The basic requirement for being a financial advisor is knowledge in the areas of finance in which they practice, but true professional competency requires much more. In fact, financial advisors must wear many hats to do their jobs effectively, and those considering this field as a career should learn about what the day-to-day lives of advisors are really like.
Anyone who works in the financial industry can tell you that the first step to becoming a successful advisor is to obtain a sound education in the mechanics of whatever aspect of finance in which you intend to work. This can be a bachelor’s or master’s degree in some cases, a professional certification such as the certified financial planner designation, or just a license or two for those who wish to focus on a specific type of financial product. But your real education in this field won’t even begin until you have started your financial advisor career.
A Financial Advisor's Typical Day
The average financial advisor’s day usually begins early and often runs into evening hours, especially for those who are new in the industry. The daily schedule of a typical advisor usually will include the following:
- Prospecting – The method and amount of this will depend largely upon the circumstances of the advisor. A newly minted professional with no book of business to draw from can expect to spend at least half of every day pounding the pavement in one way or another, either by developing a referral network or meeting with prospects in person. Those who start out with a warm market in which to prospect will be spending a fair amount of time interacting with these people; for example, a new advisor who worked for a long time at another company may focus on sponsoring events for that company’s employees to generate business. Other modern methods include establishing a strong digital presence and writing a blog.
- Servicing current clients – As advisors build up their book of business, their focus will gradually begin to shift from acquiring new business to servicing current customers. Many established advisors will begin their day by reviewing client portfolios, answering client inquiries and addressing outstanding issues before moving on to new business. Most established advisors will tell you this approach is the best way to generate new business because clients who receive excellent service are happy clients who will make referrals.
- Administrative chores – Although this often can fall under the category of servicing clients, any prospective advisor should be prepared to spend a significant segment of their workday dealing with bureaucratic tasks such as compliance reports, updating client records, processing trade tickets and dealing with other recordkeeping procedures. It probably should be said here that the majority of successful advisors are able to retain a fairly large amount of detail in their heads on an ongoing basis.
- Financial planning – While this may seem obvious, you will have to make time to deliver your core goods and services to your clientele — and this can be difficult to fit into your schedule at times. Entering data into financial planning or tax programs can be a long and tedious process and requires excellent attention to detail. Even those who pay others to do the data entry portion of this will have to closely monitor this process.
- Continuing education – This inescapable element of financial planning can go considerably beyond the mere satisfaction of industry or credential educational requirements to include investment and product research. Many securities and insurance vehicles require specific training before the vendor will approve the advisor to sell them. Some advisors frequently attend week-long seminars covering specialized topics or continue earning new designations to provide the level of service their clients need. This cannot only be time-consuming but also expensive in some cases.
The Human Element
As you would expect, the other—and most important—element of any financial advisor’s job is building and managing client relationships. This begins with creating a professional impression during the prospecting phase, delivering what you promise during the planning phase and keeping in touch with them on an ongoing basis. And of course, this can be a real challenge at times—for example, when a client who has been disinherited by their parents calls you and screams that he or she will sue you because of it, even though you could not have been less involved. Your ability to educate clients and convince them to do the right thing will substantially impact your overall success, and potential liability, in this business.
And clients aren’t the only people you will need to keep on your side. You will have to learn how to talk to and negotiate with wholesalers, compliance officers, regulatory officials and customer service representatives who may or may not be in the mood to help or work with you when you need it. Your ability to maintain their goodwill can mean the difference between a major inconvenience and lost business and a smooth-running practice.
How to Prepare
If you feel like you could use some help in preparing for some of the elements described above, you may want to consider taking a few additional courses or classes in behavioral finance or psychology, listening and communication skills, and public speaking. If you are going into business for yourself as an independent advisor, then some training in how to be an entrepreneur may not hurt either. A good place to start is to talk to some advisors who take the same approach you would like to and are succeeding at it. Ask them exactly what kinds of less tangible skills they use in their daily work and how they learned them. There is a rapidly growing pool of free online courses that cover every topic imaginable available to those who wish to learn, and this can be a cheap and convenient place to start the alternative segment of your education.
The Bottom Line
Your job as a financial advisor is going to encompass a great deal more than managing investment portfolios or closing sales. Prospecting, marketing, customer service, compliance, administration, and education also will be part of your daily routine, and your ability to effectively integrate these things into your schedule can ultimately determine your level of success in the business. For more information and resources on becoming a financial advisor, visit the Financial Planning Association, the National Association of Personal Financial Advisors or the CFP Board.