Whether you are new to the field of finance or an experienced professional, there are some things that you should know about the different types of financial planning advisors. These advisors offer advice on investments, insurance, tax and retirement planning, among other things.
Investopedia’s “10 Best Tools for Financial Advisors”
Investopedia recently weighed in with their list of the 10 best tools and technologies for financial advisors. The company’s list consists of a variety of software and technology solutions that will help you run your firm more efficiently. While the list is a little on the short side, it’s still a pretty good smattering of the aforementioned notables.
While it’s not the first name on the list, eMoney is a worthy contender. They’ve got a well rounded product line that includes an integrated client billing system and a robust business intelligence solution. They also boast a few standalone solutions, including a new product line that focuses on foundational planning.
The best part is that the company is still in business. The company’s flagship product, the Black Diamond Wealth Platform, is a comprehensive cloud-based portfolio management solution that can be easily customized for your firm’s specific needs. Their proprietary dashboard is intuitive, allowing you to present complex scenarios to your clients in a matter of seconds.
Compensation of a financial planning advisor
Considering the high demand for financial planning experts, it is no surprise that compensation for the profession is on the rise. Typically, a financial planning advisor earns a salary of at least 80% to 90% of his/her net income. This figure includes the base salary, bonuses, incentives, and MGS. This may also include compensation for managing a client’s assets.
The amount of money an advisor can earn is dependent on his/her firm’s financial model and services offered. For example, a certified financial planner may charge a flat fee for developing a financial plan or for making investment recommendations. Regardless of the type of compensation received, a financial planner’s income will likely rise as his/her skill set improves.
A financial planning advisor may also receive a commission for implementing a financial strategy. The best way to know how an advisor makes money is to inquire about their compensation model. This will allow you to get a better sense of the advisor’s advice style.
Qualifications for a financial planner in the U.S.
Getting into a career as a financial planner requires a lot of education. Depending on where you’re going to work, you might need to pursue a bachelor’s degree, a master’s degree or even licensure.
Financial advisors provide advice on retirement plans, investments and estate planning. They analyze data to develop written recommendations for their clients. They must be familiar with a wide variety of people and understand how to effectively communicate their findings.
Financial planners usually start out with a bachelor’s degree. The education will prepare you for an entry-level position and may be enough to qualify you for higher paying jobs. If you want to pursue a higher paying career, you can earn a master’s degree with a concentration in financial planning.
A bachelor’s degree typically takes four years to complete. Some universities offer career development centers, which include resume reviews, networking events, and even job boards.
Financial advisors are required to register with the Securities and Exchange Commission. Most states also require licenses for securities transactions, and some require licensing for financial planning. Licensing is important because it shows potential employers that you are trained.
Common designations for financial planners
Whether you are seeking an advisor to plan your financial future or want to assemble a team of players with your best interests in mind, designations can help you do so. They indicate the educational level of an advisor and provide a way to clarify their qualifications. However, it is important to know that each designation has its own specific requirements.
The Certified Financial Planner (CFP) designation is awarded to professionals who have met rigorous requirements for competency in all areas of financial planning. Candidates must complete coursework and pass an exam. They also must have at least three years of experience in the financial industry. CFPs must also demonstrate their ethical fitness.
Another common designation is the Chartered Financial Analyst (CFA). The CFA is an international certification that requires four years of relevant experience and a rigorous self-study program. The CFA charterholder must adhere to a strict code of conduct. They are educated on a wide variety of topics, including investment research, portfolio management, and asset allocation.