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Financial Planner vs. Financial Advisors

By: CareerFactsheet.com- Updated: Jun 21, 2017
Financial Planner vs Advisor

Financial Planners are required to have an expected level of education and certification in combination with work experience in order to function as such. In general, financial planners:

  • Require the CFP® (Certified Financial Planner) designation.
  • Hold a Bachelor’s degree as a minimum.
  • Have years of work experience in the financial arena.

Financial Advisor Requirements:

Financial Advisors have the ability to enter into the entry level path to become a Financial Planner, but will not have the same earning capability until they attain a CFP education. They have possibility to use relevant work experience while working in the position of a treasurer, an intern or as financial officer for a company and through this opportunity work their way up in an organization towards becoming a Financial Advisor. Once they function as a Financial Advisor their salary will increase, however will not equate to what a CFP Financial Planner earns In order to even be offered an entry level career path as mentioned above, it is expected that an individual already :

  • Has financial related work experience or the willingness to function as an intern or accept minor financial responsibilities within a firm.
  • CFP designation only if you are a fee-only NAPFA registered financial advisor. The CFP designation is otherwise voluntary.
  • Holds a Bachelor’s degree as a minimum.

Certification Options

Unfortunately either career choice, as a Financial Planner or Financial Advisor requires a Bachelor’s degree at a minimum. The reasoning behind this requirement is with that level of education the academic curriculum contains math, accounting or economics.

Financial Planners usually have the required three years of work experience and passed the challenging two-day CFP examination and have a Bachelor’s degree so there aren’t any other options or ways for them to circumvent this.

Financial Advisors are not legally required to be certified or pass an examination when working in the field; however there are courses available for certification. Most people who become Financial Advisors also have a Bachelor’s degree, need a little work experience in the financial field and are looking to make a mid-life career change. As Financial Advisors fortunate to work for a large well-known company, such as Meryl Lynch, Omaha Mutual, or Wells Fargo may sponsor CFP education or training.

The Certified Financial Planner Education Program takes around 15-24 months to complete. Financial planning courses can be taken during weeknights, weekends, online and via distance learning. Topics covered: financial planning involving insurance, investments, estate planning, retirement planning, risk management, taxation and financial management. Next, you will need to pass the two- day examination. Alongside with licensing/certification, this allows you to sell: annuities and mutual funds.

The day to day work functions as a Financial Planner and Financial Advisor are nearly seamless; both flourish better when a person has real life experience in budgeting, good communication skills and a network. Both career fields are entry points for a person to become self-employed over time if that’s their personal goal and therefore a network of clients can be essential.

Caution must be given to avoid any “Non-Compete and Restrictive Covenants” that may have been signed with employer before considering self-employment and using clients from a network. The salaries in both fields are incredible - Certified Financial Planners earn between $35,500- $139,350* per annum whilst the median salary for Financial Advisors comes in at $90,530**. Entry-level positions at advisory firms pay from $35,000 to $55,000 a year.

Certifications need to be renewed every two years, so if you decide to get certified keep re-certification in mind. Most people who receive paid-for training by their employer, mainly Financial Advisors, usually receive a basic salary, bonuses and/or commissions while they complete the required certification training Series 7 and 66 Licensing. In the third year they have the skills to work independently and begin to earn commission or bonuses that are handsomely increased.

For a young high school graduate who is focused on beginning a financial career in either choice can leap ahead of those switching careers mid-life by using some of the guidance above. For example, while attaining their Bachelor’s degree, consistently attempt to work in financial related fields or companies during internship or in entry level positions. In a quarter of the time they should be able to carve out a lucrative career as a Financial Planner.


* Salary Sources: Bureau of Labor Statistics, Occupational Employment and Wages, May 2016 Personal Financial Advisors.

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