Personal Financial Advisors : Occupational Outlook Handbook : U.S. Bureau of Labor Statistics

Summary

Personal financial advisors assess the financial needs of individuals and assist them with investments.

Quick Facts: Personal Financial Advisors
2010 Median Pay	$64,750 per year $31.13 per hour
Entry-Level Education	Bachelor’s degree
Work Experience in a Related Occupation	None
On-the-job Training	None
Number of Jobs, 2010	206,800
Job Outlook, 2010-20	32% (Much faster than average)
Employment Change, 2010-20	66,400

What Personal Financial Advisors Do

Personal financial advisors give financial advice to people. They help with investments, taxes, and insurance decisions.

Work Environment

Most personal financial advisors work in the finance and insurance industry or are self-employed. They typically work full time and may meet with clients in the evenings or on weekends.

How to Become a Personal Financial Advisor

Personal financial advisors typically need a bachelor's degree. A master’s degree and certification can improve chances for advancement in the occupation.

Pay

The median annual wage of personal financial advisors was $64,750 in May 2010.

Employment of personal financial advisors is projected to grow 32 percent from 2010 to 2020, much faster than the average for all occupations. As large numbers of baby boomers approach retirement age, they will seek planning advice from personal financial advisors.

Similar Occupations

Compare the job duties, education, job growth, and pay of personal financial advisors with similar occupations.

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What Personal Financial Advisors Do About this section

Personal financial advisors meet with clients to discuss their financial goals.

Personal financial advisors give financial advice to people. They help with investments, taxes, and insurance decisions.

Duties

Personal financial advisors typically do the following:

Meet with clients in person to discuss their financial goals
Explain the types of financial services they provide
Educate clients and answer questions about investment options and potential risks
Recommend investments to clients or select investments on their behalf
Help clients plan for specific circumstances, such as education expenses or retirement
Monitor clients' accounts and determine if changes are needed to improve account performance or accommodate life changes, such as getting married or having children
Research investment opportunities

Personal financial advisors assess the financial needs of individuals and help them with investments (such as stocks and bonds), tax laws, and insurance decisions. Advisors help clients plan for short-term and long-term goals, such as education expenses and retirement. They recommend investments to match the clients' goals. They invest clients' money based on the clients' decisions.

Many also provide tax advice or sell insurance.

Although most planners offer advice on a wide range of topics, some specialize in areas such as retirement or risk management (evaluating how willing the investor is to take chances, and adjusting investments accordingly).

Many personal financial advisors spend a lot of time marketing their services, and they meet potential clients by giving seminars or through business and social networking. Networking is the process of meeting and exchanging information with people, or groups of people, who have similar interests.

After they have invested funds for a client, they, as well as the client, get regular reports of the investments. They monitor the client's investments and usually meet with each client at least once a year to update the client on potential investments and to adjust the financial plan because of the client's changed circumstances or because investment options have changed.

Many personal financial advisors are licensed to directly buy and sell financial products, such as stocks, bonds, annuities, and insurance. Depending on the agreement they have with their clients, personal financial advisors may have the clients' permission to make decisions about buying and selling stocks and bonds.

Private bankers or wealth managers are personal financial advisors who work for people who have a lot of money to invest. These clients are similar to institutional investors (commonly companies or organizations), and they 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. For more information on the duties of these other financial workers, see the profiles on financial analysts and accountants and auditors.

Work Environment About this section

Many personal financial advisors travel to attend conferences or teach finance classes in the evening to bring in more clients.

Personal financial advisors held about 206,800 jobs in 2010.

The following industries employed the most personal financial advisors in 2010:

Other financial investment activities	26%
Monetary authorities, credit intermediation, and related activities	19
Securities and commodity contracts intermediation and brokerage	19
Insurance carriers and related activities	3
Professional, scientific, and technical services	3

Personal financial advisors typically work in offices. Almost one-fourth of personal financial advisors were self-employed in 2010. Many also travel to attend conferences or teach finance classes in the evening to bring in more clients.

Work Schedules

Most personal financial advisors work full time, and 24 percent work more than 50 hours per week. They often go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.

How to Become a Personal Financial Advisor About this section

Personal financial advisors must establish trust with clients and respond to their questions and concerns.

Personal financial advisors typically need a bachelor's degree. A master’s degree and certification can improve chances for advancement in the occupation.

Education

Personal financial advisors typically need a bachelor's degree. Although employers usually do not require a specific field of study for personal financial advisors, a degree in finance, economics, accounting, business, mathematics, or law is good preparation for this occupation. Courses in investments, taxes, estate planning, and risk management are also helpful. Programs in financial planning are becoming more available in colleges and universities.

Licenses

Personal financial advisors who directly buy or sell stocks, bonds, insurance policies, or specific investment advice need a combination of licenses that varies based upon the products they sell. In addition to those licenses, smaller firms that manage clients’ investments must be registered with state regulators, and larger firms must be registered with the Securities and Exchange Commission. Personal financial advisors who choose to sell insurance need licenses issued by state boards. State licensing board information and requirements for registered investment advisors are available from the North American Securities Administrators Association.

Certification

Certifications can enhance a personal financial advisor’s reputation and can help bring in new clients. The Certified Financial Planner Board of Standards offers the Certified Financial Planner (CFP). For this certification, advisors must have a bachelor's degree, at least 3 years of relevant work experience, pass an exam, and agree to adhere to a code of ethics. The exam covers the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, investment and real estate planning, debt management, planning liability, emergency fund reserves, and statistical modeling.

Advancement

A master’s degree in an area such as finance or business administration can improve a personal financial advisor’s chances of moving into a management position and attracting new clients.

Important Qualities

Analytical skills. In determining an investment portfolio for a client, personal financial advisors must be able to take into account a range of information, including economic trends, regulatory changes, and the client’s comfort with risky decisions.

Interpersonal skills. A major part of a personal financial advisor’s job is making clients feel comfortable. They must establish trust with clients and respond well to their questions and concerns.

Math skills. Personal financial advisors should be good at mathematics because they constantly work with numbers. They determine the amount invested, how that amount has grown or shrunk over time, and how a portfolio is distributed among different investments.

Selling skills. To expand their base of clients, personal financial advisors must be convincing and persistent in selling their services.

Speaking skills. Personal financial advisors interact with clients every day. They must explain complex financial concepts in understandable language.

Pay About this section

Personal Financial Advisors

Median annual wages, May 2010

Personal Financial Advisors: $64,750
Business and Financial Operations Occupations: $60,670
Total, All Occupations: $33,840

The median annual wage of personal financial advisors was $64,750 in May 2010. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $32,660, and the top 10 percent earned more than $166,400.

Wages of self-employed advisors are not included in the earnings reported here.

Personal financial advisors who work for financial services firms are often paid a salary plus bonuses. Bonuses are not included in the wage data here.

Advisors who work for financial investment firms or planning firms or who are self-employed typically earn their money by charging a percentage of the clients' assets that they manage. They may also earn money by charging an hourly fee or by getting fees on stock and insurance purchases. In addition to their fees, advisors generally get commissions for financial products that they sell.

Job Outlook About this section

Personal Financial Advisors

Percent change in employment, projected 2010-20

Personal Financial Advisors: 32%
Business and Financial Operations Occupations: 17%
Total, All Occupations: 14%

Employment of personal financial advisors is projected to grow 32 percent from 2010 to 2020, much faster than the average for all occupations.

The primary driver of growth will be the aging population. As large numbers of baby boomers approach retirement, they will seek planning advice from personal financial advisors.

Decreased funds for corporate and state pensions also are expected to contribute to the trend of hiring personal financial advisors. Private corporations and state and local governments are facing shortfalls in their pension funds, which may lead to benefit reductions. This will require more financial planning from individuals and increase the demand for personal financial advisors.

Job Prospects

Personal financial advisors are expected to face competition as the combination of relatively high wages and few formal educational requirements attracts many applicants for each opening.

Employment projections data for personal financial advisors, 2010-20
Occupational Title	SOC Code	Employment, 2010	Projected Employment, 2020	Change, 2010-20		Employment by Industry
Occupational Title	SOC Code	Employment, 2010	Projected Employment, 2020	Percent	Numeric	Employment by Industry
SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program
Personal Financial Advisors	13-2052	206,800	273,200	32	66,400	[XLS]

Similar Occupations About this section

This table shows a list of occupations with job duties that are similar to those of personal financial advisors.

Occupation	Job Duties	ENTRY-LEVEL EDUCATION	2010 MEDIAN PAY
Budget Analysts	Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.	Bachelor’s degree	$68,200
Financial Analysts	Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.	Bachelor’s degree	$74,350
Financial Managers	Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.	Bachelor’s degree	$103,910
Insurance Sales Agents	Insurance sales agents help insurance companies generate new business by contacting potential customers and selling one or more types of insurance. An agent explains various insurance policies and helps clients choose plans that suit them.	High school diploma or equivalent	$46,770
Insurance Underwriters	Insurance underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.	Bachelor’s degree	$59,290
Real Estate Brokers and Sales Agents	Real estate brokers and sales agents help clients buy, sell, and rent properties. Brokers and agents do the same type of work, but brokers are licensed to manage their own real estate businesses. Sales agents must work with a broker.	High school diploma or equivalent	$42,680
Securities, Commodities, and Financial Services Sales Agents	Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets. They sell securities to individuals, advise companies in search of investors, and conduct trades.	Bachelor’s degree	$70,190