In order to become a financial advisor, a bachelor’s degree is usually required; however, employers typically do not require a specific course of study (though it’d be wise to consider degrees and courses related to finance). Once you’ve secured employment with an advisory firm, expect more than a year of on-the-job training under the supervision of a senior advisor. Additionally, depending on the services being offered, an advisor may need a combination of different licenses, which requires registering with state regulators, the U.S. Securities and Exchange Commission (SEC), and/or state boards.

While career paths will vary based on what kind of service is being provided, there are essentially five stages in the typical financial advisor career path. Most people starting at advisor firms (without any prior experience) will be hired as analysts responsible for gathering, maintaining, and inputting client data, followed by a promotion to associate advisor, which means being in charge of drafting financial plans, performing asset allocation analysis for clients/portfolio, supervising analysts, etc. The remaining stages are service advisor (i.e., those who implement financial plans and supervise both analysts and associate advisors), lead advisor or managing director (i.e., working directly with clients and supervising service advisors during implementation of financial plans), and principal or partner (i.e., managing the largest/most complex client relationships and supervising one or more team(s) of advisors).

There are essentially two ways a financial advisor can be paid: through a commission-based model and/or through a fee-based model. With the former model, advisors receive compensation for selling specific financial products to a client, which can result in a conflict of interest. When an advisor charges a fee, the client pays them directly (either hourly, as a retainer, as a percentage of assets (AUM), or as a flat fee) for advice, plan implementation, and for the ongoing management of assets.

Despite the availability of automated robo-advisors, human financial advisors are still very much in high demand given their capability to offer more complex and specialized investment advice. However, personal financial advising isn’t the most popular career in the world of finance, with the U.S. Bureau of Labor Statistics (BLS) projecting the field to grow only 5% from 2020 to 2030. Although 21,500 openings for personal financial advisors are projected each year, on average, during this same period, the bulk of these openings are expected to result from the need to replace workers who change occupations or leave the labor force (e.g., retire, etc.).