How to become A Personal Financial Planner

How you live tomorrow depends on how you invest today. Personal Financial Planners conceive a vehicle of a plan which brings the future into the present and helps you get rich by making money while you’re asleep.

• Personal Financial Advisor
• Wealth Manager

What do Personal Financial Planners do?

A Personal Financial Planner would typically need to:

• Provide clients with unbiased and unrestricted information and advice on new and existing financial products and services to help them plan and make decisions on investments based on their personal needs and goals
• Assess the clients’ financial circumstances and evaluate their needs, current provisions, and future aims by conducting in-depth reviews during the meetings set up with them
• Apply knowledge of tax & investment strategies, securities, insurance, pension plans, and real estate to assess viable retail investment products or providers
• Analyze information and help clients prepare financial plans tailored to their risk profile and fulfill their short- and long-term goals
• Recommend to or select for clients, investment options and financial products and services; explain and answer questions about inherent advantages and risks in each one
• Develop business strategies after completing risk analyses; assist clients in making appropriate and informed investment decisions on stocks & bonds, annuities, and insurance
• Negotiate with product suppliers for the best possible rates; liaise with head office; communicate with professionals such as estate agents, solicitors, and valuers
• Invest clients’ money or directly buy and sell financial assets such as stocks and bonds after gaining permission from them
• Monitor clients’ investments and share regular portfolio updates; meet with them at least once a year to update them on potential investments, and adjust the financial plan based on changes in circumstance, needs, or investment options
• Keep up to date with financial products and legislation; inform clients of new investment options and legislative changes that may affect their savings and investments
• Produce financial reports for appraisal by all stakeholders
• Meet the regulatory aspects of the role, e.g., requirements for disclosure, and costs of the services and products provided

Personal Financial Planners carry out most of their work in an office environment, typically seated at a desk for data analysis. Meetings with existing and prospective clients may take place in their office or at the homes of clients.

Since many large firms in the financial services sector have branches across a country, geographic mobility will give them the advantage of working in different environments with various benefits.

Most Personal Financial Planners work full time, and some work more than 40 hours per week. Meetings are commonly held in the evenings and on weekends to meet existing clients or to network with new ones and bring them in.

You may also choose to deliver finance classes as part-time work in the evenings to build up more clientele. Seminars, conferences, or workshops may require travel and time away from home.

Some Personal Financial Planners are self-employed. Others work for financial services firms, investment companies, and insurance companies.

Personal Financial Planners are generally employed by:

• Banks & Building Societies
• Financial Planning Firms
• Independent Financial Advice Companies
• Insurance Companies
• Investment Firms
• Estate Agencies
• Specialist Pension Consultancies
• Law Firms
• Retailers Offering Financial Services

You may find relevant and accredited local organizations that offer credentials in Financial Planning and help further the profession. Some organizations may even offer pro bono Financial Planning advice to victims of disasters. Personal Financial Planners may also benefit from membership in general financial associations, national or international.

• Continuing to address the specific and unique goals and needs of each client while understanding their psychology to manage their expectations, which sometimes may be unrealistic in terms of investment returns and interest rates
• Constructing well-balanced investment portfolios for clients, including income-generating investments and those with the potential for price appreciation, rather than high-yield but high-risk bonds, given the low rates of interest rates in general
• Competition from an increasing number of “Robo-advisors,” or automated programs that operate at higher speed and accuracy and lower cost than people, and are one of the causes of disintermediation as people begin to invest by themselves
• Significant fee compression in the face of rapidly rising research, regulatory and technology costs
• Educating younger generations that there is no shortcut to financial independence

Relevant experience in customer service, sales, or financial services settings gives aspirant Personal Financial Planners an edge in the competitive job market. New entrants often start in a bank and study part-time, learning alongside experienced advisors. It is possible to enter the financial advice sector as a paraplanner, providing research and administrative support to a financial advisor.

Entry without a degree is possible, and employers often regard personal qualities as just as important as academic qualifications.

A bachelor’s degree is typically the essential requirement to take up the career of a Personal Financial Planner. Although a specific course of study is not mandated, employers prefer their Personal Financial Planners to have a degree in finance, economics, accounting, business, mathematics or law. Programs including investments, taxes, estate planning, risk management, and financial planning, add weight to the resume. A pre-entry postgraduate qualification is not needed.

Certifications can enhance a Personal Financial Planner’s reputation and can help bring in new clients. Certification demonstrates competency in a skill or set of skills. It is typically acquired through a bachelor’s degree, three years of relevant work experience, the passage of an examination, and adherence to a code of ethics.

Personal Financial Planners who buy/sell stocks, bonds, or insurance policies, and provide specific investment advice directly, need a combination of licenses that varies with the products they sell. Individual government entities carry out licensing procedures. These typically require passing an examination and fulfilling eligibility requirements, such as a minimum level of education, work experience, training, or the completion of an internship, residency, or apprenticeship.

Personal Financial Planners employed by firms, large or small, may need to be registered with government regulators, at the local or central/federal level.

Since all major certification bodies require a few years of industry experience, most Personal Financial Planners start in junior positions working part- or full-time while completing their studies.

After obtaining certification, a Personal Financial Planner can take on clients without supervision. Career progression depends on performance, experience, and acquisition of professional qualifications. Employees with consistently high levels of performance may be eligible for promotion every two to three years.

Many Personal Financial Planners tend to stay within their roles while moving to higher net worth clients and higher compensation levels. Some prefer to become self-employed after completing their certifications. The key to independence and self-employment is to build a network of contacts and a stable client base.

Personal Financial Advisors who obtain certification and can gain the trust of their clients will likely have the best job prospects.

Once they are hired, Personal Financial Planners often enter an on-the-job training period when they learn how to build a client network and develop investment portfolios from a senior planner. This training usually lasts for more than a year.

Personal Financial Planners are encouraged to study for more advanced or specialized professional qualifications, such as Chartered Financial Planner or Chartered Banker Diplomas, to enhance their career development opportunities. Personal Financial Planners who want to provide advice on mortgages or equity, stocks, shares, or long-term care protection take additional examinations.

It is also useful to study full- or part-time for an MBA. A Master of Business Administration degree (MBA) might help a Personal Financial Planner climb the corporate ladder toward a management position. Occasionally, you might come across doctorate-holders in finance-related fields among managers, but MBAs are more common.

Continuing professional development is the holistic commitment of professionals towards enhancing personal skills and proficiency throughout their active careers through work-based learning, a professional activity, formal education, or self-directed learning. There are a host of CPD courses, seminars, and workshops to help Personal Financial Planners.

Ways In

A bachelor's degree in a finance-related field is a typical starting point, but some firms also hire graduates in the humanities such as psychology majors. Some retail banks offer graduate training schemes, whereas private banks often recruit graduates directly into the business. It is possible to move into financial advice from other areas of the banking and insurance sector.

Who Are Some of Your Likely Clients?

Individuals with substantial earnings often hire Personal Financial Planners for wealth management advice to coordinate their accounts, manage the estate, invest smartly and wisely, and make tax savings. Self-employed individuals, running their small businesses or freelancing, may find it simpler and worth the cost to hand over their budgeting, tax filings, special deductions, and other financial matters to a Personal Financial Planner than do it all themselves.

Individuals who are planning to retire need to learn how to maximize retirement benefits. Those who are younger and want to retire at a certain age with a certain amount of money available to them will need to know what to invest their money in, and how much they will need to put away each month to make that happen.

Specialization

Most Personal Financial Planners offer advice on a varied range of topics, while some choose to specialize in retirement management or risk management. Risk management evaluates how willing an investor is to take chances and tailor their investment portfolio to match their risk profiles.

Independent vs. Restricted Personal Financial Planners

Before they provide advice, Personal Financial Planners are typically required to inform their clients whether they are acting independently or in a restricted capacity. Both charge a flat or an hourly fee from their clients or a proportion of the money invested.

While Independent Financial Planners, whether working for an organization or self-employed, provide advice to their clients on financial products and services across the market, Restricted Financial Planners offer limited advice to the client, focusing on a particular range of products or products from one or a few providers.

Raising Your Emotional Quotient

A good Personal Financial Planner requires the ability to build trust with clients, explain complex financial products in lay terms, and obtain client buy-in for a plan of action. Interpersonal skills are often considered more important than detailed knowledge of mutual funds and trading strategies.

Keeping in Touch

Personal Financial Planners should stay in close and regular touch with their clients, irrespective of market conditions, using various available services including Skype and instant messaging with tech-savvy clients. Open and suitable communication channels work well to build and keep up strong relationships with clients in general.

Managing Information

Smart Financial Planners know how to navigate information overload online and elsewhere, focusing more on their clients’ reactions and attitudes to market developments. They ensure that their clients can access reliable and accurate data sources to avoid misinformation, misunderstanding, and mistakes.

Keeping Clients on Track

Personal Financial Planners encourage client loyalty by maintaining a long-term perspective of their investment portfolio. Planners must ensure that their clients are not thrown off track by market shifts.

Private Bankers or Wealth Managers

They are specialized Personal Financial Planners dealing with wealthy investors, similar to institutional investors (commonly, companies or organizations), who approach investing differently from the general public. Private bankers manage a collection of investments, called a portfolio, for these clients by using the resources of the bank, including teams of financial analysts, accountants, and other professionals.

Robo-Advisors

Modern technology has created automated programs called “Robo-advisors” that collect user information, use advanced algorithms to interpret it and generate investment portfolios that match each client’s specific and unique financial goals in a faster, more accurate, and more economical manner than the human hand.

Even so, the trustworthiness of a Robo-advisor is often questioned. Clients are likely to feel more reassured by a real person managing their investment portfolio, someone they can communicate with. However, in a world ruled by market indices, Robo-advisors are becoming less of a concern.

Though people commonly refer to bills as “paper” money, they aren’t made from paper. Instead, each bill is a combination of 75 percent cotton and 25 percent linen.

If you are passionate about people and their goals, they will choose you over the less passionate competition. Try to be a rainbow in someone’s cloud...to be one who understands and allays their fears...to be the Personal Financial Planner who has earned the trust and respect of their clients

One plan may not fit all! Avoid re-using templates on different clients. Factor into your work the unique aspects of each client’s financial journey, as the real value lies in meaningful, personalized, and sophisticated advice. Counsel the person, not the portfolio.