An uncertain economy means people have more questions about how to secure their financial situation. But the job of a financial adviser does not rise or fall with economic trends. Alexander Washington, who has worked as a financial adviser in Philadelphia for 26 years, says his business is based around the philosophy that the more financial success his clients have, the more success he has. His goal is not so much to quickly turn around someone's dire financial situation as to form long-lasting professional relationships based on mutual success. "My relationships with clients are perpetual," Washington says. It has also become much easier for financial advisers to get started building those relationships. "Twenty years ago, without the Internet, I would have needed a lot more capital," says Eric Wikstrom, who left a job in corporate finance in 2006 to start Integrated Wealth Strategies LLC, which advises clients on retirement accounts.
One advantage of being an independent financial adviser rather than working for a company is flexibility. You have the freedom to set your own hours and work where you want. "Fifty percent of my meetings are at Starbucks," Wikstrom says. Web savvy can help you go far in this job: The successful entrepreneur "would not be someone who would open an office but somebody who opens a business in a particular niche and could serve people who are anywhere geographically," says Pamela Slim, author of the blog Escape from Cubicle Nation. A Web-focused financial services adviser would need to have strong writing skills in order to promote himself or herself through a blog and by submitting articles to other websites.
What does it pay?
According to the Bureau of Labor Statistics, the mean annual wage of financial advisers was $89,220 in May 2007.
What kind of background do you need?
What's the biggest secret of success that Washington has learned in his 26 years as a financial adviser? "You have to have a natural market. If you don't have a natural market, it's almost impossible to succeed." For example, Washington started out by making cold calls and asking people if they needed help with life insurance policies. The clients he generated that way told friends and family services about him and his services. He found himself in the middle of a community of people who needed him. "Ninety percent of my business is through referral," Washington says. Once you've found your financial service niche, you can let that market of clients beat down your door through referral. That's why a background of having worked for a financial services company goes really far: It lets you build expertise in a specific area, so you find your niche before you strike out on your own. "I realized long term that if I wanted to be known as an expert, I needed a narrow focus," Wikstrom says. So he used the knowledge he gained through jobs in accounting and corporate finance to focus on self-directed IRAs. He had done enough work in that area to get spots speaking at local conferences on retirement planning, and that got the ball rolling in attracting clients.
How do you get started?
The biggest cost to worry about at the beginning is licensing and certification. Wikstrom says that, at a minimum, one should be certified as a financial planner. In order to get certified by the Certified Financial Planner Board of Standards, you must have a bachelor's degree from an accredited college or university and pass a 10-hour examination on nearly 100 different topics related to finance. (For more information, see link below.) While he never bothered with certification, Washington agrees that being certified can be a boon for somebody starting out. Depending on your focus, a securities license or real estate license may be required. Exactly how to get these licenses varies from state to state but usually involves dozens of hours of classroom training. Next, your best way to find clients is through word of mouth, so you might need to ask friends and family to put your name out there and suggest possible clients. "You have to be in the middle of a cluster of people that need financial services," says Washington.