How To Become a Financial Advisor (With FAQs)

By Indeed Editorial Team

Published 20 July 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you want to combine your love for numbers with a customer-facing role, a career as a financial advisor may be a good choice for you. This role involves helping clients create and meet their short and long-term financial goals. There are several steps to complete before becoming a financial advisor. In this article, we discuss everything you need to know about how to become a financial advisor, including the qualifications and skills required.

How to become a financial advisor

Primarily, a financial advisor, or financial planner, helps clients manage and invest their money smartly to achieve their financial goals. Most financial advisors also specialise in a particular area, like superannuation, tax, retirement or investments. Here is a step-by-step guide on how to become a financial advisor:

1. Follow FASEA's mandatory requirements

Your first step towards becoming a financial advisor is to become familiar with the Financial Adviser Standards and Ethics Authority (FASEA). The Federal Government established this organisation in 2017, under the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017. The body's principal responsibility is to set the education, training and ethical obligations for licensed financial advisors. According to the FASEA, these are the mandatory requirements to be a financial planner:

Earn a bachelor's degree

First, you can complete an approved bachelor's degree. There are several accredited degrees available, but the two most common options are a Bachelor of Commerce or Bachelor of Business, majoring in financial planning. The FASEA lists which electives you can complete for the degree to be approved. Depending on the degree, the coursework can include subjects on business law, financial planning, accounting, estate planning, ethics, taxation, retirement and auditing. Gaining this qualification takes between three and four years, depending on the degree and university.

Alternatively, there's also the option to complete an approved Graduate Diploma of Financial Planning or Master of Financial Planning at qualifying universities worldwide, depending on your knowledge and experience. The FASEA also has advice on eligible foreign qualifications.

Complete your Professional Year

Under the Corporations Act 2001, once you earn your Bachelor's degree, you must complete a Professional Year to become a qualified financial advisor. The Professional Year includes 1600 hours of full-time work and 100 hours of required training. However, it is broken down into quarters; quarter one includes client observation and supervisor support, quarter two focuses on supervised client engagement and preparing advice, and the remaining quarters involve indirect supervision.

Pass the FASEA exam

Before the third quarter of your Professional Year, you're required to pass this FASEA exam, which means you're officially qualified to provide personal financial advice to clients. The exam tests your knowledge of financial advice, regulations, and the FASEA Code of Ethics. The 3.5-hour exam is open book, and the FASEA publishes a framework, recommended reading list and practice questions to help participants prepare.

Follow the Continuing Professional Development Standard

All financial advisors must complete 40 hours of Continuing Professional Development annually and their licensee must approve 70% of the training. This is to ensure they maintain their professional knowledge and skills, and that they stay updated on relevant financial developments and regulations.

Comply with the Code of Ethics

The ultimate step in becoming a financial advisor is one you can follow your entire career. FASEA requires all financial advisors to comply with their Code of Ethics. This is a standard set of core values in the areas of client care, ethical behaviour, quality process and professional commitment.

2. Find employment

Now you're a qualified financial advisor, your next step is to find employment. You may decide to remain at the company where you completed your Professional Year or look elsewhere. Use Indeed's Job Search to find relevant open positions, but remember to check that the financial advisory company you're interviewing with holds an Australian Financial Services License (AFSL) from the Australian Securities and Investments Commission (ASIC). This is a legal industry requirement.

Guide: Using Indeed Job Search

3. Gain professional membership and certification

There are three principal organisations you can join, which offer different membership and certification options:

  • The Financial Planning Association of Australia (FPA): through FPA, you can earn specialist designations, gain new clients, network with other professionals and access updated resources. A further financial planner qualification to gain through FPA is Certified Financial Planner (CFP®) – the world's highest financial planning qualification, it can improve your career prospects and earning potential.

  • Association of Financial Advisors (AFA): AFA's core vision is to give financial advice professionals the environment they need to transform their clients' lives through quality and effective financial advice. They do this through collaboration with other professionals, advocacy, and training.

  • CPA Australia: this is one of the world's largest accounting bodies. Becoming a Certified Practising Accountant (CPA) is a mark of high professional competence and leads to more senior career prospects and earnings. The CPA program integrates education and practical experience, so participants gain an understanding of issues organisations face daily.

4. Register as a financial tax advisor

If you choose to specialise in taxation, you can register as a tax (financial) advisor with the Federal Government's Tax Practitioner's Board. To register, you can maintain professional indemnity insurance and meet the qualifications and experience requirements. To get started, you can provide Australian-issued documentation proving your identity such as a driver's licence or passport.

5. Maintain knowledge and accreditation

A primary requirement for financial planners is to stay updated on the latest industry issues, news, and regulatory developments. This ensures you continuously provide your clients with the best advice possible. Fortunately, it's easy to keep up-to-date on the latest trends when you're a member of one of the aforementioned professional organisations.

Related: Your Guide To Careers in Finance

What are a financial advisor's principal duties?

Here's what you can expect to do daily as a financial advisor:

  • Interview clients about their financial status and short and long-term goals.

  • Guide and educate your clients on how to effectively manage and invest their money, and then implement strategies to help them achieve their financial goals.

  • Monitor a client's financial situation, including investments, and revise the plan when required.

  • Recommend and organise insurance cover and tax strategies for clients to help them meet their financial goals.

  • Buy and sell stocks and bonds for clients.

  • Discuss financial options and make recommendations to clients concerning investments, superannuation and their retirement plans.

  • Manage tax and estate planning.

  • Offer financial advice to clients on major life developments, like marriage or having children.

FAQs about becoming a financial advisor

Here are answers to the most commonly asked questions regarding how to become a financial advisor:

What skills does a financial advisor need?

The top skills financial advisors need to perform their job effectively include:

  • Analytical skills: financial advisors use their analytical skills daily to assess their client's financial goals and decide on the best strategy to achieve them. Strong problem solving and math skills can also allow you to make the best financial decisions for your clients.

  • Communication skills: an important part of your role is dealing with clients, so proficient interpersonal and oral communication skills are essential.

  • Organisational skills: to handle multiple clients simultaneously, financial advisors can have excellent organisational and time management skills.

  • Attention to detail: having great attention to detail is essential, as making a minor mistake can be costly for your client.

Related: Interpersonal Skills: Definitions and Examples

What are a financial advisor's average salary and working conditions?

According to Indeed, the average salary for a financial advisor is $96,302 per year. The average salary can vary, depending on location, experience and organisation. Financial advisors typically work in offices in the finance, technology, and real estate industries. It's a career with strong future job prospects too. According to JobOutlook, the role grew from 47,000 people in 2014 to 51,800 in 2019.

Related: What Jobs Are in Demand in Australia

How long does it take to become a financial advisor?

You can officially be a financial advisor in four to five years. First, it takes between three and four years to complete a relevant Bachelor's degree, depending on the course and university. Then following graduation, you can complete the Professional Year, which is a one-year program through the FASEA.

What qualifications do you need to be a financial advisor?

The main qualification you need to be a financial advisor is a bachelor's degree. Depending on the university, this could be a Bachelor of Commerce or Bachelor of Business. There are several consecutive financial advisor requirements under the FASEA, which includes undertaking the Professional Year, passing an exam and continuing your professional development.

Is it hard to become a financial advisor?

There are several steps you can complete in order to become a financial advisor, so the role requires a great deal of hard work and determination to achieve. However, once you have the required qualifications and complete the FASEA's mandatory guidelines, you're officially a financial advisor. It's also easier to become a financial advisor if you have the right skills, including adept analytical and interpersonal skills.

Please note that none of the companies mentioned in this article are affiliated with Indeed. Salary figures reflect data listed on Indeed Salaries at the time of writing.

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