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Personal Financial Advisor

Job Outlook: 7% (Faster than average)

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What Personal Financial Advisors Do About this section

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

Personal financial advisors provide advice on investments, insurance, mortgages, estate planning, taxes, and retirement to help individuals manage their finances.

Duties

Personal financial advisors typically do the following:

  • Meet with clients to discuss their financial goals
  • Explain to potential clients 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 or retirement
  • Monitor clients’ accounts and determine if changes are needed to improve financial performance or to 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 decisions on investments (such as stocks and bonds), tax laws, and insurance. Advisors help clients plan for short- and long-term goals, such as budgeting for education expenses and saving for retirement through investments. They invest clients’ money based on the clients’ decisions. Many advisors 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 the investor's willingness 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 participating in business and social networking.

After financial advisors have invested funds for a client, they and the client receive regular investment reports. Advisors 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 based on the client’s circumstances or because investment options may 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 client’s permission to make decisions about buying and selling stocks and bonds.

Work Environment About this section

Personal financial advisors
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 330,300 jobs in 2021. The largest employers of personal financial advisors were as follows:

Securities, commodity contracts, and other financial investments and related activities 59%
Self-employed workers 19
Credit intermediation and related activities 15
Insurance carriers and related activities 3
Management of companies and enterprises 1

Personal financial advisors typically work in offices. Some also travel to attend conferences, teach finance seminars in the evening, and attend networking events to bring in more clients.

Work Schedules

Most personal financial advisors work full time and some work more than 40 hours per week. They also may go to meetings on evenings and weekends to meet with prospective or existing clients.

How to Become a Personal Financial Advisor About this section

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

Personal financial advisors typically need a bachelor’s degree to enter the occupation. A master’s degree and certification may improve chances for advancement.

Education

Personal financial advisors typically need a bachelor’s degree, although employers usually do not require a specific course of study. However, common fields of degree include business, social science, or mathematics. Courses in investments, taxes, estate planning, and risk management may be helpful.

Training

After they are hired, personal financial advisors typically need on-the-job training to attain competency. During this time, new advisors work under the supervision of senior advisors and learn how to build a client network, develop investment portfolios, and perform other duties. This training usually lasts for more than a year.

Licenses, Certifications, and Registrations

Personal financial advisors who directly buy or sell stocks, bonds, or insurance policies, or who provide specific investment advice, may need a combination of licenses that varies with the products they sell. In addition to being required to have those licenses, advisors in small firms that manage clients’ investments must be registered with state regulators, and those in large firms must be registered with the U.S. Securities and Exchange Commission (SEC). Personal financial advisors who choose to sell insurance need licenses issued by state boards. Information on state licensing board requirements for registered investment advisors is available from the North American Securities Administrators Association (NASAA).

Certifications may enhance a personal financial advisor’s reputation and help bring in new clients. The Certified Financial Planner Board of Standards offers the Certified Financial Planner (CFP) designation. For this certification, advisors must have a bachelor’s degree, complete coursework on financial planning through a CFP Board Registered Program, have relevant work experience, pass an exam, and agree to adhere to a code of ethics.

Advancement

A master’s degree in a field such as finance or business administration may improve a personal financial advisor’s chances of becoming a financial manager and of attracting new clients.

Important Qualities

Analytical skills. In determining an investment portfolio for a client, personal financial advisors must be able to assess 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. Advisors must establish trust with clients and respond well to their questions and concerns.

Math skills. Personal financial advisors must be adept at working with numbers to determine the amount invested, how that amount has grown or decreased over time, and how a portfolio is distributed among different investments.

Sales 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 a way that clients understand.

Pay About this section

Personal Financial Advisors

Median annual wages, May 2021

Personal financial advisors

$94,170

Financial specialists

$77,300

Total, all occupations

$45,760

 

The median annual wage for personal financial advisors was $94,170 in May 2021. 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 $47,570, and the highest 10 percent earned more than $208,000.

In May 2021, the median annual wages for personal financial advisors in the top industries in which they worked were as follows:

Securities, commodity contracts, and other financial investments and related activities $99,970
Management of companies and enterprises 79,780
Credit intermediation and related activities 76,620
Insurance carriers and related activities 69,410

Personal financial advisors who work for financial services firms are often paid a salary plus bonuses. Commissions, incentive pay, and production bonuses are included in the wage data here; nonproduction bonuses are not included.

Advisors who work for financial investment firms or financial planning firms or who are self-employed earn money for their services in one of two ways. They either charge a flat fee or earn commissions for the financial products that they sell.

Most personal financial advisors work full time, and some work more than 40 hours per week. They also may go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.

Job Outlook About this section

Personal Financial Advisors

Percent change in employment, projected 2021-31

Personal financial advisors

15%

Financial specialists

6%

Total, all occupations

5%

 

Employment of personal financial advisors is projected to grow 15 percent from 2021 to 2031, much faster than the average for all occupations.

About 30,500 openings for personal financial advisors are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

Employment

The primary driver of employment growth will be the aging population. As large numbers of baby boomers continue to retire, they are likely to seek planning advice from personal financial advisors. Also, longer lifespans will lead to longer retirement periods, further increasing demand for financial planning services.

In addition, the replacement of traditional pension plans with individual retirement accounts is expected to continue. Many people used to receive defined pension payments in retirement, but most companies no longer offer these plans. Therefore, individuals must save and invest for their own retirement, increasing the demand for personal financial advisors.

The availability of “robo-advisors,” computer programs that provide automated investment advice based on user inputs, may partially temper demand for personal financial advisors. However, the impact of this technology should be limited as consumers continue turning to human advisors for more complex and specialized investment advice over the projections decade.

Employment projections data for personal financial advisors, 2021-31
Occupational Title SOC Code Employment, 2021 Projected Employment, 2031 Change, 2021-31 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Personal financial advisors

13-2052 330,300 381,200 15 50,900 Get data

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