The news is full of all sorts of gloomy financial reports. We are owing more and saving less, and our retirement may now be a giant question mark. While Congress is dealing with fiscal cliffs and sequesters, everyday Americans are facing financial crises of their own.
- The AIG Retirement Re-Set Study found less than half of pre-retirees believe they will be able to achieve their desired lifestyle in retirement.
- The Conference Board reports nearly two-thirds of 45-60 year olds plan to work longer as the value of their assets have dropped 20 percent or more.
- According to an Ohio State University study, Millennials could be piling up credit card debt until they're 70.
- The website HelloWallet discovered 25 percent of workers with 401(k) retirement accounts have used either some or all of their account funds for non-retirement needs.
Fortunately, personal financial advisors are available to help families inch away from the cliff and create a solid financial future. And in these difficult economic times, personal financial advisors could be one of the hottest jobs in the next decade.
Advisors help families manage funds and meet goals
It may seem only those with large incomes and numerous assets would need financial advising. However, the reality is that individuals of every income can benefit from working with a personal financial advisor.
In the past, retirements were largely funded by company pensions and Social Security, but private pensions are nearly extinct while the future of Social Security is uncertain. Today's workers need to be thinking about not only how to save for retirement but also how they can handle the mortgage and pay for major family expenses such as college.
"We keep kids in their homes. We keep kids in their schools," says Michael A. Masiello, President of Masiello Retirement Solutions. "We take care of that family unit."
Masiello has more than 23 years experience as a financial advisor and says the confusion and uncertainty dominating the economic climate today makes advisors an invaluable resource.
According to data from the Bureau of Labor Statistics (bls.gov, OOH), the public is apparently recognizing the value of financial advisors and may be seeking them out in greater numbers. From 2010 to 2020, jobs for personal financial advisors are expected to grow by 32 percent nationwide, much faster than average (bls.gov, OOH).
Working hard for the money
Salaries for future personal financial advisors could have a high ceiling if recent trends continue. The median annual pay for U.S. personal financial advisors in May 2011 was $66,580, but the highest-paid 10 percent earned at least $187,199. Meanwhile, the lowest-paid 10 percent earned up to $32,810 (bls.gov, OES). The government figures don't include the wages of self-employed advisors but could be similar.
"A successful financial advisor has the potential of making a phenomenal income," said Masiello, "but you have to do it for the right reasons."
Masiello says those reasons involve a genuine desire to help families rather than trying to make a quick buck by pushing unneeded products and services.
In addition, personal financial advisors like Masiello must work hard for the money they earn. He typically works from 5 a.m. to 5 p.m. each day. The first few hours are spent catching up on emails and other office work while the 9-to-5 hours are reserved largely for clients.
"I try to keep a solid 10 to 15 appointments a week," says Masiello.
Masiello says each appointment is generally planned around a three-hour period -- an hour for prep, an hour to meet with the client and an hour to complete follow-up work.
The road to becoming an advisor
"It is extremely brutal, hard work to build your practice," Masiello points out, "but it is one of the most rewarding careers you could have."
Personal financial advisors often have a bachelor's degree in finance, business, economics or a similar field. A degree may not be necessary for all advisor jobs but it is required for those seeking to be designated as a Certified Financial Planner or CFP (bls.gov, OOH).
According to the Financial Planning Association (fpanet.org), there are four steps to becoming a CFP:
- Completion of an educational course that has a curriculum registered with the Certified Financial Planner Board of Standards, Inc. Registered degree programs can be found through CFP Board .
- Successful passage of the CFP Certification Examination. The exam is a 10-hour test given over a two-day period.
- A minimum of three years work experience in financial planning prior to earning the CFP designation.
- Passage of an ethics review and an agreement to adhere to strict professional standards.
While certification is voluntary, there may be mandatory licenses for personal financial advisors wishing to buy or sell certain products. For example, before selling insurance, personal financial advisors must acquire a special state license (bls.gov, OOH).
Education is an important component of becoming a good financial planner, but it is equally important to have a strong sense of dedication to the career.
"You don't become a good, competent financial advisor overnight," says Masiello.
However, with the right level of commitment and the right motivations, students may find themselves ready to fill one of the hot jobs of the future and help individuals avoid life's many fiscal cliffs.
"What is a CFP Professional?" Financial Planning Association
"Find an Education Program," CFP Board
Personal Financial Advisors, Occupational Outlook Handbook (2012-2013 Edition), Bureau of Labor Statistics
Personal Financial Advisors, Occupational Employment Statistics (May 2011), Bureau of Labor Statistics