Financial consultant qualifications every consultant needs

Financial advisors are professionals who work independently or are employed by financial companies to provide clients with guidance on investment and money decisions. Advisors make money by charging clients transaction commissions or consulting fees for account management. In the past few years, the financial advisory industry has transformed from a typical “stockbroker” role to a more comprehensive approach to financial planning.

Not everyone in the financial consulting field has the same knowledge, background or skills. Here, we describe some of the key factors you should pay attention to to help ensure that your financial professionals are qualified for a good job.

Key points

  • A good financial advisor should have the appropriate qualifications to manage your investment and provide you with reasonable advice on your financial issues.
  • Having academic and professional training and education is a good indicator that your consultant has integrated into the financial and economic world and understands many of the complexities.
  • Other certificates, such as the CFP or CFA designation, can give you further confidence that your consultant has received a rigorous professional education and passed their knowledge qualification exam.

Educational requirements

The brokerage company requires all new financial advisor applicants to have at least a bachelor’s degree from a recognized educational institution. Majors may vary, but most of them are finance, marketing or business. A Master of Business Administration (MBA) is not required, but it will definitely increase the resume of a financial advisor.

Professional license

Financial advisers must pass and have a general securities representative license, also known as Series 7. The test covers all the basic investment knowledge and regulations that financial advisors must know. Financial advisors also have a Series 63 license, which is a state license for unified securities agency. This allows consultants to conduct business across multiple states. Consultants who wish to charge consulting fees must also take the Series 65 exam or the Uniform Investment Advisor Law exam. These three licenses are held by most financial advisors in the industry.

Financial advisors can obtain many other licenses that allow them to sell other products. Many consultants have obtained life, health, and variable insurance licenses in their state. This allows consultants to sell life insurance, health insurance, long-term care, and variable annuities. There are other investments that require a license to sell, such as 31 series of managed futures, or series 3 commodities.

Certification and title

Financial advisors can further build their credibility by obtaining certification. Certification is not required, but the brokerage company encourages it. The most popular certification is CERTIFIED FINANCIAL PLANNER™ (CFP). The exam is issued by the Certified Financial Planner Board of Standards Inc. and tests the ability and qualifications of consultants to adopt a comprehensive and holistic approach to financial planning. The CFP committee has also established strict ethics and professional responsibility standards to let customers know that anyone holding the CFP mark is highly honest.

There are many other names available to financial advisors. The Chartered Financial Consultant (ChFC) is launched by the American Academy and offers courses similar to CFP. There are many different names and certifications available, some of which are more difficult to obtain than others.

Background and skills

Financial advisors also need to have real-world experience, preferably in a commercial or sales environment. Consultants need interpersonal sales skills because the goal is to attract new customers. If it is difficult for a new financial advisor to communicate and sell with potential customers, there is no chance of success.

New financial consultants are also rarely hired directly after graduating from university because they need experience. Most consultants tend to have a previous career in another industry. Branch managers who are often responsible for recruiting are more willing to hire experienced middle-aged candidates than new-faced young people.

Consultants should also have entrepreneurial qualities, similar to business owners. Once a consultant has built a business book, this entrepreneurial spirit is what distinguishes the successful from the mediocre. The practice of maintaining customers and financial consulting is similar to running a business. Successful consultants adopt a systematic approach to customer service, marketing, and investment. These consultants are proactive to clients, not passive. Practice is like a well-functioning machine, ready to grow.

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