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The Future is Unlimited: Career Paths You Can Take as a CFP® Professional

The Future is Unlimited

The value behind CFP® certification extends far beyond the credibility that the CFP® mark conveys. The unique skill set and personal network CFP® professionals earn while pursuing CFP® certification establishes a critical foundation to build a successful career in this growing field. The U.S. Department of Labor Occupational Outlook Handbook predicts 7 percent job growth in the financial advising field through 2028, significantly faster than the average 4 percent growth across all occupations.

The Benefits of Defining a Career Path

If you are a current or prospective CFP® professional, an understanding of the advisory career path is critical to charting the professional development you can expect to gain as a financial advisor. It can also help you evaluate the different types of positions within the financial planner career ladder so that you can decide where your interests and expertise best fit in the field.

An Overview of the Advisory Career Ladder

While career paths are firm-specific, a standardized approach to career progression is becoming more common. Research from the CFP Board Center for Financial Planning has found a common five-step progression in the advisory career within leading financial planning firms, as indicated below. Each step has a specific set of responsibilities, degrees, designations and required skills.

  • Analyst: An entry-level position supporting the firm’s strategy with data maintenance and financial plan preparation.
  • Associate Advisor: A technical position that focuses on supporting the firm’s leading professionals through the development of financial plans and analysis.
  • Service Advisor: A client-facing position focused on communicating with clients to respond to their needs.
  • Lead Advisor/Managing Director: At this stage in their careers, financial advisors focus on providing strategic advice to clients as they make important financial planning decisions. The Lead Advisor/Managing Director also has internal management responsibilities.
  • Principal/Partner: These are the firm leaders. Principals/Partners manage a large team of advisors, while contributing to the growth of the firm through servicing the most complex and largest client relationships.

Factors influencing promotion decisions progress from an Analyst’s ability to demonstrate a mastery of the firm’s approach, software and presentation style to a Lead Advisor’s ability to develop new business and earn the trust and respect of clients.

What to Expect: Compensation Methods

Employers in financial planning develop compensation philosophies based on the firm’s business strategy. If a firm relies on business development efforts to attract new clients, it tends to employ salary-based compensation, where advisory pay is fixed and guaranteed. Alternatively, a firm may employ a variable-based compensation approach—where advisors are paid a percentage of the revenue they generate—if it relies on the efforts of advisors to attract new clients.

Selecting Your Speciality

There are many types of financial advisors, which are not mutually exclusive, ready to service different client needs. Deciding which specialty to pursue depends on your interests and qualifications.

  • Financial Planners give strategic advice to clients on their finances.
  • Accountants counsel clients through the preparation and submission of tax returns to the Internal Revenue Service (IRS).
  • Certain attorneys support financial planners with estate and tax planning expertise. Attorneys may also be called upon to provide advice directly to or prepare legal documents for clients.
  • Estate Planners provide clients with specific advice on tax and asset management concerns.
  • Insurance Agents are state-licensed individuals who sell or give advice on life, health, property and/or casualty insurance products.
  • Investment Advisers must register with the Securities and Exchange Commission (SEC) to provide securities advice to clients.
  • Brokers buy and sell securities products, such as stocks, bonds and mutual funds. They must register with a company member of the Financial Industry Regulatory Authority (FINRA) and pass FINRA-administered securities exams.

Additional Resources

The CFP Board Center for Financial Planning’s Financial Planning Career Paths: Building More Sustainable and Successful Businesses is a comprehensive guide that current and aspiring financial planners can use as a roadmap for navigating the multifaceted career of a financial planner. The guide provides information on what to expect through each step of the career ladder, direction for self-development efforts, and a step-by-step progression of skill development that ensures the right skills are learned at the right time.

CFP Board compiled a summary of the InvestmentNews Adviser Compensation & Staffing Survey conducted by InvestmentNews in 2017. The summary is available on the CFP Board Career Center website as a resource for job seekers.