You may have heard about a financial planner before and wondered what exactly it is that they do. This post is written to answer that question. A financial planner is also referred to as a personal financial advisor and what financial planners do is to advise their clients on what they need to do to reach their financial goals. Financial planners get to work directly with businesses and clients, guiding them on how to navigate the foundational principles of personal finance.
Some financial planner jobs include providing transactional and planning services while some financial planners offer just comprehensive planning services without offering transactional services.
It is not unusual to find that financial planners sometimes work independently, even though there are those that work in larger insurance or investment firms. Irrespective of the environments that they work in, financial planner jobs are usually the same. This means that financial planner jobs are not done in isolation but can be offered in conjunction with other services that an investment firm or an insurance firm may offer.
Financial Planner Jobs
Part of the job of a financial planner is to help their clients (businesses, individuals or families) understand the circumstances of their finances and strategize how to reach their long-term and short-term financial goals.
For this to happen, financial planners need information such as monthly expenses, total annual income, debt obligations, monthly expenses that are not debt related, savings account balances, current investment holdings, insurance plans, and tax liabilities. This information is usually provided by the client during the first meeting to provide the financial planner with a foundational knowledge of their finances.
This information is then analyzed and presented in a way that meaningful deductions can be made. After this is done, recommendations can be made based on the client’s financial objectives. Other topics of importance that financial planners may need to talk about with their clients are family and personal budgeting, saving strategies and objectives, retirement accumulation, protection planning (insurance), estate planning, and debt management. Although it is not usual, a financial planner could also provide information about tax efficiency for his clients.
When rendering services for a business, financial planners typically help with issues that are important to a business’s financial health, like employee benefits, projected revenue, cash flow, and debt management. This makes financial planners an asset to the financial future of their client’s business.
Not everyone knows why they need financial planners, so financial planners take it up as part of their job to go through the process of finding new clients. To do so, they make connections with other professionals like estate planning attorneys and certified public accountants by going for charitable and social events. Doing this helps them to create better relationships and ensure higher client retention.
What does it take to be a financial planner?
Education: To become a successful financial planner, an advanced degree is not a requirement, however, a bachelor’s degree is recommended. For those interested in establishing a financial planning firm, it would be valuable to have a degree like a master’s of business administration (MBA) in addition to a bachelor’s degree.
Licenses: In order to be allowed to provide financial advice and carry out transactions that are related to insurance and securities, financial planners must obtain licenses.
Licenses that a financial planner would need to implement securities transactions include the following Financial Industry Regulatory Authority (FINRA) licenses.
- FINRA Series 7 license: This tests the knowledge and understanding that one has of the securities industry and specific investment transactions which include sales of variable annuities, government securities, corporate securities, options, and municipal bonds.
- FINRA Series 66 license: This is the North American Securities Administrators Association (NASAA) exam.
Other certifications could be helpful if one seeks to progress in a financial planning career. The Certified Financial Planner (CFP) designation is a highly regarded license in the financial industry and one that clients would value. To get this CFP designation, what is required is a bachelor’s degree, an exam, and continuing education. Knowing what a financial planner does gives you an understanding of their benefits to you and how they can help you with your business. Also, now that you know what it takes to be a financial planner, you can take an informed decision to transition
