what is a financial planner?

As a financial planner, you help individuals and businesses chart a course for their financial goals. Your job is to assist clients in defining their financial goals and creating a road map for achieving them. A financial planner helps with budgeting and finding creative ways to save money. You also explore ways to minimize tax burdens and improve returns on investments.

Financial planning goals include investing for retirement, buying a new home, and determining the best insurance products. As a financial planner, you use your expertise to analyze clients' financial needs and develop a plan. This involves helping them optimize their budgets and expenses and providing strategies for paying off debt. A financial planner also advises on the financial products or investments that help clients accomplish their dreams.

Unlike financial advisors who offer general information on managing investments and arranging insurance coverage, financial planners provide a specialized service. A financial planner ensures the client is satisfied with the financial plan. In contrast, a financial advisor is focused on the investments and often acts as a stockbroker.

Would working as a financial planner suit your analytical and problem-solving skills? Then, read on to find out what competencies and qualifications you need to thrive in a financial planning role.

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average financial planner salary

According to PayScale, the average salary of a financial planner is about $67,467 in 2023, excluding bonuses, commission, and profit sharing. An entry-level financial planner with a year of experience or less earns about $52,046, with all the tips, bonuses, and overtime pay included. Someone with one to four years of experience (early career) earns an average total compensation of $61,900.

If you have five to nine years of experience (mid-career financial planner), it is possible to earn a total compensation above $75,300, but if you have experience of 10-20 years, an average total compensation of $88,712 is feasible. If you have more than 20 years of experience, you can earn $99,671 or more.

factors affecting a financial planner salary

First, your qualifications impact your salary prospects as a financial planner. For instance, certified financial planners command higher salaries than those without certifications.

Secondly, the size of the organization you work for affects your salary, too. If you work for a small investment or insurance company or startup, most don't have the resources to pay high salaries. However, established financial service companies with more funds may be able to pay higher wages.

Thirdly, the geographical location of a financial planner's job also affects salary. Financial planners in metropolitan areas and coastal cities tend to make more money than those located in rural or suburban areas.

Finally, the type of clients you work with also influences your salary as a financial planner. Financial planners who advise high-net-worth individuals are likely to earn more than those serving general clients.

Wondering what you can earn as a financial planner? Find out immediately with the Randstad salary checker! You can quickly and easily see what the average salary of a financial planner is.

 

Smiling male sitting down and looking away.
Smiling male sitting down and looking away.
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types of financial planners

Some types of financial planners include:

  • certified financial planner: As a certified financial planner, you provide financial advice to individuals or businesses. You act in the client's best interests, following the stipulated code of ethics. Unlike other financial planners, you receive remuneration on a fee-only basis. You don't advertise a company's financial products to clients to earn a commission.
  • investment advisor: As an investment advisor, you provide advice on buying or selling securities. Sometimes, you buy or sell securities on behalf of your client through a brokerage service. Since you adhere to fiduciary standards, your advice should be in the client's best interests.
  • wealth manager: As a wealth manager, you deal with clients who have a high net worth. That means you specialize in financial planning aspects for the wealthy, like risk management to preserve assets, estate planning, and legal planning.
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working as a financial planner

Financial planners are investment professionals with expertise in planning and forecasting market trends to assist in investment choices. If this is your career, read on for insights into financial planners' daily tasks and work environments.

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financial planner skills and education

To embark on a career as a financial planner, a bachelor's degree in finance, economics, business, or a related field is necessary. Such programs offer foundational knowledge in areas like investment principles, tax laws, and financial analysis. Further, an understanding of business law, estate planning, and risk management is advantageous.

Post-graduate degrees, like a Master's in Business Administration (MBA) or a Master's in Finance, can provide a competitive edge. These programs deepen your knowledge, bolstering your ability to provide comprehensive financial advice.

Licensing is vital for financial planners who sell investment products or insurance. Licenses like Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) are highly regarded in the industry. These require passing rigorous exams and adhering to ethical standards.

Continuous learning is a key aspect of this field. Regular updates on financial laws, market trends, and investment products are necessary to maintain an edge. Many financial planners also opt for additional certifications to advance their careers, such as the Retirement Income Certified Professional (RICP) or the Certified Investment Management Analyst (CIMA) designation.

skills and competencies

Some of the qualities of financial planners include:

  • customer-first mentality: A good financial planner should prioritize clients' needs. While you market and sell financial and investment products to clients, your priority is to ensure their best interests come first.
  • financial aptitude: Financial acumen is vital in selling financial or investment products. Understanding the financial markets and the impact of market changes helps you provide the best advice.
  • presentation skills: As a financial planner, presentation skills are essential since you spend most of your career presenting plans to clients or selling financial products. Good communication skills also help you share information in simple terms that clients understand.
man looking outside in the office
man looking outside in the office
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FAQs about working as a financial planner

Here you will find answers to the most frequently asked questions about financial planners.

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