Financial Planning: A Goal-Oriented Career

Financial planning involves helping people plan their finances. Thanks, Captain Obvious. 

Actually, financial planning is about helping people achieve their financial goals. It can take many different forms and includes a multitude of specialist areas such as investment planning, insurance planning and estate planning.

Let’s find out more about what it involves and whether financial planning could be the right career choice for you.

Used Car Salesman Or Not?

Financial planners have a bit of a reputation as the used car salesmen of the accounting and finance world. This is mainly due to the fact that in many countries, people are able to call themselves a “financial planner” without having any skills or qualifications.

Many of these so-called financial planners use the term so as to project a professional image, but don’t have a background in accounting or finance, and provide advice to clients that has little if any credibility.

Then they appear on a current affairs show being pursued by a journalist quizzing them about why they lost their clients’ life savings by advising them to invest in some dodgy deal.

Although there are still these charlatans out there, the financial planning industry has come a long way to improve its reputation. 

Many countries’ financial planning associations have taken it upon themselves to implement some sort of self-regulation, including training and accreditation programs along the lines of what a CPA would go through.

Additionally, some countries such as Australia have legislated requirements around obtaining and maintaining a financial planning licence. Without being a licence holder or an authorized representative of a licence holder, you’re not able to provide financial advice to clients.

A Diverse Range Of Responsibilities

Financial planning involves

  • Assessing a client’s financial position

  • Setting a strategy around what their goals are, and

  • Implementing actions to achieve these goals. 

When you think about it, it simply follows the same methodology as most other planning process.

Some financial planners provide general advice about creating wealth or attaining financial stability, whereas others are more specialized.

Areas that covered include:

  • Investment advice
  • Retirement planning
  • Tax planning
  • Estate planning
  • Insurance planning and
  • Cash flow planning

As you can see from the above list, financial planning certainly covers some diverse areas. Consequently, the profession tends to attract people with a diverse range of skills and experience.

A common thread to the work most of financial planners is that they need to understand investment concepts very well; not necessarily as in which stocks to buy for example, but more along the lines of the types of investments to choose to enable a client to achieve their financial goals. 

Their responsibility is to assess a client’s situation, and provide them with a roadmap, taking into consideration factors such as the client’s tax situation, age, marital status, dependants and living expenses.

What About Certification?

Given the lack of a consistent framework throughout the financial planning industry, many industry bodies and associations have created their own designations, often using a trademark. 

This endeavours to demonstrate to potential users of financial planning services that the person holding the trademark has sufficient skills and experience to provide a competent level of service, and is ethically sound.

One of the oldest and most common financial planning trademarks in the USA is the Certified Financial Planner (CFP) designation.

Unlike some of the other more traditional accounting professions, there is no prerequisite career path that financial planners take, or qualification that they obtain. In fact, many financial planners are not accountants, but may come from backgrounds such as insurance or economics, and there are an increasing number of collegiate business schools that offer courses in financial planning.

In terms of skills, one of the most highly regarded skills in financial planning is the ability see the big picture, and take into consideration a number of options to solve a problem.

If clients could solve the problem themselves, they wouldn't need to see a financial planner; the result they want is to be guided on the right path towards their financial goals.

Make It A Positive Experience

“Have I got an investment for you!” is hopefully not the type of catchcry that is still common to the financial planning industry. When performed with due care and diligence, and by ethical operators, the profession serves a valuable purpose.

A career in financial planning can also be rewarding because by helping people achieve their goals, financial planners get to share in the success of their clients.

So if you’re looking for a career that offers a diverse range of experiences and products, plus offers the opportunity to help others, financial planning could be the right move for you.