The financial advisor is charged with guiding the consumer through the confusing and frequently overwhelming landscape of investing, tax, estate, and financial management. The consumer’s end goal is to have enough money to spend during one’s life and to protect and preserve a portion for future generations. The financial advisor also helps the client meet specific goals such as funding the children’s college education or buying a vacation home. Consequently, the advisor must be akin to an all-purpose money advisor — and frequently a personal counselor and confidant as well.
The financial advisor may come from a variety of academic backgrounds. Additionally, an appropriate college major may be influenced by the designation of the financial advisor and their specialty. For example, a financial advisor working for an investment brokerage company may need a different skill set than a fee-only financial planner with their own shop. Regardless of the college major, the future financial advisor will need specialized training on top of the college degree in order to pass the requisite licensing exams.
Business and Finance
For the student entering college with the goal of becoming a financial advisor, a business degree with a concentration in finance is ideal. The business student gains a broad understanding of capitalism, money, banking, and economics. All are important topics in understanding financial planning and related matters. The finance concentration drills down into how to value a business, stock, or other financial product. This degree will put any student on a sound footing to enter the financial advisory field. The specialized financial advisory training will supplement the business major's strong quantitative and analytical background.
Today, there are 'financial planning' majors or certificate programs cropping up at some universities as well. For example, San Diego State University offers a B.S. degree in Financial Services with a certificate in personal financial planning. With a business degree and a concentration in financial planning, the postgraduate coursework to obtain financial advisor licensure may be minimized. This degree covers many aspects of a financial advisory role such as investments, taxes, and estate planning. (For related reading, see: Want to Be a Financial Planner? Click Here.)
Economics and Accounting
An economics degree, with courses in finance, also offers a foundation for the financial advisor. Economics conveys both global and broad macro concepts as well as the important micro topics such as monetary and fiscal policy. The planner with an understanding of economics is equipped to help their clients traverse the business and financial market cycles.
In general, any business major is a sound foundation for a financial planning or advisory career. The basic requirements for the business major – accounting, economics, marketing, finance, and management – lay the groundwork for a successful transition into the financial planning field. You'll find that many financial advisors hold a CPA or other professional designation. (For related reading, see: CPA, CFA or CFP - Pick Your Abbreviation Carefully.)
Although a business degree is preferable for the financial advisor, an individual who decides to enter the financial planning field after college or late in their college studies may successfully proceed without a business degree. That is one of the benefits of a financial advisory career; there is no required college major in order to enter the profession.
Relating to the Client
A liberal arts, communications, or psychology degree offers important communication and analytical skills. Although understanding investing and business concepts is important, much of a financial advisor's task is dealing with people and their emotions surrounding money. The less technical majors help the advisor communicate and relate well to the client.
The psychology student learns about emotions, fears, anxieties, and how the mind works. Clearly, money and financial issues can be highly emotional issues. This training aids the financial advisor in their client relationships.
Communications majors also benefit from analytical skills and the ability to make complex topics simple. When supplemented by the finance and investing concepts, the planner with a communications degree can be a successful financial advisor.
The liberal arts teach sound reasoning and analytical skills. When integrating and proposing a financial plan, the advisor with excellent critical thinking skills will be well-prepared to educate and explain the various options. (For related reading, see: An Introduction to Financial Planning Organizations.)
The Bottom Line
There is no required college major for a career as a financial advisor. That said, there are advantages and disadvantages to each type of college major and successful advisors come from a variety of backgrounds. Since there is additional study and certification required to obtain licensure and begin practice as a financial advisor, the dedicated applicant can have a successful career as a financial advisor with any college major. (For related reading, see: Trends Challenging Financial Advisors.)