What Does a Financial Advisor Do? – Southern New Hampshire University

Posted: May 13, 2020 at 5:48 am


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When it comes to planning for a healthy financial future for themselves and their family, many people feel overwhelmed and dont know where to start. Thats why they turn to financial advisors for assistance. With training, education, certification and experience, a financial advisor can help clients develop a plan and the necessary steps to get there, to ensure financial security and peace of mind.

A financial advisor helps clients reach their personal financial goals. This can often entail a lifelong relationship and long-term planning. A financial advisor can explain to their clients strategies around investments and risk management, retirement and estate planning, taxes and insurance, and more and how all these factors affect their clients ability to save and grow their money.

When pursuing your Bachelor of Science in Finance, think about if youre interested in going into a personal financial advisor role in your future career. If so, it is highly advantageous to add a concentration in financial planning to your education.

In addition to learning about investments (using trade-simulation software), securities, insurance, pension plans, real estate and more financial topics, the concentration in Financial Planning component will prepare you to sit for the CFP exam an important and respected industry certification.

Using Case Studies

Youll learn the nuts and bolts of being a financial planner and how to best advise your clients. This knowledge will be solidified via your work with case studies. A finance education will offer a capstone project of a complex case study, where the student will turn it into a financial plan and be able to present it clearly and concisely, said Gary Simmerman, CFP professional and finance adjunct faculty at Southern New Hampshire University (SNHU). You need to not just develop it, but be able to communicate it to laypeople. Sitting for the CFP exam will be contingent on that case study project. Its critically important.

Case studies are where you will hone your communication skills. After creating your comprehensive financial plan, your work on a case study touches on each topic and teaches presentation skills; communication is important, said Craig Allen, CFP professional and finance adjunct faculty at SNHU. Yes, you need to be able to build a portfolio and analyze it. But you also need to know how to condense and present that information, which is an art in itself. So we not only teach analysis, but also how to be able to communicate and heighten client comprehension for making their decisions.

In a program with a concentration in Financial Planning, youll learn investment planning, insurance, retirement and estate planning, and budgeting, said William Alan McKnight, CFP professional and finance adjunct faculty at SNHU. (It) is very project-based, where students work through a particular client profile. They learn not just the fundamentals of how, but also how to have the conversations on the potential problems or issues that a client will face. The (program) gives you an opportunity to practice on client profiles while learning the fundamentals.

Some concentrations in Financial Planning prepare you to sit for the defining industry credential at the CFP, or Certified Financial Planner, exam. Not every job in finance needs or requires it, but for those pursuing a career specifically in personal financial planning, accomplishing the CFP certification will set you apart.

According to the CFP Board website, the CFP certification examination is a key requirement for achieving CFP certification. By passing the exam, you demonstrate that you've attained the knowledge and competency necessary to provide comprehensive personal financial planning advice to your clients.

In order to sit for the CFP exam, you have to take specific coursework to qualify. Those with existing related degrees would need to add this additional education; if you can obtain it while youre getting your degree, you will save time. If you have an accounting degree, for example, before you sit for the CFP test, youd have to go online and take a variety of additional coursework, Allen said. The benefit to taking that concentration at SNHU is youre prepared to sit for the test and youve met the qualifications to sit for it concurrent to obtaining your bachelors degree.

These requirements help to reassure potential clients that the financial planner has the knowledge to help them reach their financial goals and understands how to advise (them) ethically, Regis said.

There are currently only 13 online programs that are recognized by the CFP Board, SNHU being the only one in New Hampshire. Its no small feat to be an accepted university worthy of preparing people for the CFP exam, said Marli Erickson, CFP professional and finance adjunct faculty at SNHU.

Your career as a financial advisor will be jump-started with this added certification as part of your CV.

This honed focus e.g., a finance degree versus a concentration in financial planning its not a common college program, said Brendan Mann, CFP professional and finance adjunct faculty at SNHU. Youll get a leg up on other graduates with this curriculum, and youll be well ahead touting this rare commodity and opportunity to specialize. SNHU is one of the rare universities that offers it online.

If you decide to become a personal financial planner, you can take your career from financial advisor to a more elite level. Being a CFP practitioner will increase your reputation within the industry, and with potential clients. The CFP certification definitely helps you gain knowledge and prestige, which is valuable for financial planners and also CPAs. It's really a great credential, Allen said.

CFP practitioners can be proud to hold out this certification. It shows I have a fiduciary responsibility that supersedes my own (interests and benefit), Erickson said. I want to be seen as the gold standard of financial planning.

The strong code of conduct and standards of practice have a stringent set of rules that do not necessarily bind a financial advisor who is not a CFP practitioner. The CFP code of ethics resonates with the public as a higher quality fiduciary duty, putting the client first, Allen said.

At its core, a career as a personal financial planner hinges significantly on the development and tending of long-term client relationships. Therefore, its important to your success and job satisfaction that you are the type of person who enjoys this level of interpersonal communication.

Three skills that can help you as a financial planner include:

Here's how financial planners can use those skills.

Caring: Each word in personal financial planning is just as important as the other. In contemplating the first, however, you should consider if you would enjoy developing close relationships with clients which may last decades. Financial advisors can almost feel like part of their clients family.

A big part of (this job) is the relationships formed over time with clientele, Allen said. Ive had some clients for more than a decade. Consider all the changes in your own life in the last five, 10 years. If youre working with a client on an ongoing basis, you experience those changes with them. A very real aspect of this business is the personal component. You need to understand their needs and objectives.

A career in personal financial planning is a blend of left and right brain modalities. The technical knowledge and aspects you utilize are tempered with the more creative and emotional facets of the job. You have to have the mind of a capitalist, and the heart of a social worker, Mann said.

Financial changes good and bad, big and small can have a huge emotional impact on your clients. They will need to know you care about them and their future. I would stress the importance of empathy in this career, Simmerman said. You will need to look at a situation and synthesize multiple concepts to create solutions specific to your clients needs. Youll need to be someone who genuinely wants to help people achieve their financial goals.

Listening: A large part of being a financial advisor is knowing when to stop and listen. Each client has their own journey, and building trust with them will come from their belief that you are listening to their goals, their fears, and the evolution of their family.

My passion is listening to people's stories, Erickson said. How did they get to where theyre at, why they sought me out as a CFP practitioner, and (using that to determine) what can I do for them. You have to consider yourself to be a service-minded person.

Communicating: In addition to the various technical and analytical aspects related to education and training for this career, the so-called soft skills are also necessary as a financial planner. The ability to effectively communicate complex concepts to layperson clients, concisely and clearly, are key to success and long-term relationships.

Strong presentation skills are always valuable, but in the world of financial planning, its vital to effectively advising clients in a changing world. With many people depending on the stock market to grow their 401ks, market volatility can trigger some to make rash decisions. Its the job of the financial advisor to warn against making monetary strategy changes based on emotions.

A good advisor is going to empathize with the situation the client is in, and then help them take the emotion out of their decision, Simmerman said. What is their risk tolerance, their financial situation? That has to be part of the assessment when youre making recommendations to clients. Tact and clarity of communication are top tools a good advisor will have at the ready.

The career outlook for financial planning is very good. According to the Bureau of Labor Statistics, employment of personal financial advisors is projected to grow 7 percent by 2028, faster than the average for all occupations. The median annual wage for personal financial advisors was $87,850 in May 2019.

The CFP Board website suggests some positions that would benefit from having the CFP certification:

The most successful advisors in the industry are the people strongest in interpersonal skills, who enjoy teaching, who like fostering the personal long-term relationships, and who have concern for the client, Mann said. You also need to have a certain intellectual level CFP certification is challenging. Youll need aptitude and interest in analysis as well as the ability to interact with families and balance the interpersonal and analytical sides.

If you like the idea of financial planning but are not as interested in the interpersonal component, there are other opportunities that are not client-facing. There are financial planning jobs that would benefit from your CFP education (that are) not necessarily engaging with clients, Simmerman said. There are positions where youre not personally involved with the clients, but are in a support role more behind the scenes, developing investment solutions. Youd benefit with the finance degree and CFP certification, he said.

You could work for a firm that builds model portfolios that they offer to clients. Roles that arent personal financial planners could include duties of examining various types of clients (risk tolerance, goals, etc.), and creating sample portfolios based on those personas; or creating personalized options specific to one particular client, that a personal financial planner would then present.

Support roles could include:

In those types of supporting and related positions, that experience can also count toward your hours requirements for getting to use that CFP mark, Simmerman said.

Baby boomers are driving the need for more personal financial planners in two ways. First, theyre hitting retirement age right now, and are paying rapt attention to their financial needs and upcoming transition. Also, many CFP certificants are themselves boomers. The CFP certification began in 1972, when I graduated high school, Erickson said, so those people are also aging out of their financial planning jobs.

BLS corroborates this: As the population ages and life expectancies rise, demand for financial planning services should increase.

Times have changed from when our parents finances took up only a folder or a drawer. Financial planning has evolved so much that the business of being a family requires its own (office in the home), Erickson said.

With that new expanded consideration, personal financial planners are now needed more than ever, to help navigate the way. Its OK for people not to fully understand everything they need; its too vast, Erickson said. You need a financial planner who knows the complexities of your needs and investments and retirements. Its too much for a layperson to know it all.

Employers and clients alike will respect the level of hard work and dedication to your craft that is demonstrated by obtaining your CFP certification. I dont know a person with a CFP certification who doesnt love it, who isnt passionate in what they do, Erickson said. Its quite an emotional commitment. (Were) experts. We have on-the-job experience and education. We want to share our knowledge to help people achieve financial success.

Kathleen Palmer is an award-winning journalist and writer.

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What Does a Financial Advisor Do? - Southern New Hampshire University

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May 13th, 2020 at 5:48 am