According to the U.S. Bureau of Labor Statistics, the demand for financial advisors will grow much faster than normal. In fact, the optimistic forecast is a 32% increase in clientele requesting the services of financial advisors by the year 2020. These conclusions are based in large part on the generation of baby boomers reaching retirement age.
It is not a matter of replacing the positions left behind with retirement, but the anxiety of retirees to place their retirement pay, savings, social security checks and/or pensions into a fund that will generate a percentage of interest to balance the rising costs of living.
The Market Crash and the Consequences We Face
Those near retirement age or who are preparing to retire in the near future are highly conscious of the 2008 market crash that deflated their savings accounts and left a stinging defeat for their IRA investments. They’ve watched their pension plans go down the tube, and the real estate market crumble. They now face difficult financial and insurance decisions.
However, the market crash brought another serious drawback. The public has developed a distrust of finance professionals in general, with stinging reports of mutual funds that went sour, over-priced insurance plans that did not adequately cover their needs and commissions that took a better part of their potential profits. Some feel that financial advisors are little more than glorified salespeople, who are not truly interested in the well-being of their clients at all, but in selling their company’s products.
In a very real way, financial planning is a sales job. One out of every four financial advisors is self-employed. Financial advisors must establish trust among their clients and demonstrate a high level of financial expertise. Even those working for firms or institutions are often expected to find their own clientele.
Hiring requisites often favor those who have a background in customer service or sales. Financial advisors need to feel empathy for their clients, listen closely to their clients and be responsive to their needs.
As some industries, such as banking and insurance, will often train financial planners themselves, there is a misconception among the public that anyone can work within this job capacity. In actuality, most industries require at least a Bachelor’s degree in economics, finance or business. Successful financial planners become certified and join a professional association such as the Financial Planning Association or National Association of Personal Financial Advisors.
Despite Skepticism, Outlook Remains Positive
There are many new start-up businesses, and with their emergence, a rising need for sound investment plans, employee insurance and benefits, and personal budget management. Real estate has slowly regained its footing, with young to middle-aged families contemplating housing and nest egg holders interested in reinvesting in rental units and apartment complexes.
For those who are considering a career as a financial advisor, any initial job with a firm or institution is a good one. It will give you a chance to gain experience and develop a portfolio. While software applications have paved the way for self-planning, there are many who are still nervous about investing in a volatile market without an advisor. Their confidence will increase if you can demonstrate the success of your guidance.
Financial advisors are paid an hourly wage, a salary or a commission depending on the policies of the firm or institution. Commission based averages around ten thousand dollars for every one million dollars, in assets a financial advisor handles. The average salary is around $65,000 a year.
The downside is gaining the trust and confidence of the public that has been jaded. The positive side is a job that will continue to be in demand and the potential to become your own business.