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How To Become A Financial Advisor: A Guide

Nikki Dale
Nikki Dale April 19, 2023
how to become a financial advisor

What is a Financial Advisor?

A financial advisor is a finance professional that provides individuals and companies with advice on financial strategies like savings, pensions, investments, and insurance products.

Financial advisors can work with individuals to provide them with the guidance that they need to take control of their financial health and well-being. They can also help businesses to grow and make better financial decisions when it comes to investing in other businesses and products.

There are two main types of financial advisors. An Independent Financial Advisor is able to consider all types of investment opportunities to support their clients, offering unrestricted and unbiased advice.

A Restricted Financial Advisor is tied to a specific company or group of companies, and can only discuss their products when advising a customer. They are often employed by a particular company and are experts in these products or services.

Why do people work as financial advisors?

Being a financial advisor is a great role for people who enjoy working in finance and want to help others. It is a well-paid role that can be flexible and has many opportunities for career growth.

Key Roles and Responsibilities of a Financial Advisor

As a Financial Advisor, you will have different roles and responsibilities depending on where you work and who you work with.

Some of the usual day-to-day responsibilities might include:

  • Discussing and creating financial plans with clients
  • Working with clients and monitoring their financial activities and situations
  • Discussing financial services and products with clients
  • Producing reports
  • Researching regulations
  • Learning about different types of financial products
  • Selling financial products to clients
  • Making sales and purchases of financial products on a client's behalf
  • Discussing savings and retirement plans

The Financial Advisor Landscape

financial advisor

According to St. James's Place, the opportunities for financial advisors are growing. Many people are changing careers later in life to become a financial advisor, and the average age of someone in the industry is 57 - which means that the best and most experienced advisors will be retiring soon.

This means that there are a growing number of opportunities to work in the financial advisory sector, with about 50,000 new advisors needed to service the current demand in the workplace.

This market need is augmented with the prediction that the 'mass affluent' demographic (the sector of the population that has between £50,000 and £5,000,000 in investable assets) is set to grow from 11 million in 2021, to 13 million by 2024 according to Globedata.

Only 26.6% of people in the UK currently seek financial advice, but with the rising cost of living and other factors, this number is steadily growing and should be encouraged to grow even more. This is demonstrated by Ibisworld, which has noted that the market size of financial advice has grown faster than the wider Advisory and Financial Services sector in the UK.

Essential Skills and Qualifications for Financial Advisors

There are some essential skills and qualifications needed to be a successful financial advisor, and these are the things that recruiters will be looking for in applicants.

Some of the skills needed to be a finance advisor include:

  • Numeracy
  • Accounting knowledge
  • A grasp of economics
  • An understanding of financial markets and products
  • Interpersonal skills
  • Communication
  • Reliability
  • Accountability
  • Problem-solving
  • Attention to detail
  • Strong business management

In terms of qualifications, some routes are available to school leavers who have attained good grades in math and English, with apprenticeships available at some companies.

However, most financial advisors come into the position after completing a related degree, such as in accounting, business management, finance, or similar.

There are specific certifications available, which are recognized by the Financial Conduct Authority which oversees the work of financial advisors and other institutions to protect consumers. These can be studied independently, but often come as part of the training plan when you begin a career as a financial advisor.

Pathways to Becoming a Financial Advisor

Once you have completed a degree, many financial institutions will offer Graduate Opportunities, which are designed to give graduates specialized fast-track training to becoming a fully qualified financial advisor.

There are several Apprenticeship opportunities available, too. The most popular ones are the Financial Services Higher Apprenticeship and the Financial Services Professional Degree Apprenticeship, both of which require specific A-Level and GCSE results to qualify.

Some people might end up working towards becoming a financial advisor after an entry-level position in a financial institution. They may enter the workplace as an administrative assistant or as a bank teller, and take on learning opportunities to get the certifications that they need.

To become a financial advisor, you must register as an 'approved person' with the Financial Conduct Authority (FCA), which means that you are legally qualified to offer financial advice.

Approved persons must hold some sort of FCA-recognised professional certification, which includes:

  • Diploma in Regulated Financial Planning from the Chartered Insurance Institute
  • Diploma for Financial Advisors from the London Institute of Banking and Finance
  • Investment Advice Diploma from the Chartered Institute for Securities and Investment

Financial advisors also need to pass enhanced background checks with a focus on financial stability.

What does the career ladder for a financial advisor look like?

Once qualified, financial advisors can work with private individuals or companies, depending on the business that they are working with.

The typical career path for a financial advisor usually involves some sort of specialism, whether that be in pensions, specific types of investment, or working with high-net-worth clients.

Career choices can also include becoming a senior advisor, moving into management, or even becoming a director or a partner.

Many financial advisors choose to become self-employed, working on contracts with businesses and individuals to provide independent financial advice, meaning that they can choose their clients, working hours, and fees.

What are the average financial advisor's working hours?

The average financial advisor's working hours are Monday to Friday 9-5.

Self-employed financial advisors are able to choose their own hours and working patterns, so this can be more flexible, depending on whether they are working with businesses or private individuals.

What is the average salary for a financial advisor?

A trainee financial advisor can expect to get a salary between £22,000 and £30,000 a year, depending on location.

Qualified financial advisors can expect to get better £30,000 and £45,000.

Senior advisors usually get a salary of £60,000 or thereabouts.

For those working as wealth managers for high-net-worth individuals, the salary can be more than £100,000 a year.

What are the best companies to apply for financial advisors?

Financial advisors tend to work within financial institutions including banks and building societies, financial planning firms, independent financial advice companies, and investment firms.

Below are some of the top employers of financial advisors:

Nikki Dale April 19, 2023

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