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Ultimate Guide for Financial Advisors

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Those researching a financial advisor’s profession can expect various potential workplace environments with attractive income potential. As for this profession’s downsides, one might expect to deal with stress and some instability. A career as a financial advisor will be gratifying, but it also has its challenges like any career choice. Let’s discuss the history, preparation, and future trends of this exciting field in this Guide for Financial Advisors.

What is the History of Financial Advising?

The College of Financial Planning’s first graduating class was in 1973. This inaugural year was relatively placid for the U.S. financial markets compared to the chaotic years that would follow.

Economic & Political Beginnings


Economic and political pressures converged in the early 1970s, which profoundly affected the markets. The 1970s opened in recession, and the problematic bear market continued its 15-year grind, which started in 1967 and continued through to 1982. OPEC’s formation led to oil price nightmares starting in 1973, which then turned into double-digit inflation in 1974, followed by another recession in 1973-1975. The start to the Watergate hearings, a price and wage freeze, the bombastic resignations of President Richard Nixon and Vice President Spiro Agnew, and the Vietnam War’s conclusion did not help the nation’s economic realities. 

By the time the Employee Retirement Income Security Act (ERISA) became a law, the country added the term “stagflation” as a new word to its vocabulary. Stagflation defined the time of stagnant wages and ongoing inflation that greatly affected buying power. By 1980, in the market and economic terms, United States investors were reeling from the unbearable bear market, an inflation rate that had risen to 13.5%, and interest rates that sat at their highest levels ever. The country suffered through a double-dip recession that lasted until 1982. This was the tumultuous financial environment into which the very first group of Certified Financial Planners was introduced into the economy.

The Brand

Many leading securities brokerage firms launched what today we call a rebranding of the financial advisor’s position by the 1980s. The firms sought to upgrade the career’s image, and the “financial consultant” title was a popular choice at many firms.

The goal of rebranding was to replace the irrelevant image of the transaction-driven and aggressive salesperson with a new one that reflected the positive characteristics of a highly-trained professional committed to giving sound financial investment counsel and advice to clients.

The term “financial advisor” started gaining popularity in the early 1990s as yet another rebranding attempt. Finance organizations believed that this title best conveyed the positive image needed to solidify even more so than the “financial consultant” title. It was an obvious transition given that the famous advisory role was a vital aspect of the “consultant” image.

The Implications

Merrill Lynch

Merrill Lynch, the retail securities financial brokerage industry leader, was the last significant finance organization to make this adjustment. Its compliance department was known for being slow to move, very cautious, yet very powerful at the time.

The finance giant feared that accepting the title “financial advisor” could result in substantial regulatory and legal ramifications by implying that the title holders would be susceptible to more stringent fiduciary policies and standards. The more flexible suitability standard would traditionally guide brokers, registered representatives, and account executives.

Various financial and business publications such as Forbes, The Wall Street Journal, and Barron’s constantly editorialized that the financial advisor’s title carried this implication. This resulted in the media calling for a fiduciary standard to be set upon its holders.

History would show that Merrill Lynch’s apprehensions would turn out to be for naught, and it eventually rebranded its financial consultants as financial advisors. The Chartered Financial Consultant designation currently stands as a credential for financial planners.


Few would forecast that in 1969 when Loren Dunton created the Society for Financial Counselling Ethics, that it would grow into the financial planning career field we know today. The Bureau of Labor Statistics reports that there are just over 260,000 financial advisors in the United States, and the projected average growth rate for financial advisors in the United States through 2024 is much higher than the average job’s projected growth rate. So, while the numbers of professionals in the field are increasing, increasing the competitiveness in the field, so it seems is the demand.

According to the Certified Financial Planner Board of Standards, there are over 94,000 CFP certificate holders worldwide. This number includes over 48,000 in the United States. Dutton’s veritable revolution began with a meeting of 13 finance professionals at Chicago’s O’Hare Airport in 1969, gained incredible momentum and today still serves more investors needing complex advice than ever before.

Today, there is a strong interest in the various means and disciplines of financial planning. Many organizations have been developed to support these interests, including the National Association of Personal Financial Advisors (NAPFA) that features 1,300 members, the Financial Planning Association (FPA) that has 29,000 members, and the Personal Financial Planning segment of the American Institute of Certified Public Accountants that features 7,400 members.

What are the Benefits and Challenges to being a Financial Advisor?

A financial advisor’s role offers a range of attractive opportunities not typically found in many other career fields. Besides providing valuable guidance to clients, the world’s most successful financial advisors possess control over their practice, virtually unlimited earning potential, and a flexible work schedule.

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While the chance to offer meaningful advice may not often be why financial advisors pursue a career in this industry, it is typical for this job component to be the most rewarding. Consumers are often confused and overwhelmed regarding which insurance and investment vehicles are best suited for their needs. The most significant function a financial advisor will perform is providing education and guidance to clients to make appropriate financial decisions. A client’s successful financial life will often be directly related to the client’s financial advisor’s success.

Financial Advisors Enjoy an Unlimited Earning Potential

Many financial advisors have the chance to enjoy unlimited earning potential. Financial advisors can be either commission-based, fee-based, or charge with a combination of the two. This means their income is based on the amount of new business they produce or what they have as recurring revenue created each year. While pay structures will often vary, financial advisors can earn as much or as little money as they are able.

Financial Advisors Work Schedule Offers Incredible Flexibility

Finding a healthy balance between one’s personal and professional life can be a challenge when beginning a new career. A career as a financial advisor is no different. However, once an advisor establishes a client base, the job lends itself to flexibility in work hours. Seasoned financial advisors will many times schedule client meetings around their schedules and, through the years, can plan to work less than full 40-hour weeks.

Financial Advisors Practice Creativity in Forming Their Work Structure

Financial advisors have the unique chance to be creative in building a client base. While some will emphasize offering services for the Baby Boomer generation, others will cater exclusively to guiding Millennials. Gen X is another generation to serve. Financial advisors can also specialize in clients of a particular occupation, like entrepreneurs, doctors, lawyers, or executives. 

Advisors can also provide a wide range of services and products to clients, including financial planning, retirement plans, disability insurance, investment management, or life insurance. Access to these different types of benefits only gives financial advisors more control over their practices.

Challenges of Financial Advisors


While the list of advantages related to working as a financial advisor is substantial, as laid out throughout this Guide for Financial Advisors, we would be remiss if we didn’t discuss a few potential challenges to consider while contemplating becoming one. These challenges must be weighed alongside the opportunities, understood amidst each company’s support systems, and met honestly among each financial advisor’s priorities. They range in duration and severity. Among the most prominent are the industry’s high-stress environments, the time it takes to build a sturdy client base, and the ongoing need to understand and comply with regulatory requirements.

Many financial advisors experience a significant amount of stress when beginning their careers. You must understand that the financial services industry is cyclical, seasonal, and directly related to domestic and international markets’ performances. When economies perform less than optimally, clients will reach out to their financial advisors first. Financial advisors will be constantly aware of their clients’ emotions affected by downturns in the market. This connection can result in a high level of stress over time.

Beginning a career as a financial advisor is not an easy venture. Many financial services organizations have sales quotas that must be met each month. A quota works as a time clock and means that financial advisors are frequently searching for new prospects until a healthy client base is established. Many advisors who move on from the financial services industry are aware of the high level of stress caused by the amount of time and resources spent designing and maintaining profitable prospecting strategies. New advisors with small personal networks find that building a business catalog is the most challenging career component.

Financial advisors are licensed to provide advice and sell products to clients. The process of obtaining these licenses is lengthy. Additionally, financial advisors must complete a certain number of continuing education classes each year to keep their licenses current and in good standing. Advisors are required to carry errors and omissions insurance throughout their careers. Keeping up to date on these regulatory requirements will help protect clients from malpractice but are also costly and time-consuming.

How do Students Prepare to Become a Financial Advisor?

In many ways, becoming a financial advisor is a lot like becoming a therapist or counselor: They share in their clients’ most significant life events like starting a family, handling inheritance, and preparing for retirement. Advisors are also tasked with helping clients address their fears like recessions, running out of money, or losing jobs.

Best Job

U.S. News & World Report recently ranked the financial advising career as the sixth-best job.

Certified financial planner Rianka R. Dorsainvil says, “Advising clients is a privilege.” She is the president and founder of the organization, Your Greatest Contribution. “They’re trusting you with the intimate details of their finances. Earning that trust requires passing rigorous exams and holding yourself to the highest standards of professionalism and integrity.”

the job

Financial advisors are there to help their clients make informed financial decisions. Those decisions can include everything from how to get into investing in retirement or future estate planning. Advisors will often work in various settings; they will most often work in large financial institutions like brokerage firms or banks. Working in smaller firms or independent, self-employed advisors is becoming increasingly popular within the financial advising realm.

Advisors will often specialize in specific areas like retirement planning and investment management. Some prefer to direct their efforts towards particular clients like those within a given age bracket or net worth. Still, others prefer specific account types like workplace plans.

Future Financial Advisors First Earn an Undergraduate Degree

It would help if you had an undergraduate degree to begin your journey of becoming a financial advisor, but it won’t need to be within a specific major. You don’t need to get a degree in finance, but having one will likely help with the tests. Taking courses in topics like estate planning, finance, investments, and risk management will help you familiarize yourself with many of the terms and subjects found in finance.

Students choosing to become certified financial planners (CFP), however, will need to complete the CFP Board of Standards-approved, college-level content in personal financial planning or the equivalent. Many colleges and universities, including online programs, now offer programs designed for students heading this direction. Researching students can find a list of programs on the CFP Board website.

Future Financial Advisors Need to Consider an Internship

job interview

Landing your first position as a financial advisor can be challenging, especially if you don’t have any prior experience or coursework. Many firms will struggle to offer positions, or even interviews, to applicants lacking the proper education or experience. Potential financial advisors should seriously consider procuring an internship before seeking a full-time job in the field.

The Job

The financial advisor career path is a focused one as no one graduates college ready to give clients financial advice. Advisors will often begin performing back-end office work and supporting other advisors until they pass the necessary tests needed to get certified.

Once certified or licensed, advisors can progress in creating and managing their book of business. And as their expertise grows, so can the size of their books and net worth of their clients.

Financial Advisors Need to Acquire the Proper Licenses and Certifications

Generally speaking, there are three distinct channels professionals can function in the financial services industry. Financial advisors can work for broker-dealers like Fidelity or Morgan Stanley, a bank with a financial advisor department, or a small independent firm. Financial advisors will need to prepare for and take the exams that make it possible to work in different financial environments.

What Are the Future Trends in Financial Advising?

Be Aware of the Fiduciary Trend

The Department of Labor’s fiduciary rule mandated that all advisors involved in retirement planning, financial advice, and product must maintain a fiduciary status. This policy was quashed in 2018 by a federal court, but a legacy remains.

Today, many financial services firms alter business practices that lessen conflicts of interest. The Securities and Exchange Commission has also worked on a set of regulations that require brokers to put customers’ financial interests before their own. Futurists in the industry see more transparent disclosure and pricing policies ahead, along with a financial adviser’s compensation model based on a regular periodic retainer rather than commissions and fees.


There is a Generation Gap

Financial advisors who are currently ignoring potential Millennial and Generation X clients are doing so at the detriment of their earning potential. Trillions of dollars will transfer from the Baby Boomer generation to their children in the next few years. Planners need to know their older clients’ children to retain them after the parents are gone. This means a shift from risk and growth to conservation, stability, and producing retirement income from assets.

Globalization Will Continue

The ever-increasing globalization of the economies around the globe will lead to enormous new marketing opportunities for financial advisors who can reach previously out of reach clients. The number of people with cellular phones will rise to five billion within the next few years, doubling today’s number. The percentage of private wealth in the world will also increase to $400 trillion in a year, with $73 trillion in North America alone. Women will also soon control approximately 60% of the United States liquid investable assets. 

Education Debt Will Continue to Rise

As evident in this Guide for Financial Advisors, many professionals in business undertake multiple avenues of education. Paying off student loans is an enormous burden for many graduates and parents of undergraduate and graduate students. There is more educational loan debt than credit card debt in the nation. More clients are going to be looking for financial advice on how to deal with this reality. The legislative intervention will likely be needed to deal with the issue on a national scale.

Retirement Planning is Essential


If retirement planning seems like a complicated issue now, it will only get more difficult for many young workers projected to outlive their parents. Today’s medical advances in cancer research areas are increasing average projected lifespans into the 90s and beyond the century mark in the future. The demand for advanced products, such as longevity annuities, will mushroom in the next few years.

Other conduits will become available in the insurance marketplace that will help disciplined savers to preserve their incomes for the duration of their lives. Accelerated benefit riders that permit life insurance policyholders to access a percentage of death benefits for long-term health care expenses will also become integral parts of every permanent and term insurance policy.

Besides these upcoming advances in financial advising, the financial industry is in the midst of a marketplace and digital revolution that will result in low-cost financial planning for the masses becoming more readily available. Cloud-based technology will also enable 24/7 mobility for traders and more tech-savvy clients raised in the internet era. Transparent pricing and automated services are on the horizon, along with strict rules and regulations for advisors who service retirement accounts and plans.

Next Steps

The best thing one can do who is interested in pursuing a career as a financial advisor is to earn the correct degrees for the job. An undergraduate degree is required for a financial advisor career. Majors in statistics, finance, business, economics, or similar fields are useful. Financial advisors may be generalists or specialize in one of several areas, including risk management, retirement, estate planning, taxes, or insurance.

Many firms or high-end clients will require their financial advisors to develop their education at the graduate level further. Some financial advisors will pursue an MBA program after working in the field for several years and working full-time.

Successful business professionals understand that there is always more to learn. The fast-paced world of finance is no exception. Finance strategies and laws are continually evolving, and financial advisors must keep up with the trends. Many financial advising certifications require continuing education. Senior positions often require an advanced degree like an MBA. A master’s degree in finance, typically labeled as a master’s in finance or an MBA with a finance specialization, will provide graduate students with a competitive edge.

A master’s degree in finance like an online MBA is ideal for graduate students wanting to pursue a leadership role in a business environment. At this high level, graduate students develop advanced knowledge and skills in managing risk and learn strategies on how to evaluate information using financial models and methodologies critically. 

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