Importance Of A Financial Advisor (And How to Become One)

Indeed Editorial Team

Updated 30 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A financial advisor provides guidance on how to manage one's finances, from current budgeting to future tax savings, such as the purchase of real estate, taking loans and investing in retirement plans. Most of a financial advisor's work involves analysing a client's income, developing a budget and strategising how and where to invest the client's funds to achieve various objectives. If you have an interest in finance, understanding the financial advisor role can help you decide if this career path is suitable for you.

In this article, we explain the importance of a financial advisor, outline the steps to become one, discuss their key skills and answer some frequently asked questions about this profession.

What Is A Financial Advisor?

A financial advisor is an expert who offers various financial services, including tax preparation, investment management and estate planning, to clients. Financial advisors are meticulous in establishing their recommendations on their client's requirements rather than the interests of a particular financial institution. The advisor's job includes assisting clients in comprehending the essentials for achieving long-term financial objectives.

Related: What Does A Financial Manager Do? (Roles And Skills)

Importance Of A Financial Advisor

The importance of a financial advisor in assisting their clients with financial management are:

Explaining finance

One of the key roles of a financial advisor is to assist clients in explaining their financial situations. They accomplish this by interacting with clients and gathering details about their income, expenses, assets and other financial information. This gives them a thorough understanding of the client's financial situation, allowing them to assist the client with their money.

Developing financial plans

Financial advisors are also accountable for developing financial plans to assist their clients in achieving their objectives. They develop these plans by analysing the financial information of their clients. Financial details are often exhaustive and they can include a variety of data, such as income, debt, investments and assets. The primary objective of such plans is to help clients reach their financial goals.

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Making recommendations on investment

Financial advisers also advocate financial strategies to their clients. This may involve recommending investments and assisting clients with portfolio building. These professionals customise their recommendations based on the client's age, risk appetite and other requirements.

Monitoring progress

Financial advisors are also responsible for monitoring their clients' progress toward their financial objectives. Often, they regularly meet with their client to discuss their finances and modify their financial plans as required. They may also assist clients with the process of buying and selling major assets.

How To Become A Financial Advisor?

Consider the following steps to begin your career as a financial advisor:

1. Pursue an education

To work as a financial advisor, most organisations require a bachelor's degree in finance or a related subject like economics or accounting. Based on the organisation and position, earning a master's degree may make it simpler to attract clients and apply for jobs in specific positions. If you are trying to decide which degree is best for you, review a few descriptions of the roles that interest you.

2. Earn certifications

Though most jobs for financial advisors do not require certification, it might be helpful when looking for work. Relevant certifications can boost employment opportunities and improve industry knowledge. Certifications may help you attract recruiters by demonstrating your commitment to the field. If you wish to offer investment advice to your client, you may pursue the investment adviser certification offered by the Securities and Exchange Board of India (SEBI).

3. Develop skills

It is often helpful to gain the abilities for the work, such as proficiency in math and basic computer operation, before applying for a job as a financial advisor. You can also focus on improving your soft skills such as empathy, problem-solving and presentation since the roles often require understanding the client's financial situation and advising them on various solutions.

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4. Acquire work experience

Getting an internship with a financial firm while still in college or working for a few years in your chosen area may be beneficial. You can also get a position as an associate advisor just after graduation. Internships or entry-level roles offer a great opportunity to gain practical knowledge.

5. Prepare a resume

Create a resume when you have the abilities and experience and are ready to apply for a financial advisor role. Try to make your resume straightforward and refined. Before drafting your resume, carefully review the job description to determine what the employer is seeking in a candidate. Create a resume that emphasises your experience and talents in conformity with the job description.

Related: Professional Resume Samples To Help You Land A Job

6. Apply for a job

You can search for financial advisor jobs on online job sites, company websites, professional networking sites and social media. Before applying for a job, read the financial advisor job description carefully and customise the cover letter and resume accordingly. Also, proofread them for spelling mistakes and grammatical errors to help ensure accuracy.

Related: Guide: Using Job Search

Skills For A Financial Advisor

Financial advisors use a variety of both hard and soft skills to perform their job responsibilities. Some common skills for financial advisors include:

Analytical thinking

A major part of financial advisor responsibilities involves tracking data and predicting future performances of various stocks, bonds and funds. Financial advisors require applying analytical thinking to understand their client's goals, analysing the client's current situation, their financial objective and the time they have remaining to get there. Such thinking abilities also help them develop suitable strategies to meet the objectives.

Related: How To Improve Analytical Skills (With Steps And Benefits)


Working one-on-one with clients and prospective clients is a significant aspect of the job. This requires excellent communication skills, as it is essential that financial advisors fully comprehend their clients' objectives. When financial advisers take part in workshops or conferences to attract new clients, public speaking is very helpful.

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Business development

Financial advisers with proficiency in business development can establish performance objectives and track their revenue figures. Advisors may collaborate closely with other organisation members, such as product suppliers and real estate brokers. They may also utilise business development abilities to present deals to management and negotiate prices.

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Wealth management

Financial advisors are competent at growing and preserving wealth, a competency they employ to advise clients on acquiring and managing funds. Wealth management is a facet of industry knowledge in which advisors are aware of the investments that have the potential to generate higher returns. They can also identify intelligent investments depending on the funds that their clients possess and the wealth they want to accumulate.


Empathy enables financial advisors to establish genuine relationships with their clients. The situation of a client's finances may be confidential and advisors require a vast amount of personal information. With a high level of emotional intelligence, advisors can personalise their advice to the client's needs and provide support.

Risk assessment

Before advising their clients, financial advisors require identifying and managing risks. Typically, risk assessment occurs during the research phase, when advisors foresee problems with clients and may confront them. Risks include a fluctuating market, which can affect the success of investments and job security risks can cause financial stress and may limit future income for the client.

Related: 10 Types Of Risks In Finance And Tips For Mitigating Impact

Frequently Asked Questions About Financial Advisors

Here are a few frequently asked questions about financial advisors:

What is the work environment of a financial advisor?

Financial advisors may work for companies or independently. They often work in large offices when working for financial institutions. Financial advisers who operate independently may get office space or work from home. Independent financial advisors may also travel to meet with clients at their homes, offices or other public locations. Mostly, financial advisers work full-time jobs, but they occasionally put in extra time to help clients or to manage their schedules. In some circumstances, working in the evening and on weekends may be necessary.

Depending on the kinds of customers they serve and their business models, financial advisors may get the chance to work and travel to various cities or nations. They can also take classes and workshops regarding financial counselling during or after regular business hours or they can go to business and networking events to attract more clients.

How does a financial advisor differ from a stockbroker?

Most of the time, stockbrokers and other financial experts only take and complete client orders. For instance, stockbrokers may help clients buy and sell stocks. Financial advisors may also offer those services, but the key distinction is that they also educate their customers on how or why particular choices impact their portfolios or financial well-being.

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How do financial advisors earn money?

Financial advisors often earn commissions on the total fund under management or fees for specific services. Most financial advisors are commission-based, so the quantity of assets they manage or the amount of securities they buy and sell for clients directly affects their income. When financial advisors work on a fee basis, they earn under a pre-established price arrangement with their clients, which is often a flat service-specific rate.

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