Working as a financial advisor can bring a number of personal rewards. You get to help people find ways to create a strong financial foundation. You can work within a career field that can actually make a difference in today’s world. There are also certain disadvantages that must be considered with this career option, as there are with most careers. Here is a look at the pros and cons of being a financial advisor.
What Are the Pros of Being a Financial Advisor?
1. You don’t have to work for a firm.
Financial advisors can be successful working for a private or public firm. They can also be successful working all on their own. It is possible to be self-employed in this career and some even choose to work from home. This ability allows someone to create working hours that fit best with their lifestyle and household demands so that a balance between personal and professional responsibilities can be effectively achieved.
2. You get to provide meaningful advice.
The foundation of meaningful advice is experience and wisdom. Your passion for money, investing, and saving can help others achieve their own financial goals. Many people need a better understanding of their finances, but don’t know what to do beyond trying to save a little back out of every paycheck. Your advice can help people begin to build a real net worth.
3. You really can earn what you’re worth.
There is an unlimited earning potential in working as a financial advisor. You may need to develop a client base from scratch and spend some money on marketing your firm or individual brand, but over time your hard work, reputation, and brand awareness can help you earn what you’re worth. There really is no ceiling. You can keep going as high as you want to go.
4. The cost to start-up a financial advising business are relatively low.
Outside of your licensing requirements and the other business and regulatory costs, there are very few expensive fees that are associated with this career field. Many financial advisors can manage their costs to be about $300 per month, especially if they are working out of a home office. This makes it very manageable to start working part-time if necessary to build up a client base.
5. There are plenty of opportunities to develop a niche expertise.
When people so connected to one another in the world today, it becomes necessary to have a niche expertise that clients can rely upon for their financial needs. There is a huge number of different products and strategies that are available in this career field. This allows you the opportunity to craft a niche career that can help to set you apart from the other financial advisors in your area and naturally attract a certain client base.
6. Affiliation credentials are easy to obtain and provide credibility to your career.
The internet might make some tasks harder for the financial advisor, but it does make it easier to obtain certification credentials. Let’s face it: when there are initials after a person’s name, it tends to create a more impressive presentation. The actual initials don’t matter, so virtually any field-related long-distance certification program will work. Prices generally begin around the $1,000 mark.
What Are the Cons of Being a Financial Advisor?
1. It is a career that involves a lot of stress.
You’ve got to be really good with numbers and switching from client to client in this career field. You’re not going to be able to earn full-time money by advising only one client per day. This means you’ve got to be familiar with the financials of every client and be ready to provide advice at any time. To avoid this situation, it is important to take enough time between clients to make sure the mind’s focus can transition properly.
2. It requires a lot of willpower.
This is especially true when a financial advisor is self-employed and working from home. There are a lot of temptations that come a person’s way in a home-based business. A big game might be on the TV. There are social media distractions. Maybe you’ll want to run down to the store to pick up a coffee. Work has to come first sometimes and not everyone is good at making this transition.
3. There are specific requirements that must be met.
In order to become a financial advisor, every jurisdiction requires certain certifications and licensing to provide professional services. This may require an individual to have a specific college degree, have experience in the financial markets, and other requirements. The journey toward this career can sometimes be years in the making, which for some makes it a difficult path to navigate.
4. You’ve got to be sponsored.
In most jurisdictions, before you can begin working on your own as a financial advisor, you’ve got to be licensed in order to provide this service. Most licenses can only be obtained when a sponsorship from a brokerage firm is received. Since the average firm isn’t just going to sponsor anyone, the typical career path for the financial advisor is to find work at a company, work their for a predetermined amount of time, get the license, and then strike out on one’s own after the contract has been resolved.
5. It can be difficult to find clients.
With the number of financial tools that are available on the internet today, many people feel like they can manage their finances on their own. This makes it difficult to acquire a client base, even with effective marketing, because many feel like they can save money by doing things on their own. Financial advisors need to be prepared to repeat their marketing efforts multiple times, especially when first getting started, to secure the needed client base.
6. It takes a lot of working hours to get started.
It isn’t uncommon for beginning financial advisors to be putting in work weeks that are 50+ hours consistently. Some weeks will pay better than others. There can be a lot of uncertainty in the first 5 years that can be difficult to accept if there isn’t supportive income from another source. With a strong enough work ethic and a level of confidence that some may see as arrogance, however, it is very possible to create a long-term career on your own in this field.
The pros and cons of being a financial advisor prove that this career option isn’t for everyone. You’ve got to enjoy numbers, investing, and interacting with people on a regular basis. Evaluate these pros and cons today and you’ll be able to make an empowered decision as to whether or not this career option is right for you.