How to Make a Career Transition to Financial Planner

There are a few things you should know if you’re considering a career in financial planning. Generally, career transitioners have at least a bachelor’s degree in a related field, such as finance or business. It may also be beneficial to begin with gaining your Certified Financial Planner certification. And while every person’s journey is different, these two tasks could be a good starting point to becoming a financial planner. Keep reading to learn more.

Why Consider Financial Planning as a Second Career

Financial planning could be a satisfying second career for those who have established themselves in the business and finance sector. Helping people make sound financial decisions that secure their futures and help them meet their goals may feel rewarding. If you have a relevant bachelor’s degree, some business or finance experience and a desire to help people, a financial planning career could be a fitting second career.

Here are a few more reasons to consider becoming a financial analyst:

  • Certified financial advisors may expect good job security for the foreseeable future, as the Bureau of Labor Statistics notes that employment of personal financial advisors, which can also be referred to as financial planners, is projected to increase 4% from 2019 to 2029. The BLS attributes this growth to the aging population and major shifts in retirement account options, and although digital financial advising tools are available, people will continue to seek advice from financial planners for complex advice. Becoming a CFP may boost your credibility and set you up for success in this ever-changing industry.
  • A range of job opportunities may be available to those with financial planning training and certification. Such opportunities include working closely with individual clients, helping them choose insurance plans or investments. Working as a wealth management advisor means constructing financial portfolios for high-net-worth clients or you may perform a variety of investment research and management on behalf of your firm or its clients.
  • As of May 2020, the median annual personal financial advisor salary was $89,330, according to the BLS. Gaining experience, or earning a Master of Business Administration (MBA) degree may lead to career advancement and growth opportunities.

Do You Need an MBA in Financial Planning to Change Careers?

Obtaining at least an undergraduate degree in any field is often required to begin the journey of becoming a certified financial planner, although a degree in business or finance may help you prepare for this career. Earning an MBA is not a prerequisite to working as a financial planner. Depending on the school, you may be able to choose from several MBA concentrations. Getting your MBA, especially with a finance concentration or financial planning concentration, may give you an advantage of additional skills when it comes to landing a job or bringing industry expertise to your clients’ portfolios.

The good news is it’s never been more convenient to earn an MBA. Many reputable universities now offer online MBA programs to allow working professionals to advance their careers while they stay employed outside of business school. Getting into business school requires a few extra steps, for example some programs require taking the GMAT exam, but the payoff may be worth it.

Another option to work in finance as a second career is to become a Certified Public Accountant (CPA). If you have a bachelor’s degree in accounting and work experience in the field, you could become a CPA. Your expertise in both personal accounting and personal finance may make you uniquely valuable to your clients as they navigate their path to a secure financial future. To prepare for your CPA exam and/or CFP certification, consider obtaining a master’s degree in accounting. You may choose to apply to a variety of accounting graduate degree programs to facilitate your career growth.

How to Make a Mid-Career Change to Certified Financial Planner

So how do you start a career as a financial planner? Every person’s path to becoming a Certified Financial Planner is different, but there are a few steps in the process that don’t change. These are the five basic steps an aspiring CFP might want to complete before starting their career in this field:

  1. Complete the Education Requirements

    The education requirement for becoming a CFP involves two parts:

    First, earn your bachelor’s degree. While the CFP certification accepts a BA or BS in any discipline, a degree in business, finance, accounting, or a related field may help prepare you for a career in financial planning. Be sure to select an accredited bachelor’s degree program.

    Second, complete a CFP Board Registered Program. This is a separate requirement that ensures you acquire the skills and knowledge necessary to serve your clients’ financial planning needs. Topics covered in the coursework include estate, investment, insurance, tax planning and much more. Some degrees and credentials may allow you to bypass some of this coursework.

  2. Pass the CFP Exam

    The CFP exam ensures that you have attained the knowledge and skills necessary to provide expert financial advice to your future clients. Currently, the CFP exam consists of 170 multiple choice questions and must be completed in one day with the exam period split into two, three-hour sessions. Test questions cover all areas of financial planning, including tax, estate, retirement, investment, education and insurance planning. Only students who have completed a CFP Board Registered Program of study are allowed to sit for the exam. You may register to take the exam before completing the education requirement, but CFP must receive coursework completion verification before the listed Education Verification Deadline for your exam date.

  3. Complete Work Experience Requirement

    There are two pathways to gaining the work experience required for CFP certification.

    The 6,000-Hour Standard Pathway: Hours are accumulated by working directly with clients, understanding their circumstances and goals, and then developing, presenting and implementing those financial planning recommendations. Other options for gaining experience in this pathway include supporting or supervising other financial planners, completing an internship or residency program or teaching college-level financial planning courses. Because most colleges require instructors to have at least a master’s degree, this is another opportunity when an MBA would be helpful!

    The 4,000-Hour Apprenticeship Pathway: On this pathway, hours are accumulated by working directly with clients in all seven primary facets of the personal financial planning process. All hours must be completed under the direct supervision of a Certified Financial Planner.

  4. Sign the Ethics Declaration

    When your exam and work experience requirements are met, you’ll then complete the application for CFP. The application includes an Ethics Declaration that says you commit to acting in the client’s best interest at all times (among other things). At this point, a thorough background check is conducted as well. Once the background check is complete, you may be notified whether you meet CFP Board’s Fitness Standards. If your background check meets these standards, you move on in the process. If not, you may be contacted to discuss any issues flagged in the background check.

  5. Pay Your Fees and Earn Continuing Education Credits

    Once your education, professional training, exam, work experience, Ethics Declaration and background check are completed, you’re asked to pay the application fee and initial certification fee. At that time, you may be notified when your first year’s membership expires (currently, it’s 12 months after the last day of your next birthday month).

Six Skills That Financial Planners Use

Even after all that training, you may still have a few more things to learn to become a great financial planner. Because financial advisors work with clients all the time, it should be no surprise that certain “soft skills” may make a huge difference in a financial planner’s success. The better you relate to clients, the more likely it is that they trust you (and refer their friends and associates to you). Here are six skills that financial planners may use in their careers:

  1. Communication Skills. Financial planners interact and communicate with clients every day and often find themselves explaining complicated concepts to people with limited financial literacy. Being able to translate financial jargon into plain language is critical when helping people understand their financial challenges and options.
  2. Interpersonal Skills. Clients count on their financial planner to protect their assets and investments so building trust with clients is critical to a financial planner’s success.
  3. Analytical Skills. A good financial planner must evaluate all options and angles to develop effective plans for their clients’ portfolios. This may include analyzing trends, forecasting, shifting regulations and making adjustments accordingly to maximize their client’s portfolio.
  4. Attention to Detail. A financial planner works with many clients simultaneously, constantly monitoring their portfolio performance and looking for opportunities to make improvements. Staying up to date on markets and investments, coordinating communications with clients and creating performance reports for all clients requires the utmost attention to detail.
  5. Problem-Solving. Each client presents unique situations and challenges. One client may be far behind on their retirement planning, and the next client needs you to help them figure out how to send three children to college. You may find yourself thinking outside the box to develop creative solutions for your clients’ financial problems.
  6. Strong Ethics. People place a tremendous amount of trust and responsibility in their financial planner’s hands. When you sign the CFP Ethics Declaration, you make a promise to act as a fiduciary. This is a commitment to maintaining high ethical standards, including taking action that is always in your clients’ best interest.

Maintaining Your New Career as a Certified Financial Planner

After your initial year of CFP membership, renewals run on two-year periods. Therefore, membership renewal fees are charged every two years. During each two-year reporting period, CFPs are required to complete 30 continuing education (CE) hours:

  • Two hours of Ethics training
  • 28 hours covering the CFP Board’s Principal Topics

If you take continuing education courses with a Registered CFP Sponsor organization , the sponsor is required to report course attendance and completion to CFP within two weeks of the class concluding. If you take a class that is not registered with CFP, you must report the course completion yourself. There is currently a $60 reporting fee for each non-registered course submitted for review.

Plan carefully! If you complete extra CE hours, they cannot be rolled forward to a future reporting period.

Is Switching to a Career in Financial Planning Worth It?

If you are sincerely interested in finding ways to help a wide variety of clients reach their financial goals, then becoming a CFP may be a great fit for you. But maybe you are not sure your bachelor’s degree has properly prepared you for a CFP career. If you are not entirely committed to the financial planning career path, perhaps you’d rather consider pursuing an MBA. Depending on your goals, this may be a great way to explore more opportunities in the business realm while gaining valuable skills and knowledge, no matter what career you choose. In the end, only you know whether making the change to a career in financial planning may be worth it for you

Last Updated April 2021