In the 1970s, financial planners essentially had two career choices: they could become stockbrokers or insurance agents. Their paths were set, and the expectations were simple. Much has changed since then. There are many more choices available, but this also means that students are expected to know more and do more than ever before in fierce competition. Preparing for a career in financial planning requires a great deal more training in areas that were traditionally relegated to other professions, such as accounting and psychology.
In this article we'll explore things that recent and soon-to-be graduates can do to decide where they want their financial planning career to go and to then get a leg-up on the competition.
Prepare Before You Graduate
In this article we'll explore things that recent and soon-to-be graduates can do to decide where they want their financial planning career to go and to then get a leg-up on the competition.
Prepare Before You Graduate
Perhaps the first and most obvious course of action is to simply choose an appropriate major. These include business, economics, finance or accounting. Personal financial-planning programs are being offered at more universities, both at the graduate and undergraduate levels. These programs can be especially helpful because they also often touch upon a number of topics that other programs fail to cover. These topics include consumer rights, the dynamics of finance within the family and the psychology of retirement.
Traditional financial-planning curricula will only cover material that is directly relevant to the Certified Financial Planner (CFP®) Board exam, such as investments, insurance and taxes. Therefore, choosing financial planning as a major will provide students with a much broader base of knowledge from which to begin their careers. Understanding the psychology of finance and investing will be an invaluable aid when dealing with clients, and is in fact a skill that all financial planners must master to some extent.
Extracurricular Activities
Of course, choosing the correct major is only one step that students can take to further their careers before graduation. There are a number of other options available to students that will look good on a resume to prospective employers. Here are some examples.
- Preparing Income Tax Returns - This is a good, practical skill that can greatly benefit the student in a number of ways. In addition to providing solid, hands-on experience with customers in the financial industry, it will also teach the student basic tax information that will be tested on the CFP® Board exam.
- Working at a Bank - Student planners often find that working at a bank provides multiple career benefits. It's a job that easily fits around an academic schedule. The pay is better than many other after-school jobs. It looks good on a resume, gives practical work experience and shows that you are a responsible person.
- Sitting for the Enrolled Agent Exam - This exam is administered by the IRS every September. The test covers virtually all of the tax material found in the CFP® Board exam. Passing this test and earning this designation will be an impressive credential to present to prospective employers in any field of financial practice. You'll also gain a tremendous advantage over CFP® applicants that have had no previous tax training.
- Internships - Working as an intern at a financial planning firm will provide obvious benefits for any student. However, while any internship can be beneficial, working at a smaller company will likely provide more hands-on experience with clients and the financial planning process than a larger firm, where interns are often relegated to administrative support or marketing roles.
Finding a Job
Graduates have a number of tools at their disposal that can greatly increase their exposure to the financial community. Obviously, a graduate who completed an internship at a local company has a substantial advantage over an unknown competitor in the job-selection process.
For those who do not have this luxury, the Internet can be an indispensable resource. Websites such as brokerhunter.com continually list all available postings from many companies. Those who prefer to take a face-to-face approach and network themselves (and even those who don't) would be wise to join the local chapter of a financial planning organization, such as the Financial Planning Association or the National Association of Insurance and Financial Advisors. These groups offer many resources to both rookie and veteran planners and are well worth the cost of membership. Their websites often contain job postings, too.
After Graduation
Knowing what job is the best fit for you can be a challenge. Here are some more items to consider when choosing your career path:
- There are a number of different business models being used in the financial planning industry today. Stockbrokers and insurance agents generally work on commission, while Registered Investment Advisors tend to charge either an hourly fee or a percentage of assets under management as compensation.
- The size of the company matters. Large companies will provide such amenities as office space, business cards and letterhead. However, larger companies may also have stiff production quotas, lower payouts on commissions and a highly regulated environment.
In turn, small financial companies offer a more relaxed atmosphere and a more comprehensive array of products and services. Working at a smaller firm can also provide a much broader range of experience for new representatives, who may have the freedom to implement a well-rounded financial plan for a client. This plan could include such things as mortgage planning and income tax preparation. It's doubtful you would have this kind of responsibility at a large company. - Training and support differ from company to company. Financial firms such as Smith Barney or Northwestern Mutual will provide their employees with all the necessary education and training that they need in order to pass the requisite tests, as well as thorough sales and product training. Many new advisors will benefit from the training programs offered by the large companies. Even if you ultimately lose out to the competition at a large firm, you will still have marketable skills that are attractive to small firms that can't provide the kind of training and licensing you've received.
- Finally, regulations from the Financial Industry Regulatory Authority require sponsorship by a broker/dealer in order to sit for any securities licensing exam.
The Bottom Line
College students have many things that they can do to improve their marketability before graduation. Once you're out in the real world, remember that the initial key to success in the financial planning business is persistence. Some graduates will find their place in the field immediately, while others may have to try a few different working environments to find the one that best suits them. Hard work and perseverance will always pay off for those who are willing to risk failure to achieve their dreams.
Read more: http://www.investopedia.com/articles/financialcareers/07/student-advice.asp#ixzz28JX7DuSu
No comments:
Post a Comment