What does a financial advisor do?

Prospective students and working professionals may be intrigued by what a financial advisor does for a living. These industry professionals use their expertise in taxes and investments, real estate, and insurance to recommend financial plans to individuals. 

Financial advisors evaluate a client’s assets, cash flow, and liabilities along with their tax status and insurance coverage to develop financial goals. They also analyze financial data and maintain compliance with laws. 

The US Bureau of Labor Statistics projects a 5% employment growth for financial advisors between 2020 and 2030.

Day-in-the-life of a financial advisor

Financial advisors should have expertise in basic math, personal finance, and research. Advisors may specialize in financial planning, insurance, and retirement along with stocks, real estate, and taxes. 

Industry professionals may work for securities and commodity brokers, insurance companies, and financial institutions. While advising a client, financial advisors may collaborate with attorneys, accountants, and life insurance representatives. 

Financial advisors typically manage the following responsibilities: 

• Providing financial solutions
• Building referral networks
• Offering financial planning services 
• Complying with policies and regulations
• Advising clients of the pros and cons of products
• Reviewing client’s financial information for compliance 
• Applying sales tools to perform analyses and offer products
• Establishing retail, wealth, and business banking partnerships
• Researching current and new investments and insurance solutions

Lifestyle of a financial advisor

Financial advisors review client’s financial goals, relay investment options and risks, and create strategies for enhancing financial performance. 

Industry professionals may work over 40 hours a week and meet with clients on evenings and weekends. With fluctuations in the stock market, financial advisors may experience stress. Industry professionals can work from home or remotely. 

Financial advisors are expected to remain current on legislation and industry changes with continuing education.

Salary expectations as a financial advisor

The median annual wage for financial advisors was over $89,000, as of 2020. Many higher salaried professionals work in credit intermediation, insurance companies, and managing companies and enterprises as well as securities, commodity contracts, and other investment businesses.

What does it take to become a financial advisor?

Financial advisors are generally expected to have a four-year finance degree. A finance master’s degree or a postgraduate license or certification can increase career advancement opportunities. 

While most employers do not require a specific major, economics, math, and business-related degrees are helpful. Newly hired financial advisors typically undergo more than a year of training with a senior advisor. 

While a challenging crossover, individuals who are changing careers can enter the field with a bachelor’s degree. Career changers should consider enrolling in finance, estate planning, and risk management courses to prepare for their new role.

Working professionals may explore paid internship opportunities to gain experience. To become a certified financial planner (CFP), career professionals must complete a CFB Board-registered program and pass an exam. 

Financial advising is a competitive field. Advisors should maintain a growth mindset for retaining current clients and maintaining a competitive advantage. 

What skills do I need as a financial advisor?

Financial advisors need both job-specific and people skills to be successful. This role requires effective communication, negotiation, and decision-making skills as well as accounting, sales, business management, and financial expertise. 

Industry professionals should be skilled in building relationships with clients, completing risk analyses, and researching the marketplace for products and services. Financial advisors maintain an ethical and professional work approach while developing financial strategies.

In conclusion

Financial advising is a remarkable opportunity for educating clients on wealth accumulation and risk management. Advisors assist clients with informed decision-making about the marketplace and investments. 

If you enjoy building relationships, navigating challenges, and striving towards an end goal, then consider a career in financial advising.

This article was reviewed by Lizzette Matos, CPA 

Lizzette Matos is a certified public accountant in New York state. She earned a bachelor of science in finance and accounting from New York University. Matos began her career at Ernst & Young, where she audited a diverse set of companies, primarily in consumer products and media and entertainment. She has worked in the private industry as an accountant for law firms and ITOCHU Corporation, an international conglomerate that manages over 20 subsidiaries and affiliates. Matos stays up to date on changes in the accounting industry through educational courses.

Lizzette Matos is a paid member of the Red Ventures Education freelance review network. 

This page was last reviewed on January 17, 2022.