How to Become a Financial Planner: A Beginner’s Guide for 2020
They say money makes the world go ‘round, so there’s no question that financial planning is an influential yet demanding career.
If you’ve ever watched a family member struggling under a mountain of debt, or heard a friend lament over never being able to save enough for a house deposit, you can certainly understand the value of the financial planning profession.
While we often imagine them at the helm of profitable businesses, or in government offices creating national budgets, financial planners work with people from all walks of life and from all kinds of financial backgrounds.
It’s a profession that requires a high level of skill, and a passion for helping people and businesses alike. The role of a financial planner is broad. They don’t just formulate financial plans; they educate, assist and offer financial advice. It’s a job where you can go from crunching numbers one minute, to empathising with a client’s situation the next.
If you’re someone with a natural aptitude for handling money, the idea of pursuing a career in financial planning might have already crossed your mind. And since the industry is so vast, no matter where your interests lie, there’s going to be a role in financial planning for you.
However, it can be confusing trying to wade through all the information you need on your own, and you might feel ill-prepared to take the next step with so many unanswered questions, like:
This guide will analyse each of these in six chapters to help inform your decision, and give you the industry statistics and advice you need to begin your career journey as a financial planner.
You’ll also hear advice and industry insights from highly experienced Superannuation Manager and Financial Planner at Suttie Financial Group, Mr Roland Blazevic.
Ready to take your passion to the next level?
Let’s dive in.
From the lucrative salary to the emotional rewards, discover the perks of being a financial planner.
Discover the skills and traits of financial planners, and the challenges they overcome.
Hint: there’s a perfect role for you.
From the FASEA Exam, to work experience, to the Code of Ethics standard. There’s a lot to unpack here.
5. OTHER CAREERS IN FINANCE
With an industry this vast, you can have your pick of a variety of careers. Find out which could suit you best.
Degrees, diplomas and bridging knowledge — oh my! These are the new education standards for financial planners.
Table of Contents
- 1 But First: What is a Financial Planner?
- 2 The Benefits of Being a Financial Planner
- 3 Could You Thrive in a Financial Planning Career?
- 4 Can You Still Be a Financial Planner if You Don’t Like Client-facing Work?
- 5 How to Become a Financial Planner
- 6 Other Careers in Finance
- 7 Financial Planning Qualifications
But First: What is a Financial Planner?
Financial planners are qualified professionals who work closely with individuals and organisations to create long-term financial goals, and assist clients with achieving those.
The very crux of the role is helping people manage their money. However, a financial planner can do this in a variety of ways:
A financial planner may specialise in one or many of these things, but no matter what, a good one will always keep their client’s goals, risk tolerance and financial situation at the forefront of any planning.
Because of this, they’ll normally begin by collecting a wealth of information on their client’s financial situation, which may include a questionnaire. To help clients achieve their financial goals, a big part of a financial planner’s role includes educating. This could be anything from the basics of budgeting, to translating complex financial information into understandable actions.
What’s the difference between a financial planner vs. financial advisor?
In the Australian financial industry, the terms “financial planner” and “financial advisor” are often used interchangeably. While this isn’t necessarily wrong, it’s also not entirely correct.
Broadly, the definition of financial advisor is any professional who can help someone manage their financial situation to some extent. For example, an accountant is a kind of financial advisor.
A financial planner is a kind of financial advisor, but they specialise in the area of (you guessed it) financial planning.
The Benefits of Being a Financial Planner
There are many rewards, both material and emotional, to pursuing a career in financial planning.
First and foremost, it’s a lucrative career and you’ll be very well compensated for your hard work.
A successful financial planner has practically unlimited earning potential because income is based on the amount of recurring or new business prospects each year. Depending on where you work, your salary will be either fee-based, commission-based or a combination of both.
It’s also a stable industry with low unemployment, and because of how vast the industry is, there’s a variety of places you can choose to work. From young, modern boutique firms to highly regarded national brands, or you could even go out on your own as an independent financial planner.
It’s Not All About The Money
The emotional rewards of helping individuals, families and businesses manage their finances isn’t dissimilar to any other career where you can help people turn their lives around.
While they say money can’t buy happiness, financial stress can lead to a variety of emotional and physical health problems, including anxiety, depression and turning to unhealthy coping mechanisms such as alcohol.
Through a career in financial planning, you’ll have the capacity to help individuals, families and businesses relieve their financial burdens and make wiser investment decisions.
Imagine being able to help a young couple save a deposit for their first home: their elation and happiness would be caused, in part, by you. It’s a rewarding feeling to assist others with a leg up in life – financial or otherwise! Or imagine helping a parent manage their finances as they go through a divorce. By easing the burden of their new – perhaps costly – financial situation, they’ll have the emotional energy they need to handle everything else going on.
It’s an amazing thing to empower people to take control of their lives through financial coaching.
This is something Roland Blazevic, Superannuation Manager and Financial Planner at Suttie Financial Group, knows well. Having been in the finance industry for over 30 years, his passion for helping people achieve their retirement goals led him from accounting into financial planning. He says the greatest reward is, “helping clients achieve or get close to their financial goals.”
“Their satisfaction and appreciation is personally rewarding.”
“Most clients don’t really understand what is involved in providing financial planning advice, including considering all the financial planning regulations which all planners need to deal with, as well as the recent education requirements that need to be undertaken by existing and new financial advisers,” he says.
But the hard work and stress of keeping up with the industry is made worth it by your clients’ successes.
Financial Planning Statistics
Could You Thrive in a Financial Planning Career?
Financial Planning Skills
- An outgoing personality
- Effective written and verbal communication skills
- Excellent ability to listen
- Ability to empathise with and understand client’s unique needs
- Ability to work under pressure
- Networking and relationship building skills
- Persistence and passion for the job
As a financial planner, soft skills like communication and empathy go hand in hand with technical skills like analytics and mathematics, in order to provide the best client care. Your industry reputation actually depends on the successes of your clients. So, being invested in their unique situations, by listening, understanding and empathising with them, is crucial for the job.
Roland also says, “The passion to understand and help people, from all sorts of backgrounds and financial situations is an important trait to have. In addition, the ability to learn from all past experiences and the drive to get better at what you do.”
The Challenges of Financial Planning
It’s a challenging industry, especially when first starting out. You’ll need to be prepared for everything that comes your way if you want to succeed.
Some of the challenges in the role include:
Building and maintaining a strong client base
How will you attract and retain clients? Your relationship with each individual is paramount, and you’ll need to stay connected to all of them.
Staying on top of changing financial markets and products
That includes sorting fact from misinformation as new trends emerge. As if that wasn’t enough of a challenge, you also need to know the longstanding data that is accurate and reliable.
Handling client emotions and expectations
Can you relate to your clients on an emotional level? You might be a logical thinker, but your client’s likely won’t be. For their happiness, you need to ensure they have the right expectations.
Think you’ve got what it takes? Let’s take a deeper dive into all the challenges of being a financial planner, and explore the skills that will help you overcome them. Roland also has plenty of great tips for succeeding in the industry, and they’re all here.
Can You Still Be a Financial Planner if You Don’t Like Client-facing Work?
The biggest part of a financial planner’s role is developing and maintaining positive relationships with their clients, and assisting them with reaching their unique goals. However, not everyone in finance is a fan of networking, and there are certainly roles for people who’d just prefer to dive into the technical end.
If you’re someone who loves the mathematical side of things, with a passion for analytics and researching financial products and markets, para-planning is a fantastic option. Para-planners work closely with financial planners, however they handle the technical and administrative duties so the financial planners have more time to dedicate to clients.
Para-planning is also a great way to get your foot in the door of the finance industry. Without the pressures of client-facing work, you’ll be able to develop and hone the technical skills you’ll need to be successful as a financial planner. You’ll have chances to network with people in the industry, giving you a better chance of landing a full-time financial planning role if that’s what your goal is.
Para-planners are the administrative backbone of many larger financial planning companies. But don’t be mistaken — para-planners aren’t administration assistants. Discover their many responsibilities, along with industry statistics and how to become one.
How to Become a Financial Planner
This could be the first or hundredth time you’ve started exploring careers in financial planning, but in such a large and diverse industry, where do you start? It’s not as simple as knowing you’d like to become a financial planner. There are education requirements you need to meet, a Code of Ethics Standard, the FASEA exam and a professional year of work experience.
Especially for new financial planners, there are quite a few requirements to meet before you can be seen as a qualified financial planner in the eyes of ASIC (Australian Securities and Investments Commission).
The FASEA Exam
This compulsory exam set by FASEA goes for 3.5 hours and consists of both multiple choice and written answer questions. The exam covers the following topics:
If you’re a new entrant, you must have successfully completed the exam before beginning the third quarter of your professional year.
The Work and Training (Professional Year) Standard
FASEA’s professional year standard commenced January 1st 2019, and if you’re a new entrant you must complete it.
It needs to be a full-time year (about 1600 hours), during which 100 of those hours are dedicated to structured training. Throughout each quarter of the year, you’ll undertake a new key area of training:
Once you’ve passed the FASEA exam, you can be known in the second half of the year as a Provisional Financial Planner.
Professional Standards for Financial Planners
Code of Ethics Standards
The Code of Ethics framework is both a legal matter and a way to ensure client needs are at the forefront of all work. There are 12 standards that promote trustworthiness, competence, honesty, fairness and diligence. They can be found on FASEA's website.
Continuing Professional Development Standards
Another part of maintaining financial planning standards is participating in 40 hours of professional development per year. This allows professionals to continue expanding their knowledge and skills.
Do You Need a Certification?
You don’t need a certification to offer financial advice. However, acquiring one can help you find a job faster, or if you already have a financial planning role, it can give your clients an enhanced sense of trust in your competencies.
You’ll also have a higher earning potential. Payscale estimates certified financial planners earn between $72k and $134k.
Other Careers in Finance
The finance industry is incredibly vast and there’s a job for practically any interest you could have when it comes to money. From working with clients on a personal level, to corporate finance, to overseeing investment portfolios. There are a lot of places to begin your career – or even move into later in your career for a new challenge.
Here are some of the top careers you might be interested in:
Average salaries for these jobs range from $44,137 to $151,000.
Financial Planning Qualifications
When it comes to qualifications, there are actually quite a few financial planning courses that will qualify you to work in the profession, but the one you need depends on your situation.
As of January 1st 2019, FASEA introduced a new education standard for both new and existing financial planners. While existing professionals have until January 1st 2026 to meet the new standards, new entrants must complete either:
If you’re just looking to dip a toe in the water before diving in, there are a number of financial planning courses online, both free and paid. By getting an insight into what financial planners do and building foundational knowledge, you’ll be able to make a confident decision about whether it’s the right career path for you.
They say the best things in life are free, but does that count for financial planning courses? Find out the pros and cons of free and paid courses.
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