Pros and Cons of an Investment Advisor Career
Investment advisors provide individuals with advice concerning their financial goals. Find out the pros and cons of becoming an investment advisor to determine if it is the best choice for you.
|Pros of an Investment Advisor Career|
|High growth field (27% growth from 2012-2022)*|
|Median salary of $81,060*|
|No specific course of study required for entry into the field*|
|Potential for bonuses*|
|Job satisfaction helping clients meet financial goals*|
|Cons of an Investment Advisor Career|
|Competitive job market*|
|Requires marketing oneself to bring in new clients*|
|Evening and weekend hours may be required*|
|High pressure to perform*|
Source: *U.S. Bureau of Labor Statistics (BLS).
Job Description and Duties
As an investment advisor, or personal financial advisor, as the position is referred to by the BLS, you would meet with clients to assess their finances, determine their short and long-term financial goals and create an investment strategy. You might help people plan their retirement, start a college fund for their children or save money to purchase a home. You might research investment opportunities for your clients and then invest their money and monitor their investments for them. You would also educate your clients on the potential risks and benefits of various investment strategies and advise them on other financial matters, such as insurance and taxes. With the proper licensing, you may also sell insurance and other financial products to your clients.
Another part of the job involves marketing your services in order to bring in new clients, which is often an ongoing activity. You might do this by conducting seminars and lectures to attract new clients or through social and business networking.
Job Growth and Salary
According to the BLS, the field of investment advising is expected to experience a 27% growth in employment between 2012 and 2022. However, the job market will still be competitive due to the few educational requirements and relatively high salary. In 2014, the annual median income for a personal financial advisor was approximately $81,000, according to the BLS.
What Are the Requirements?
Most employers prefer candidates with a minimum of a bachelor's degree education. While no specific degree program is required, some employers state a preference for business, economics, accounting or finance majors. The BLS adds that a degree in math or financial planning can also be helpful.
In order to provide certain kinds of investment advice or to sell stocks or bonds, you will need a specific license, depending upon the products you sell or the advice you give. Licenses are issued through the Financial Industry Regulatory Authority (FINRA). Investment advisors who sell insurance must also complete state licensing requirements.
Some of the skills and qualifications mentioned by the BLS and/or job listings include:
- Sales experience
- Excellent verbal and written communication skills
- Analytical and math skills
- MS Office skills
- Knowledge of investment, finance and insurance concepts
Job Postings from Real Employers
Employers seeking investment advisors prefer candidates with experience in financial and retirement planning and sales. Job postings may also specify the professional licenses the employer requires for the position. Below are some examples of investment advisor job postings that were found in March 2012:
- A Pennsylvania wealth management firm is seeking a financial advisor to manage the firm's client accounts and to analyze and develop financial plans. The employer prefers applicants with a bachelor's or master's degree in finance, accounting or business, along with three to five years experience in financial planning.
- An Arizona employer in the banking and financial services industry is seeking financial advisor trainees to participate in its Practice Management Development training program. Trainees receive a base salary while going through the program and will receive a position with the firm after completion. A minimum of a bachelor's degree and three years experience in sales is required. Applicant must possess FINRA Series 7, 66 and insurance licenses or become licensed soon after employment.
- A Virginia employer in the energy and utilities industry is seeking an investment advisor to provide investment advice for its consumer-owned electric cooperative members. The advisor will develop retirement plans, conduct seminars and provide guidance for members of the cooperatives. The employer requires an undergraduate degree and six to eight years experience in financial services.
How to Stand Out in the Field
The BLS states that many employers prefer applicants with degrees in business, accounting, finance or economics. This is apparent from job listings as well; for this reason, obtaining a degree in one of these areas could be to your advantage. The BLS also recommends courses in investing, taxes and estate planning. The BLS points out that those who are certified and have master's degrees under their belts may stand out amongst the competition.
Employers may not require certification to qualify for a position, but according to the BLS, it may offer you an edge in a competitive job market. The Certified Financial Planner Board of Standards offers the Certified Financial Planner certification for candidates with a bachelor's degree and experience in the field. The credential is evidence of the financial planner's knowledge and experience in investments and financial planning.
Other Careers to Consider
If you're interested in a career in finance, but would like more of your job to include researching and analyzing investments and financial information, a position as a financial analyst may be a better fit for you. Financial analysts study stock offerings for businesses and individuals, prepare financial reports, arrange mergers and evaluate the financial standing of a business. Some specialize in various areas, such as business evaluation or mergers and acquisitions. The BLS expected this field to grow by 23% during the 2010-2020 decade. Competition for jobs will still be keen, however, due to the high salary. You'll need a minimum of a bachelor's degree; a master's degree will get you into more advanced positions. The 2011 median salary was around $76,000.
If keeping account books and computing tax returns is more up your alley, consider becoming an accountant. Accountants maintain and organize financial records, provide tax advice and assess the overall financial situation of a company or individual. You'll need a bachelor's degree in accounting or a related area, though some companies prefer people with a master's degree in accounting or an MBA with a concentration in accounting. Certification is necessary as well if you want to become a Certified Public Accountant (CPA); other types of accountancy also have their certification requirements. Accountants and auditors made a median salary of around $63,000 in 2011, according to the BLS.