The truth of the matter is this: financial advisors, also known as financial consultants and occasionally spelled financial adviser, do not perform the functions that their title implies. Basically most people in these positions work to buy and sell securities for clients. Real financial advisors however will sit with their clients and take a look at their complete financial situation. Meaning that you take the time to talk with your client and get a complete assessment of where they are financially, what they need, and where they want to go. Not all clients are interested in becoming millionaires; many just want to put their kids through college or take that much needed vacation with their spouse when they retire.
At this point it is also important to mention that though most of the financial advisors work with individuals, financial advisors can also work with corporations and businesses to make sure they are on track to remain and increase profitability. There are advisors who will work in both aspects -- individuals as well as business. There are firms that state an advisor must decide up front the type of client they will cater to, while others will leave it to the discretion of the advisor.
As with any profession, especially those where money management is involved, education is vital. A financial advisor should have a bachelor’s degree where the specialization or focus is in finance, economics, and accounting. It is equally important that a financial advisor has strong analytically and quantitative skills. Financial advisors that are looking to move up in a firm may want to obtain an MBA as well. In most cases compensation is based on performance and not degree, but taking the next step educationally never hurts.
The degree is not all one needs in order to become a financial advisor. One must also take and pass the Series 7 Exam which is offered by FINRA, as well as meet the mandatory continuing education requirement. More than ever, with major Wall Street companies making huge cuts to save money and remain solvent, they have eliminated the programs they used to offer to groom recent college graduates for a successful financial advising career. Thus, getting started in the industry is very difficult. For the experienced financial advisors, this is a positive note. The lack of experienced FA’s has caused many firms to go in and ''raid'' other firms to try to ''steal'' their financial advisors.
After all the education and effort put in to get ''your foot in the door,'' many wonder what the compensation is. As stated above, in most cases, pay is based on performance; so even if a person has 20 years of experience but isn’t meeting performance expectations, he/she can be at $45,000 per year whereas a ''newbie'' that meets and exceeds expectations in his/her first couple of years can bring home a very nice six-figure income and possibly more.
