What Does a Financial Advisor Do?

Written by Coursera Staff • Updated on

There are many paths to becoming a financial advisor. Discover the varied roles of these professionals who work to find the best way to achieve their clients’ financial goals.

[Featured image] A financial advisor in a wheelchair sits in front of a computer with a stack of financial reports in front of her.

A financial advisor is a professional who recommends products and strategies to achieve a client’s financial goals. Advice ranges from setting up client budgets to choosing investments and recommending tax-advantaged accounts for education or retirement savings.

Financial advisors typically work at investment firms, banks, and insurance companies, but independent financial advisors are self-employed in their advisory firms. If you like teaching others how to make better financial decisions, researching investment options, and building relationships, consider a career as a financial advisor.

What is a financial advisor?

There are many different types of financial advisors. Here are some common examples:

  • Asset manager

  • Certified financial planner (CFP)

  • Chartered financial consultant (ChFC)

  • Financial coach

  • Financial consultant

  • Financial planner

  • Investment advisor

  • Personal banker

  • Wealth advisor

Financial advisors with a designation like CFP or ChFC must complete the requirements to earn the title. This typically includes finishing an education programme, passing a test, and agreeing to follow guidelines that govern their practice.

What do financial advisors do?

A financial advisor helps clients decide how to manage their money. They assess their client’s economic health and determine their long- and short-term goals before making recommendations to meet them. 

Financial advisors help invest their clients’ money in the stock market and other investments, recommend products like life insurance, or offer assistance with tax planning. Financial advisors may also educate their clients about their financial health and habits that can help them build their wealth. 

In addition to working directly with clients, financial advisors spend time marketing their services. Many financial advisors may spend considerable time establishing and building client relationships.

Essential skills for financial advisors

A successful financial advisor requires more than an interest in finance and an aptitude for numbers. As a financial advisor, you should consider these workplace and job-specific skills.

  • Financial aptitude: Financial advisors should have a good understanding of financial products and a broader knowledge of how finance operates to make the best client decisions.

  • Customer-first mentality: Putting clients’ needs first is a hallmark of an excellent financial advisor. If you become a CFP (Certified Financial Planner) or CFA (Chartered Financial Analyst), you’ll be responsible for acting within a code of ethics.

  • Marketing yourself: Part of your job will likely include building client relationships and seeking new business. Maintaining contacts, building a social media presence, and creating a website for yourself will be helpful.

  • Presenting: You may present personalised plans for clients or speak to a group about financial products and how your services can benefit them. Good verbal and written communication skills will be necessary.

Why pursue a career as a financial advisor

If you like working with spreadsheets, calculating figures, and tracking investments, consider a career as a financial advisor. However, there’s more to this field than numbers. You also have an opportunity to help people navigate what can be an opaque industry to many. 

Financial advisor jobs offer plenty of variety, and you can choose a speciality that aligns with your interests and skill set. Some financial advisors specialise in areas like retirement planning or wealth management. Others work with a specific type of client—like teachers—and offer general financial advice. Others specialise in a product, such as life insurance.

Working as a financial advisor can be a rewarding experience. Not only do you help clients build and manage their wealth, but you also have an opportunity to improve their lives as you show them how to develop financial confidence. India Today reports that finance is one of the fastest-growing industries in India, and there is consequently a considerable demand for finance professionals  [1].

How to become a financial advisor

The path to becoming a financial advisor can vary depending on the work you eventually want to do. Here are a few options for getting started.

1. Consider a BBA, PGDM, or certificate. 

To become certified as a financial advisor, you must earn a certificate. Depending on your chosen programme, you will likely need to earn your Bachelor of Business Administration or a Post-Graduate Diploma in Management. Many financial advisors have a finance, economics, business, or accounting degree. To become a Certified Financial Planner, you must complete a CFP Board Registered Programme, a diploma or an accredited degree programme.

2. Get licensed.

While there isn't a specific licence for financial advisors, if you want to sell products like bonds, mutual funds, and securities, you need a licence from the Security and Exchange Board of India. This will make you a Registered Investment Advisor. You must demonstrate professional education or certification to become an RIA.

3. Self-study. 

You don’t necessarily need formal training to work as a financial coach who teaches people healthy financial habits (though it’ll undoubtedly build credibility). Learning the skills you need by taking online courses or reading books about the subject is possible. Here are a few to get you started:

Next steps

Build a foundation for a career as a financial advisor by earning certificates or your degree. Consider the Personal & Family Financial Planning course the University of Florida offers. Study online and at your own pace with options like the Bachelor of Science in General Business from the University of North Texas or the Online Master of Accounting (iMSA) from the University of Illinois.

Article sources

  1. India Today. "How is PGDM finance a great career move for youngsters in today's era?, https://www.indiatoday.in/education-today/jobs-and-careers/story/how-is-pgdm-finance-a-great-career-move-for-youngsters-in-today-s-era-2000911-2022-09-16." Accessed April 1, 2024.

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