a Firm Element of CE to its registered representatives. This provides training for representatives, keeping them informed of policy, product, and industry changes and/or developments.

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

Becoming a life insurance producer also allows for the sale of the popular retirement planning products known as fixed annuities. This requires licensure through the California Department of Insurance. For those agents only selling life insurance, a minimum of 20 hours of pre-licensing education is required, along with an additional 12 hours specific to ethics and the California Insurance Code. Examinations are given through PSI testing centers. Continuing education requirements for life-only agents include 24 hours every two years, with four of those hours in ethics training courses.

Life insurance producers who plan to sell annuity products must also complete eight hours of pre-licensing annuity training. Continuing education requirements for life plus annuity agents include the above mentioned 12 hours plus four hours of annuity training every two years.

Life insurance producers who wish to sell variable contracts (life and annuities) must also register with FINRA, taking the Series 6 securities examination. Continuing education requirements of both FINRA and the California Department of Insurance apply to life insurance agents selling variable contracts.