What Personal Financial Advisors Do
Personal financial advisors provide advice to help individuals manage their finances and plan for their financial future.
Most personal financial advisors work in the finance and insurance industry or are self-employed. They typically work full time and may meet with clients in the evenings or on weekends.
How to Become a Personal Financial Advisor
Personal financial advisors typically need a bachelor’s degree. A master’s degree and certification can improve one’s chances for advancement in the occupation.
The median annual wage for personal financial advisors was $87,850 in May 2019.
Employment of personal financial advisors is projected to grow 4 percent from 2019 to 2029, about as fast as the average for all occupations. As the population ages and life expectancies rise, demand for financial planning services should increase.
Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.
Personal financial advisors typically do the following:
- Meet with clients in person to discuss their financial goals
- Explain the types of financial services they provide to potential clients
- Educate clients and answer questions about investment options and potential risks
- Recommend investments to clients or select investments on their behalf
- Help clients plan for specific circumstances, such as education expenses or retirement
- Monitor clients’ accounts and determine if changes are needed to improve financial performance or to accommodate life changes, such as getting married or having children
- Research investment opportunities
Personal financial advisors assess the financial needs of individuals and help them with decisions on investments (such as stocks and bonds), tax laws, and insurance. Advisors help clients plan for short- and long-term goals, such as meeting education expenses and saving for retirement through investments. They invest clients’ money based on the clients’ decisions. Many advisors also provide tax advice or sell insurance.
Although most planners offer advice on a wide range of topics, some specialize in areas such as retirement or risk management (evaluating how willing the investor is to take chances and adjusting investments accordingly).
Many personal financial advisors spend a lot of time marketing their services, and they meet potential clients by giving seminars or participating in business and social networking. Networking is the process of meeting and exchanging information with people, or groups of people, who have similar interests.
After financial advisors have invested funds for a client, they and the client receive regular investment reports. Advisors monitor the client’s investments and usually meet with each client at least once a year to update the client on potential investments and to adjust the financial plan based on the client’s circumstances or because investment options may have changed.
Many personal financial advisors are licensed to directly buy and sell financial products, such as stocks, bonds, annuities, and insurance. Depending on the agreement they have with their clients, personal financial advisors may have the client’s permission to make decisions about buying and selling stocks and bonds.
Private bankers or wealth managers are personal financial advisors who work for people who have a lot of money to invest. These clients are similar to institutional investors (commonly, companies or organizations), and they approach investing differently than the general public does. Private bankers manage a collection of investments, called a portfolio, for these clients by using the resources of the bank, including teams of financial analysts, accountants, and other professionals.
Personal financial advisors held about 263,000 jobs in 2019. The largest employers of personal financial advisors were as follows:
|Securities, commodity contracts, and other financial investments and related activities||58%|
|Credit intermediation and related activities||13|
|Insurance carriers and related activities||4|
|Management of companies and enterprises||2|
Personal financial advisors typically work in offices. Some also travel to attend conferences, teach finance seminars in the evening, and attend networking events to bring in more clients.
Most personal financial advisors work full time and some work more than 40 hours per week. They often go to meetings on evenings and weekends to meet with prospective or existing clients.
This table shows a list of occupations with job duties that are similar to those of personal financial advisors.
|Occupation||Job Duties||Entry-Level Education||Median Annual Pay, May 2019|
Budget analysts help public and private organizations plan their finances.
Financial analysts provide guidance to businesses and individuals making investment decisions.
Financial managers create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.
Insurance Sales Agents
Insurance sales agents contact potential customers and sell one or more types of insurance.
|High school diploma or equivalent||$50,940|
Insurance underwriters evaluate insurance applications and decide whether to provide insurance, and under what terms.
Real Estate Brokers and Sales Agents
Real estate brokers and sales agents help clients buy, sell, and rent properties.
|High school diploma or equivalent||$50,730|
Securities, Commodities, and Financial Services Sales Agents
Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets.
For more information about personal financial advisors, visit
Global Academy of Finance and Management
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Personal Financial Advisors,
at https://www.bls.gov/ooh/business-and-financial/personal-financial-advisors.htm (visited ).