General Description: Financial planning was once a service reserved for the wealthy; today it is a thriving industry with mass appeal. People often hire financial planners when they incur a major life change; such as when they get married, inherit a significant amount of money or start a family. With the large number of people expected to retire in the next decade, experts predict there will be significant demand for financial planning services for people aged fifty and over.
The term “financial planner” encompasses a wide assortment of career options ranging from Certified Financial Planners who have been accredited by the Certified Financial Planner Board to Stockbrokers to Financial Educators who teach basic money management skills. The term is also sometimes used by professionals (i.e., accountants, insurance agents or attorneys) who offer financial advice without having the specific training and certifications needed to become registered certified financial planners.
The bottom line is that most people can call themselves financial advisors without having to meet a set standard of educational credentials. That said, there are most definitely specific requirements to be considered a credentialed or licensed financial planner. In addition, there are governmental regulations in place that impact the boundaries of the services offered by financial planners.
Consequently, if you are interested in pursuing financial advising as a career, you need to spend time familiarizing yourself with the professional options, and then be very careful to obtain the required license, credentials or training needed for that particular specialty (see the Associations section below for helpful resources).
Options for Flexibility: Many financial planners work out of their home offices and meet with clients on an appointment only basis. Others work for financial services companies in an office environment. Planners charge by the hour, on a project or retainer basis, or as a percentage of the value of the assets managed. Others are commission-only planners, who do not charge for their time, but receive a commission on the products they sell. Still others, use a combination of commission and hourly rates. Financial educators can work independently or affiliate with an educational institution. They earn income from 1-to-1 consultations, classes, workshops and publications.
Resources for Further Exploration:
Association for Financial Counseling and Planning Education (AFCPE)
Certified Financial Planner Board
National Association of Personal Financial Advisors
National Association of Security Dealers
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