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What does a financial advisor聽do?

Michael Feder

Written by Michael Feder

Kathryn Uhles

Reviewed by聽Kathryn Uhles, MIS, MSP,聽Dean, College of Business and IT

Illustration showing an umbrella over dollar signs to signify a financial advisor and what they do

A financial advisor uses knowledge of investments, risk management and financial markets to help clients make short- and long-term wealth management decisions. They can work with individuals or businesses. In addition to helping develop a financial plan and providing financial advice, some financial advisors help manage a client鈥檚 investment portfolio.

This career can be rewarding for those interested in finance who want to work directly with people to set financial goals and see the impact of their financial decisions firsthand. That said, there are several important considerations to address before you embark on this career path. Let鈥檚 take a look at everything you need to know about becoming a financial advisor.听

What does a financial advisor do?聽聽聽

Financial advisors provide personalized services based on their clients鈥 needs. Their duties vary day to day depending on their current customers鈥 financial situation and goals. Here are the services advisors usually provide.听

  • Investment advice: Advisors offer advice and manage portfolios based on clients鈥 financial goals, risk tolerance and interests. Though advisors offer advice, purchasing and selling decisions usually lie with the clients unless they specifically request management services.听
  • Tax planning: Advisors help minimize tax liabilities and optimize returns based on current assets and income.听
  • Estate planning: Inheritance planning helps clients pass wealth on to beneficiaries through a will, trusts and other investments.听
  • Retirement planning: They offer guidance to help clients develop a financial plan to save for retirement.听
  • Risk management: Advisors help clients manage investment risks, diversify portfolios and navigate complex challenges, like bear markets and inflation.听

Though these professionals focus on the needs of their clients, some of their daily tasks are the same regardless of the nuances of their job.听

  • Advisors consult with clients to understand their financial goals, histories and obstacles. They use this information to create customized plans.听
  • Advisors need to stay on top of financial markets. They conduct financial analysis and track market trends with a focus on how the economic climate will affect their clients鈥 holdings.听
  • Advisors have to continue learning about new regulations, tax laws and changes in major industries. All these factors directly affect their clients.听
  • Advisors need to communicate with clients and provide education on financial matters. This aspect of the job is challenging because it often requires making complex concepts simple for non-experts.听
  • Client relationships are essential to this field
  • Communicating with clients and building trust are essential for success in this field.听

These duties require a diverse range of technical and soft skills that advisors develop through education and experience.听

What type of education do financial advisors need?聽聽

According to U.S. Bureau of Labor Statistics (BLS) information on how to become a financial advisor,聽. The agency also states that a master鈥檚 degree and professional certification could increase chances of advancement.听

Advisors often start with an undergraduate degree in business or finance. A mathematics or accounting degree can also provide a knowledge base for those interested in finance careers.听

In addition to providing the knowledge base necessary for a financial advisor career, a bachelor鈥檚 is necessary for some credentials, such as Certified Financial Planner (CFP) certification.听

What skills do financial advisors need?聽聽

Financial advisors need聽. These requirements necessitate a diverse skill set. Here are some key traits of this profession:

  • Analytical skills: Advisors must examine market trends, investment performance and risk profiles to create strategies to present to clients.
  • Problem-solving: The financial world is unpredictable. On top of that, advisors often need to work with clients in challenging financial situations. They need to find ways to fix issues and put their clients on the correct track.听
  • Communication: The ability to explain concepts and financial plans is essential because it builds client trust and helps them understand financial decisions.听
  • Time management: Most advisors handle multiple clients, and they have to examine financial data and stay current on market movements while providing responsive service to customers. The job often involves prioritizing and multitasking.听
  • Ethics: These professionals need to work in the best interest of their clients and should always be transparent about decisions and advice.
  • Empathy: Understanding clients鈥 emotions is crucial for this job. Advisors need to understand clients鈥 situations and offer support in difficult financial situations.听

Some of these skills come directly from work experience. In fact, some industry certifications place as much importance on experience as academic credentials.听

What level of experience do financial advisors need?聽

In the resource about becoming a financial advisor cited above, BLS notes that most professionals in the field gain experience by taking an entry-level position in a firm. In this job, they work alongside a seasoned advisor. They may learn the ropes and then deal with clients directly with oversight from the senior advisor.听

CFP certification, one of the most common credentials, requires聽聽(or 6,000 hours) of professional experience before sitting for the exam.听爱污传媒 does not educationally prepare for this certification exam.

Some financial advisory firms offer apprenticeships that typically last for two years or 4,000 hours. These jobs qualify employees for CFP certification if they also pass the exam.听

What certifications do financial advisors need?聽

BLS says CFP certification enhances reputation and could bring new clients. However, financial advisors are not required to earn this certification. BLS says this position requires a license if advisors sell certain products directly to clients.

Students in finance or accounting programs can earn financial advisor certificates from their school to start getting specialized knowledge during their studies. Some programs combine business degrees with financial planning certificates.听

Some specialized certifications advisors might obtain are:聽聽

  • Financial Risk Manager (FRM)
  • Chartered Investment Counselor (CIC)
  • Certified Estate Planner (CEP)

These certifications are for advisors who want to specialize or highlight skills in a specific area.听

How much do financial advisors make?聽聽

As of May 2023, it was reported that personal advisors聽, with a median wage of $99,580, according to BLS.听Pay depends on experience, academic credentials, certification and skills. Geographic location also played a part in salary expectations.听

Financial advisors get paid in two ways. They earn a salary, and some get a commission if they sell investment products to clients. Commission-earning sales require registration with the Securities and Exchange Commission. Advisors selling insurance products may need to register with their state.听

Salary ranges are not specific to students or graduates of 爱污传媒. Actual outcomes vary based on multiple factors, including prior work experience, geographic location and other factors specific to the individual. 爱污传媒 does not guarantee employment, salary level or career advancement. BLS data is geographically based. Information for a specific state/city can be researched on the BLS website.

What is the career outlook for financial advisors?聽

BLS projects聽聽from 2022 to 2032, much faster than the average for all occupations. This statistic highlights the聽growth potential of the finance sector.听

The growth potential, unique skills, entry-level salary and other factors make financial advisor careers attractive to those with an interest in finance. Though this career requires academic qualifications and extensive on-the-job experience, it is potentially rewarding, with advisors having a direct impact on the finances of their clients.

BLS Occupational Employment Projections, 2022-2032 is published by the U.S. Bureau of Labor Statistics. This data reflects BLS鈥 projections of national (not local) conditions. These data points are not specific to 爱污传媒 students or graduates.

Education programs in finance at 爱污传媒

础听Bachelor of Science in Finance and Technology聽at 爱污传媒 can help you learn how to analyze financial data used in financial accounting, planning, management, and decision making. However, if you鈥檙e interested in one of the different types of financial managers, such as being a treasurer or cash manager, you will have to look up the specific education and requirements for those roles as the necessary focus areas may not be taught in the UOPX degree program.

In the business and technology program, you鈥檒l learn top skills such as聽assessing financial strategies and practices used to manage financial instruments, portfolios, and capital flows;聽evaluating aspects of financial planning used to grow, manage, and protect wealth; and聽appraising the use of financial tools and technology used to deliver financial services, analyze data, promote competitive advantage, and improve performance.

Perhaps you鈥檇 prefer to pursue a career in accounting. If so, you may want to consider the University鈥檚 Bachelor of Science in Accounting. In this program, you鈥檒l learn to develop specialized skills in managerial accounting, estate taxation, advanced topics in accounting research and more. If you鈥檙e interested in business in general, or other sector of business, explore more about the聽business degrees聽offered at 爱污传媒!

Headshot of Michael Feder

ABOUT THE AUTHOR

A graduate of Johns Hopkins University and its Writing Seminars program and winner of the Stephen A. Dixon Literary Prize, Michael Feder brings an eye for detail and a passion for research to every article he writes. His academic and professional background includes experience in marketing, content development, script writing and SEO. Today, he works as a multimedia specialist at 爱污传媒 where he covers a variety of topics ranging from healthcare to IT.

Headshot of Kathryn Uhles

ABOUT THE REVIEWER

Currently Dean of the College of Business and Information Technology,聽Kathryn Uhles has served 爱污传媒 in a variety of roles since 2006. Prior to joining 爱污传媒, Kathryn taught fifth grade to underprivileged youth in 爱污传媒.

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