What to Know About Being a Financial Advisor


Updated September 28, 2023 · 5 Min Read

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Essential Career Information

2018 Median Pay $88,890 per year / $42.73 per hour
Number of Jobs, 2018 271,700
2018, wage of lowest 10 percent $41,590
Employment Change, 2018-28 +19,100
2018, wage of the highest 10 percent $208,000
Job Outlook, 2018-28 7% (Faster than average)
Typical Entry-Level Education Bachelor's degree

Source: BLS

Alternate Job Titles

What Is a Financial Advisor?

Financial advisors instruct clients on financial matters, such as investments, savings, and retirement plans. They work with clients to determine and reach long-term financial goals. Also known as a personal financial advisor, the role requires strong analytical, communication, and sales skills.

Financial advisors enjoy lucrative careers. The average financial advisor salary exceeds $88,000 per year, according to the Bureau of Labor Statistics (BLS). Financial advisors typically need at least a bachelor's degree; however, a master's degree and/or certification helps financial advisors advance their careers.

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Frequently Asked Questions

How long does it take to become a financial advisor?

Financial advisors can pursue entry-level opportunities with a four-year degree in finance, accounting, business, economics, or a related field.

What qualifications do you need to become a financial advisor?

Financial advisors benefit from a background in finance or accounting. Many financial advisors complete on-the-job training under the supervision of an experienced financial advisor.

How much can I earn as a financial advisor?

Financial advisors earn an average salary of nearly $89,000 per year. The highest-paid 10% of financial advisors make over $200,000 per year.

What Does a Financial Advisor Do?

Financial advisors meet with clients to learn about their financial goals. They educate clients on investment options and recommend savings plans to reach the client's goals. Financial advisors also explain the risks of investment options, provide research on investment opportunities, and present reports that show the performance of the client's investments.

Additionally, financial advisors monitor their clients' accounts to recommend changes or prepare for specific goals, like retirement or college savings. Financial advisors also provide tax advice, sometimes specializing in topics like risk management, estate planning, or retirement planning. Financial advisors often hold a license to buy stocks and bonds directly. In many situations, financial advisors have a fiduciary duty to uphold the client's best interests when making financial decisions for a client.

Most financial advisors work for finance and insurance companies, while others are self-employed. Financial advisors can pursue certification, such as the certified financial planner (CFP) credential, to demonstrate their expertise. CFPs must hold a bachelor's degree, demonstrate three years of work experience, and pass an examination.

Financial Advisor vs. Financial Analyst

Both financial advisors and financial analysts research investment opportunities, study business trends, and recommend investment options. However, financial analysts typically advise businesses on financial decisions, while financial advisors work with individuals. Financial analysts might determine a company's value based on financial statements or examine investment opportunities on behalf of a company.

Financial analysts can become fund managers or portfolio managers with experience. They earn a similar salary as financial advisors, making more than $85,000 per year, on average.

Financial Advisor vs. Accountant

Like financial advisors, accountants and auditors analyze financial documents and advise clients on financial decisions. Within accounting, certified public accountants (CPAs) often serve a similar function to financial advisors. However, financial advisors focus on investments, while CPAs emphasize taxes.

Accountants can work in a variety of industries, including corporate accounting, public accounting, managerial accounting, and auditing. Accountants often need a bachelor's degree for entry-level positions, though CPAs typically must complete graduate-level coursework. The average accountant salary exceeds $70,000 per year, on average.

Financial Planner vs. Financial Advisor

Much like a financial advisor, financial planners help individuals and businesses meet their financial goals through investments. However, financial advisors offer additional financial services, such as tax advice and estate planning. Financial planners may also act as management analysts, offering feedback on a company's financial planning.

Financial advisor jobs often include some elements of financial planning. In both careers, professionals must follow ethical guidelines for offering financial services.

Become a Financial Advisor

Most financial advisors hold a bachelor's degree in a field such as finance, economics, accounting, or business. After earning a bachelor's degree, financial advisors complete on-the-job training with an experienced financial advisor.

Financial advisors can advance their careers by pursuing a master's degree or earning professional certification. This section covers how to become a financial advisor, including degree and certification options.

Associate Degree Programs

Prospective financial advisors can begin their education by earning an associate degree in finance or a closely related field. During a finance associate degree, students complete foundational courses in accounting, business, marketing, and finance. These classes introduce students to finance and help students narrow their career interests.

Students build valuable skills during an associate degree in finance. The degree emphasizes analytical skills that benefit graduates working in finance, business, and accounting. Students also gain mathematics and business skills through the degree. Additionally, associate programs incorporate general education courses like English, mathematics, and communication, which build critical-thinking and problem-solving skills.

Applicants for associate degrees usually need a high school diploma. Associate degrees typically comprise around 60 credits and take two years of full-time study to complete. After completing the degree, graduates can pursue careers as financial clerks or accounting clerks. Many entry-level careers in finance require a bachelor's degree. Applicants with an associate degree can transfer into a bachelor's program and complete the degree with two more years of full-time study.

Bachelor's Degree Programs

A bachelor's degree is the typical entry-level educational requirement for financial advisors. Prospective financial advisors can major in fields like finance, economics, statistics, accounting, or business. In any major, prospective financial advisors should consider taking coursework in finance, investments, and financial planning. Some colleges and universities offer a concentration or electives in personal financial planning.

During a finance-related bachelor's program, undergraduates may complete coursework in areas like business finance, financial accounting, and financial markets. These classes prepare graduates to analyze investment opportunities, recommend investments to clients, and manage their clients' savings. Students build analytical and problem-solving skills while preparing for entry-level opportunities in finance. Many colleges and universities incorporate internships into a bachelor's in finance, which helps students gain hands-on experience and build their resume.

A bachelor's degree generally takes four years for full-time students to complete. In addition to major coursework, undergraduates complete general education requirements and electives, with most programs requiring 120 credits to graduate. After completing the degree, graduates can work as a personal financial advisor, financial planner, or financial analyst. Graduates can also enter a master's program in finance.

Master's Degree Programs

Financial advisors can advance their career with a master's degree. A master's in finance offers advanced training in financial economics, corporate valuation, financial modeling, and financial investment. Prospective master's students can also strengthen their business training by earning an MBA with a concentration in finance. This option appeals to professionals considering careers in business or planning to start a financial advising business.

During a master's program, graduate students typically complete 30-40 credits of coursework, which often takes two years of full-time study to complete. Some accelerated programs offer a one-year route to an MBA or master's in finance. Many programs allow students to customize the degree through electives on topics like corporate financial policy, international financial markets, and entrepreneurial finance. The skills learned in a master's degree prepare finance professionals for leadership positions.

Most master's programs require at least a bachelor's degree in finance, business, accounting, or a related field. Some programs set coursework prerequisites, such as statistics. Applicants may also need to provide GMAT or GRE scores. After gaining admission to a master's program, graduate students often work with a faculty advisor to guide their progress. Many programs incorporate a finance internship to strengthen professional skills before entering the job market.

Professional Certifications

Financial advisors can pursue several types of professional certifications. For example, the Certified Financial Planner Board of Standards offers the CFP credential for candidates with a bachelor's degree and three years of work experience. Prospective CFPs must pass an exam that tests financial planning, risk management, retirement planning, and investment planning.

Financial advisors can also consider a specialized credential like chartered financial consultant (ChFC), offered by the American College of Financial Services, or chartered financial consultant (CFA), offered by the CFA Institute. The American Institute of CPAs, which credentials CPAs, also offers the personal financial specialist (PFS) credential for CPAs who complete financial specialist training, meet experience requirements, and pass an exam.

Becoming a certified financial advisor helps professionals stand out in the job market and increase their earning potential. ChFCs earn, on average, 51% more than advisors without the credential. Some personal financial advisors must also apply for a license, depending on the type of stocks, bonds, or insurance they sell. Depending on their field, financial advisors may need to register with state regulators or the U.S.l Securities and Exchange Commission.

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