Many people use financial advisors both personally and professionally to help manage their capital. Working as a financial advisor can be a lucrative and fulfilling job, and these professionals can go on to pursue many different career paths in the finance industry. Knowing what your options are as a financial advisor can help you make informed long-term career decisions.
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In this article, we explain what a financial advisor is, describe the benefits and disadvantages of working as a financial advisor and provide a list of similar careers for financial advisors to pursue.
Key takeaways:
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Financial advisors are experts who help clients develop and implement strategies to better their financial well-being.
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Working as a financial advisor has downsides like stress and strict regulations, but it also has plenty of benefits like high earning potential and the opportunity to help people.
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Financial advisors could find work in a variety of relevant careers across the finance industry.
What is a financial advisor?
A financial advisor is an accounting professional who helps people or businesses manage their money. Financial advisors perform a number of job duties in the course of their work, depending on the specifics of their position and the needs of their clients. Common financial advisor responsibilities include:
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Advising clients: One of the primary duties of a financial advisor is to provide financial advice to clients on savings and investment strategies.
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Managing investments: Many financial advisors help their clients invest their money in a range of diverse options, including stocks and funds.
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Structuring plans: Financial advisors help their clients create short- and long-term financial strategies to help pay off debt and save money.
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Monitoring money: Once the financial advisor has established a plan with their client, the advisor will monitor the strategy to ensure it’s working effectively.
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Changing financial strategies: If needed, financial advisors will adjust their client’s financial strategies or elements of the financial strategies to maximize savings and returns.
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Establishing financial goals: Many financial advisors help their clients set financial goals for their future to help formulate effective investing and saving strategies.
Advantages of working as a financial advisor
The field of financial advising offers a number of benefits to the accounting professionals who choose to enter it, including:
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Compensation: Becoming a financial advisor takes a substantial amount of education, training and time. Because of their expertise and specialization, financial advisors are typically very well compensated for their work.
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Meaning: Financial advisors provide a meaningful service to their clients by helping them gain financial security and prepare for important life events, which is often rewarding for those that work in the field.
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Flexibility: After establishing a client base, financial advisors often have a relatively flexible work schedule, allowing for a healthy work-life balance.
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Career options: Financial advising is a broad field, with a number of specialties financial advisors can work in and clients they can serve, giving financial advisors freedom in how they structure their practice.
Disadvantages of working as a financial advisor
While there are a substantial number of advantages to becoming a financial advisor, there are a few disadvantages to consider before making career decisions:
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Stress: Financial advising can be a high-stress career for some since it involves helping people manage their life savings. Setting boundaries to ensure you get ample time away from work might help you manage your stress and stay motivated.
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Client-building: Most financial advisors devote a substantial amount of time to finding clients, building relationships and maintaining a solid client list to keep their business running in addition to performing their other financial advisory duties. Continually expanding your client base could help you increase your income and improve your credibility, though, so many people enjoy this aspect of the career.
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Regulations: The financial industry is a highly regulated sector, so it can take a good deal of time and energy for financial advisors to stay updated on these rules and ensure they’re meeting them. Understanding these regulations and helping your clients stay compliant with them can be fulfilling, though.
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Licensing requirements: Financial advisors typically need to be licensed to practice in their state and sell certain securities and insurance policies. These licenses each require a passing grade on an exam, and preparing for it could help you refine your understanding of the field.
7 careers for financial advisors
Financial advisors can specialize in a few different fields and serve a variety of clientele. Consider a few of the most common financial advisor jobs to see which aligns best with your interests and skill set. For the most up-to-date salary information from Indeed, please click on the links below.
1. Financial coach
National average salary: $59,018 per year
Primary duties: Financial coaches help clients understand basic finance and how to build wealth. They typically work with low-net-worth individuals to help them become more financially secure and equip them with tools to improve their financial standing. They usually provide education on topics like interest rates, savings strategies, investments and credit ratings.
2. Financial planner
National average salary: $72,046 per year
Primary duties: Financial planners are certified accounting professionals who help their clients plan for their financial future. They typically help individuals or families meet financial goals like reducing debt, planning for a large purchase or saving for retirement. They may also develop tax strategies to help their clients maximize their capital and remain compliant and create estate plans for their clients to manage their wealth after death.
3. Investment advisor
National average salary: $74,738 per year
Primary duties: An investment advisor helps their clients make informed financial decisions, usually about investments. Investment advisors determine the level of risk their clients are willing to take on and find investments that meet those parameters. They may monitor the market, explain different securities and analyze investment opportunities.
4. Broker
National average salary: $77,842 per year
Primary duties: A broker buys and sells securities on the stock market directly for their clients. They track and analyze their clients’ portfolios to ensure their investments are profitable. Brokers typically also review financial news to learn which securities are valuable and when market prices may change.
5. Certified public accountant
National average salary: $79,954 per year
Primary duties: A certified public accountant is a credentialed finance professional who helps businesses and individuals stay compliant with financial regulations, meet their tax obligations and keep their finances organized. Their responsibilities can include preparing tax documents, developing detailed financial reports, tracking expenses and payments and auditing internal documents to ensure all obligations are met. These professionals may also provide general financial advice to help their clients meet their goals.
6. Portfolio manager
National average salary: $81,110 per year
Primary duties: A portfolio manager helps clients manage their investment portfolios. Common job duties for asset managers include monitoring the stock market to inform investment decisions, performing risk analyses on securities and updating clients about their portfolios. These professionals also prepare reports with financial forecasts and potential investment opportunities.
7. Wealth manager
National average salary: $86,456 per year
Primary duties: Wealth managers typically help clients with substantial capital manage their wealth in the short- and long-term. Their duties include meeting regularly with their clients to assess strategies and goals and support the unique financial situations of high-net-worth individuals like legal issues, estate planning and philanthropy. Wealth advisors help their clients prepare taxes and plan for retirement.
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