What Does a Financial Advisor Do?

A financial advisor is a professional who recommends products and strategies to achieve a client’s financial goals. Advice ranges from setting up budgets for clients to choosing investments and recommending tax-advantaged accounts for education or retirement savings.

Financial advisors typically work at investment firms, banks, and insurance companies, or independent financial advisors may choose to be self-employed in their own advisory firms. 

Discover what financial advisory is, the types of financial advisor positions, and the educational requirements to begin your career as a financial advisor.

What is a financial advisor?

A financial advisor is a consultant who offers advice and guidance to clients who need help managing their wealth and reaching their financial goals. As a financial advisor, you may assist individuals, families, companies, or large organizations in creating financial plans, making investments, and answering financial questions.

What does a financial advisor do?

A financial advisor helps clients decide how to manage their money. They assess their client’s financial health and determine their long and short-term goals before making recommendations to meet them.

As a financial advisor, you help your clients invest their money in the stock market and other types of investments, recommend products such as life insurance, or offer assistance with tax planning. You may also educate your clients about their financial health and habits that can help them build their wealth.

In addition to working directly with clients, you'll spend time marketing your services. You'll also likely spend considerable time establishing and building relationships with your clients.

Financial advisor tasks and responsibilities

As a financial advisor, your daily tasks and responsibilities may vary depending on the industry or specialty you work in. Common responsibilities you may expect as a financial advisor include:

• Assisting clients with important financial decisions

• Offering financial advice

• Monitoring and researching client investments

• Buying and selling financial products, such as bonds or stocks

Types of financial advisors

As a financial advisor, you may choose a specialty that aligns with your interests and skill set. Some financial advisors specialize in an area, such as retirement planning or wealth management. Others work with a specific type of client, like teachers, for example, and offer general financial advice. Others specialize in a product, such as life insurance.

Types of financial advisors and their average annual salaries include:

• Asset manager: $88,241

• Certified financial planner (CFP): $102,239

• Chartered financial consultant (ChFC): $91,520

• Financial coach: $59,931

• Fiduciary financial advisor: $96,318

• Financial planner: $81,276

• Investment advisor: $122,080

• Personal banker: $53,206

• Wealth advisor: $120,781

*All annual base salary data is sourced from Glassdoor as of August 2024 and does not include additional pay, such as commission and benefits.

If you become a certified financial advisor with a designation such as CFP or ChFC, you must complete the requirements to earn their titles. Per the CFP Board, to become a CFP, you must complete coursework on financial planning from a CFP Board Registered Program and obtain at least a bachelor’s degree [1]. You then take and pass the CFP exam, complete 6,000 hours of professional experience, and meet the CFP Board’s ethical requirements, which include signing a document and undergoing a background check.

As an aspiring ChFC, you must have three years or more of financial planning experience. You may then enter the Chartered Financial Consultant Program offered by the American College of Financial Services, where you’ll complete required courses, take examinations, and agree to their code of ethics.

How to choose a financial advisor

To find a financial advisor that will benefit you and your finances, it’s important to determine which area or specialty you’d like financial expertise in, whether that be debt management or insurance policies. Other important factors to consider when choosing a financial advisor include your budget versus their fees, their credentials, and whether or not they are a fiduciary following a code of ethics to best serve you.

Whoever you choose as your financial advisor, you want to ensure that you build a relationship with someone you trust who has the necessary professional qualifications to deliver your financial guidance and advice.

Essential skills for financial advisors

To become a successful financial advisor, you may need additional workplace and job-specific skills, including:

• Financial aptitude: Financial advisory positions require an understanding of financial products and a broader knowledge of how the finance industry operates to make the best decisions for clients.

• Customer-first mentality: As a financial advisor, your client’s needs must come first. If you become a Certified Financial Planner (CFP) or a Chartered Financial Analyst (CFA), you’ll have the responsibility of acting within a code of ethics.

• Marketing yourself: Building relationships with clients and seeking out new business will likely be part of your job as a financial advisor. Your ability to maintain contacts, build a social media presence, and create a website may lead you to success in this role.

• Presenting: You may present personalized plans for clients or speak to a group about financial products and how your services may benefit them. To do so, you need strong verbal and written communication skills.

Financial advisor salary and job outlook

According to the US Bureau of Labor Statistics, financial advisors make a median salary of $99,580 [2]. Additionally, the job outlook for financial advisors remains positive, with a 13 percent growth projected from 2022 through 2032, averaging around 25,600 new positions becoming available each year [2].

How to become a financial advisor

Depending on your field or specialty, the path you take to become a financial advisor may vary. If you decide to pursue a role similar to financial advisory, the initial educational path you take may be the same, though certification and licensure requirements may eventually differ. Consider the following options for becoming a financial advisor.

Education and training

Many employers prefer financial advisor candidates with a bachelor’s degree, and many companies require licensure for more advanced roles.

1. Consider a bachelor’s degree or certificate. 

Financial advisors typically have a bachelor’s degree, with 74 percent of professionals holding a bachelor's and 12 percent holding a master's degree, according to data from Zippia [6]. Many financial advisors pursue a degree in finance, economics, business, or accounting. If you decide to become a Certified Financial Planner, you’ll need to complete a CFP Board Registered Program, which could be a certificate program or an accredited degree program.

Read more: How to Get a Bachelor's Degree

2. Get licensed.

General financial advisory doesn’t require specific licensure, however, if you pursue selling products such as bonds, mutual funds, and securities, you need a license from FINRA, the Financial Industry Regulatory Authority. The Series 65 exam lets you give clients financial planning and investment advice. Alternatively, the combination of the Series 7 and Series 66 exams allows you to sell securities as an Investment Adviser Representative (IAR).

3. Take financial advisory courses. 

You may pursue formal training to work as a financial coach who teaches people healthy financial habits, as it increases your credibility among clients and potential employers. You may choose to learn the skills you need by taking online courses or reading books about the subject. Explore courses that may help you expand your knowledge of finance:

• The Fundamentals of Personal Finance from SoFi

• Financial Planning for Young Adults from the University of Illinois

• Personal & Family Financial Planning from the University of Florida

Read more: 7 Finance Entry-level Jobs + How to Get One

Related job titles

On your path to becoming a financial advisor, perhaps starting with entry-level finance jobs, you may discover educational requirements overlap with related job titles. Consider roles related to financial advisors and the requirements for each.

Insurance broker

Average annual US salary (Glassdoor): $70,704 [3]

Requirements: Bachelor’s degree; licensing requirements vary by state

As an insurance broker, you work with your clients to select and take out insurance policies. Your clients may be individuals as well as companies and businesses. You may specialize in a specific type of insurance, such as health insurance or life insurance. Upon determining what your client needs, you offer advice, analyze their financial portfolios, and make amendments to policies as time goes on.

Debt manager

Average annual US salary (Glassdoor): $67,655 [4]

Requirements: Bachelor’s degree; state licensure

Debt managers assist individuals and companies in overcoming financial stressors, such as long-term or short-term debt. As a debt manager, you work with your clients to understand and analyze their debt and financial position. You then work together to develop a plan for managing the debt by budgeting, consolidating the debt, and creating payment plans.

Estate planner

Average annual US salary (Glassdoor): $84,897 [5]

Requirements: Bachelor’s degree or Certified Estate Planner certification

As an estate planner, you work with clients to create end-of-life plans and offer financial advice. Estate planners typically help their clients draft up a will, set up beneficiary accounts, name successors, secure insurance, and manage their accounts.

Next steps for becoming a financial advisor

Financial advisors guide clients through financial plans so they can reach their financial goals and plan for the future. To begin your career as a financial advisor, pursue courses, certifications, or a degree to develop your skills. To start learning, consider the Introduction to Finance and Accounting Specialization offered by the University of Pennsylvania. Study online and at your own pace with options such as the Bachelor of Science in General Business from the University of North Texas or the Online Master’s of Accounting (iMSA) from the University of Illinois.