What is the Best Degree for Financial Advisor Jobs?

An image of a financial advisor for our FAQ on What Is the Best Degree Path to Becoming a Financial Advisor

If you have strong math and analytical skills, a career in finance could be for you. A successful career of a personal financial advisor pays well. The field is expanding and allows great flexibility. In fact, one-fifth of financial professionals work for themselves.

But how can you achieve this profitable career path? The answer starts with the right college education. Read on to discover the best degrees for financial advisors and financial planners.

Education for Financial Advisors

There is no specific financial advisor college degree. But most hold a major in finance or something similar. A bachelor’s degree is a necessary qualification for investment advisors with limited professional experience. In fact, most employers look for graduates with four-year degrees from accredited institutions. But some look for those with a master’s degree.

There is no single degree for this career path. But some schools offer specialized financial advising degree programs. Also, finance is the best degree for financial advisor aspirants.

But why is finance considered the best financial advisor college major? First, finance is in the job title. It will provide great insight into the industry.

Second, finance is among the top 10 highest paying degrees in business. This major is both lucrative and recommended for aspiring financial advisors. But it is not your only option for becoming a financial advisor.

What Degree Does a Financial Advisor Need

A finance major is the most common degree to become a financial advisor. But there are other popular majors that are as beneficial.

Most employers ask for a bachelor’s degree from an accredited institution instead of a master’s degree. If your bachelor’s degree isn’t in finance, that is okay. If you major in a related discipline, you’ll still qualify for a financial advisor position.

Listed below are other popular majors for aspiring financial advisors and financial planners.

Bachelor’s Degree in Accounting

Accounting programs prepare aspiring financial advisors to practice accounting principles. It is also a related major to finance, so potential employers will appreciate it. Skills gained as an accounting major include:

  • Budget control
  • Cost accounting
  • Legal aspects of accounting
  • Taxation

Bachelor’s Degree in Business

A business administration major and finance concentration is a strong path for financial planners. Business majors gain a broad understanding of banking and economics. And a finance concentration provides insight into:

  • Investments
  • Other financial products
  • Stocks

These skills combined provide insider information you can give to your future clients as you work as a registered investment advisor.

Bachelor’s Degree in Communications

Communication is a field of study that you can tailor toward many degree paths, including a graduate degree. For aspiring financial advisors or financial planners, this major will help in two ways:

  • Business relations
  • Corporate communications

As a communication major, you will manage business relationships and personal interactions. Also, some communication programs offer a business administration or finance concentration. So, you can add a specialization in finance to complement your communications degree. This degree will help you become a financial advisor.

An image of a financial advisor for our FAQ on What Is the Best Degree Path to Becoming a Financial Advisor

Bachelor’s Degree in Economics

An economics degree will prepare you for a financial planner career. Economics covers macroeconomic and microeconomic concepts in fiscal policy. Economics majors are able to guide clients into business or financial markets.

As an econ major, you learn to analyze (and predict) human decision-making. You also learn how to make financial decisions. This is a crucial skill for financial advisors and financial managers. You will also gain an understanding of taxation, trade, and more. All this will strengthen the advice you give your clients.

Common economics degree courses include:

  • Applied Econometrics
  • Microeconomic Theory
  • Money management and Banking
  • Risk management

You may also choose to minor or specialize in finance. This will provide extra insight into your future career industry.

Bachelor’s Degree in Mathematics

A math degree is not the first choice for aspiring financial advisors and financial planners. But it serves as strong preparation if business or finance classes supplement it. Math majors graduate with a strong math acumen. They are comfortable working with numbers and analyzing data.

But you should take some finance courses before you graduate. These courses include:

  • Behavioral finance
  • Business valuation
  • Risk management

Bachelor’s Degree in Statistics

In a statistics program, you learn to gather, analyze, and interpret data. Statistics is a popular major for individuals wanting a career in:

  • Banking
  • Finance
  • Government
  • Risk management

It is like a math major as it will get you comfortable with numbers and analysis. It is also close to a finance major, so employers will appreciate it.

Unrelated Discipline

Majoring in an unrelated discipline is not recommended for aspiring investment advisors or financial managers. But it’s not a complete deal-breaker either if you don’t have a financial degree.

You should plan to take courses that will form a solid financial background if you plan to work in the financial services industry.

Courses to take in college to become a financial advisor

  • Estate and financial planning
  • Investments
  • Risk management
  • Securities and exchange commission
  • Taxation

Also, a general business administration course can help you toward your desired finance career. But again, this is not a recommended financial advisor degree path.

Beyond Finance Schooling

Licenses

Not everyone can call themselves a financial advisor or financial planner. Finance professionals must meet several licensing requirements to protect consumers. For example, an investment advisor or certified financial planner needs licenses. In some states, you will need many types of licenses to become a financial advisor.

These licenses allow financial advisors to work as a personal financial advisor or certified financial planner. They also allow a financial advisor to sell:

  • Bonds
  • Insurance
  • Stocks

Also, personal finance firms must register with one of two entities:

  • The Securities and Exchange Commission
  • State regulators (financial industry regulatory authority)

Certifications

To get personal financial planning licenses, you will need a certain level of professional experience. In most cases, certifications need three years of work experience to become a financial advisor. You will also need a certified financial planner credential or the following.

  • Continuing education classes
  • On the job training
  • Passing an examination
  • Specialized training or coursework

In rare cases, you might need a master’s degree or a finance degree.

The National Association of Personal Financial Advisors (NAPFA) recommends these certifications:

  • Certified Financial Planner credential (CFP)
  • Chartered Financial Analyst (CFA)
  • Chartered Financial Consultant (ChFC)
  • Personal Financial Specialist (PFS)

Certifications are not required for a financial advisor or financial planner. But they are great ways to:

  • Enhance your résumé
  • Improve your job prospects

Certification will set you apart from competitors. It will also broaden your job prospects and increase potential earnings as a financial planner.

An image of financial advisor and clients for our FAQ on What Is the Best Degree Path to Becoming a Financial Advisor

A Financial Advisor’s Role

Now that you’ve chosen your financial advisor major, let’s talk about your future role. Personal financial advisors are business professionals. They meet with people to understand their financial situations and help them with:

  • Insurance
  • Investments
  • Taxes

They often sell stocks and bonds while making the investments their clients chose. Investment advisors also help clients plan for retirement, offer tax advice, and sell insurance. Other common tasks performed by a personal financial advisor includes:

  • Discussing financial plans with clients
  • Educating clients about potential risks of investments
  • Monitoring client accounts
  • Recommending investments
  • Researching investment opportunities

Most financial advisors offer general advice and cover a broad range of topics. But some specialize in areas like retirement or risk financial management. Specialized expertise helps clients with needs in those specific areas. It will also set financial advisors apart from their competition.

How to Set Yourself Apart as a Financial Advisor

Now you’ve learned about your desired role, it’s time to discuss the future of financial planning. According to the Bureau of Labor Statistics (BLS), employment will grow 5% until 2030. This is slower than the average 8% for all occupations. But this growth should remain stable.

There will be around 21,500 openings for personal advisors over the next decade. Growth comes from the need to replace workers who retire or change management positions. But the main factor driving growth is the aging population.

Becoming a financial advisor for baby boomers

According to the BLS, baby boomers hire financial advisors in management positions as they approach retirement age. As this population continues to live longer, employment rates will increase.

Also, they will continue their shift from traditional pension plans to individual retirement plans. Companies will no longer provide employees with defined pension payments throughout retirement. Instead, individuals will save/invest for retirement on their own. So, the need for personal financial planners will rise with this gradual shift.

But the growth rate for employment remains below average. So, you must set yourself apart from the competition. But how?

You already know to choose the best degree for financial advisor aspirants. What else can you do? The answer is specialization.

Since job prospects remain limited, people with specialized knowledge have better opportunities. In-demand specializations for investment advice include:

  • Education
  • Financial planning
  • Insurance
  • Real estate
  • Retirement
  • Stocks
  • Taxes

You might also consider broad category specializations. They reach beyond the financial planning degree and offer the best opportunities. They will also display your unique abilities and core competencies. Listed below are three popular broad specializations for advisors.

Demographic Specialization

This specialization focuses on a specific demographic of people. Examples of potential demographics include:

  • High net-worth senior citizens
  • Emerging affluent families
  • Mid-sized, family-owned businesses

Product or Service Specialization

This specialization will set you apart from general financial advisors in the financial planning field. Examples of product/service specializations include:

  • Asset management
  • Income and financial planning for retirees
  • Tax planning

Life Event Specialization

Experts in handling financial challenges from life events are in demand. These life events might include:

  • Business failures
  • Divorce
  • Survivor planning

Pay for Financial Advisors

Familiarizing yourself with the available certified financial planner degrees was the first step. Now, you should learn how much money you would make as a financial advisor.

Personal financial advisors earn a median salary of $89,330 per year. According to the BLS, this is over twice the median salary for all jobs. The lowest 10% of earners in this profession make $44,100. The highest 10% of earners make more than $208,000 a year.

It’s important to consider bonuses on top of annual salaries. Advisors working for financial services firms receive steady bonuses throughout the year.

Industry Type

Despite the strong earning potentials for advisors, some factors impact wages. According to the BLS, where you work influences your salary. Here are four top-paying industries for financial advisors:

  • Securities, commodity contracts, and other financial investments: $97,020
  • Management of companies and enterprises: $88,780
  • Insurance carriers: $76,760
  • Credit intermediation and related services: $75,730

Self-employed financial advisors earn a percentage of their clients’ assets. So, the more money they make for their client, the higher the advisor’s wage.

An image of financial advisor and clients for our FAQ on What Is the Best Degree Path to Becoming a Financial Advisor

Self-employed planners may also charge fees for purchasing stocks or insurance. Another option is charging for one-on-one personal advising. They will also receive commissions for the products they sell.

Geographic Location for a Financial Advisor

Along with industry type, geographic location impacts earnings for financial advisors. The BLS lists five top-paying areas for personal advisors. This list is according to the BLS’ Occupational Employment and Wage Statistics data.

In these states, the average wages for advisors fall above the general wage of $89,330. Some of these states boast wages close to 40-50% higher than the average. High-paying states include:

  • New York: $169,310
  • Maine: $155,240
  • Montana: $154,630
  • Minnesota: $153,830
  • Massachusetts: $151,390

Other metropolitan areas pay higher wages for financial advisors. The BLS reports that Gainesville, Florida offers a mean wage of $206,210 for this occupation. This is $116,880 more than the average for personal financial advisors. Other high-paying metro areas include:

  • New York, Newark, Jersey City (New York/New Jersey): $169,850
  • Tyler (Texas): $169,690
  • Norwich, New London, Westerly (Connecticut): $167,370
  • Santa Maria, Santa Barbara (California): $165,570
  • Eugene (Oregon): $165,070

In some metro areas, the cost of living reduces the seen income for advisors. So, it’s important not to ignore non-metropolitan areas as options. The BLS reports that some non-metro areas pay above-average wages. With a lower cost of living, the money you earn stretches farther.

High-paying non-metro areas

  • Eastern Wyoming: $189,700
  • Southwest Montana: $168,480
  • Massachusetts: $159,820
  • West Central and Southwest New Hampshire: $159,540

The Next Step: Becoming a Financial Advisor

A career as a financial advisor or financial planner is rewarding and profitable. Every day you will help people achieve their long-term goals. These goals include helping families plan for retirement and afford college fees.

The personal part of advising will provide both fulfillment and steady income. Also, the job is not limited to a specific location, so you maintain freedom when you become a financial advisor.

You could also choose to go independent and become your own boss. This might include starting your own firm or becoming self-employed. As a self-employed advisor, you gain clients as an independent entity. But without a firm as support, you will need certifications for credibility.

The options vary and depend on what suits your interests. But remember, your first step to becoming a financial advisor is choosing that perfect college major.

There are many financial degree options, and all can lead to success in the business. Research is key. Browsing the internet. Attending job fairs. Talking to college counselors, professionals, and upperclassmen. They will provide insight into the financial advising industry and on the job training. They will also help you become a financial advisor.

But in the end, it’s up to you to choose your perfect educational path while becoming a financial advisor. After that, all you need to do is follow it.

BDP Staff
June 2022

Related:

This concludes our article on the best degree path to becoming a financial advisor.

Brenda Rufener
Author

Julie McCaulley
Expert

Carrie Sealey-Morris
Editor-in-Chief