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Financial planning is a lucrative industry that has only continued to grow within recent years. In fact, as of 2016 there were approximately 271,000 financial planners in the U.S. As if that’s not enough, the United States Department of Labor predicts that number will grow 15% by 2026. With numbers like that, prospective financial planners must enjoy a healthy bit of competition and work hard to differentiate themselves from their competitors. If you’re interested in the field, planning out the best route forward is the smartest way to gain a competitive edge later on. 

Financial planners are not required to obtain a college degree or an advanced degree, which is why you may find some financial planners who are in their second career. With that said, financial planning firms will often view a degree as a prerequisite and favor those who possess one. The most common college degrees for a career in financial planning are finance, economics, business, or statistics.

With or without a degree, prospective planners are required to take a number of exams administered by the Financial Industry Regulatory Authority (FINRA): 

  • The Series 65 exam must be passed to become a financial advisor. Series 65 is a general exam and allows for planners to offer investment advice and financial planning services. This license restricts planners to only working on a non-commission basis, relying on hourly charges for any services offered. 
  • To sell securities, planners must take the Series 7 exam, the most general of securities licenses. With a Series 7, planners can sell every type of security save commodities futures, real estate, and life insurance. The Series 7 can be combined with the Series 63, 65 or 66 to offer a more specific suite of products and/or advice based on the role of the financial professional.

In addition to FINRA exams and licenses, financial planners may opt to continue the certification process a few years into their careers. Further certifications are typically more specialized and help differentiate you from competition, but they can occasionally entail coursework and further education. NAPFA, the National Association of Personal Financial Advisors, recommends that planners obtain at least one extra certification, which are:

  • The Certified Financial Planner (CFP) 
    • This certification is an endorsement of expertise from the Certified Financial Planner Board of Standards in the areas of financial planning, estate planning, retirement, taxes, and insurance. 
    • A bachelor’s degree from a CFP accredited college is a required prerequisite to obtain CFP certification.
    • A cumulative exam is taken to become certified.
    • Certification must be maintained by completing continuing education (CE) programs every two years.
  • Chartered Financial Consultant (ChFC) 
    • Administered by the American College of Financial Services, the ChFC designation is a lesser known, yet still distinguished, alternative to the CFP certification. 
    • Requires three years experience in finance, but no college degree. 
    • Education to obtain certification is longer than that of the CFP, requiring 9 college-level classes.
    • Exam is not cumulative. After each course there is a single, final exam. 
    • Requires CE credits.
  • Personal Financial Specialist (PFS)
    • The PFS is a special credential given to CPAs who are experts in helping people with any aspect of wealth management.
    • Granted by the American Institute of Certified Public Accountants (AICPA) to CPAs who have demonstrated signification education and experience in personal financial planning. 
    • Applicants must be an AICPA member, hold a CPA certification, have two or more years of full-time teaching or business experience in financial planning within 5 years of applying for credential, and at least 75 hours of financial planning education prior to application. 
    • The credential signifies that CPA is both an expert in financial planning and taxes.
  • Chartered Financial Analyst (CFA)
    • Administered by the CFA Institute, applicants must have a bachelor’s degree, as well as four years professional experience at a full-time job where they dealt with investment decisions.
    • To earn the credential, applicants have to pass a series of three exams in sequential order. It is estimated that the appropriate study period consists of 300 hours to prepare for each exam. 
    • All 3 tests are 6 hours long and only offered a few times a year. 
    • Upon enrollment, applicants must sign a Professional Conduct Statement outlining the CFA’s Code of Ethics and Standards of Professional Conduct. Applicants must disclose any professional conduct related investigations, complaints, disciplinary proceedings, or litigation they have been a part of.

Furthermore, some of the above specialties will require further licensing if the planner wants to sell insurance or investments. 

Financial planning is a great career path in that it allows incredible growth opportunities and the chance to learn more at every stage of your career. Though it can be a hard industry to break into, a hunger for knowledge and an attitude of perseverance will take you far. For more information on the financial planning industry, check out some of my other blogs!

Chris Jacob is a Registered Representative with Saxony Securities, Inc.. Securities offered through Saxony Securities Inc. (SSI). Member FINRA, SIPC. Non-security products and services or tax services are not offered through SSI. Cadeau is not affiliated with SSI.