The Importance of Financial Advisors Investing in Themselves
What if I told you that, to be approved as an investment advisor and/or a financial planner, you just need to pass (with a 72% score or better, mind you) a 140-multiple choice test called the Series 65? And that the test deals primarily with laws and regulations? You’d think I’m lying right? Well, sadly, that’s how you become a registered investment advisor. I’ve heard stories of people who’ve studied just one weekend and have passed the Series 65 test because they basically memorized definitions. And this “knowledge,” along with submitting some paperwork, essentially gives them the green light to invest your hard-earned savings and make recommendations about how to best meet your financial goals. No wonder this industry gets such a bad rap: A bunch of “advisors” do the bare minimum to work in a very lucrative field.
Thankfully, there are quite a few of us that realized passing a single test is not nearly enough to earn the trust of the families we serve. We know that we must be competent in much more than rules and regulations. We must know a lot about investing in stocks, bonds, derivatives, real estate, alternatives and commodities to feel confident that our recommendations are truly in our clients’ best interest. We should have the skills to be able to see our clients’ comprehensive financial picture and understand how their income, expenses, taxes, assets, debt and goals are all interconnected and know what strategies will best help them achieve their goals. And, most importantly, we must be good listeners and help our clients realize how their financial behaviors, good or bad (we all have some of both), are helping or hindering the process of finding financial freedom.
You don’t learn all this from one cram session. You learn this through continued education and many years of experience. There are a lot of ways advisors can increase their competency, and they should. Industry credentials, especially reputable ones, are a great way to gain this competency. I can tell you that my professional journey has allowed me to earn some of the most trusted designations in financial advising. They enable me to do what I love most: helping people live their best lives by aligning their money to their values. Let me explain…
MBA: A two-year graduate degree from the top-ranked international business school in the world vastly improved my knowledge of everything business, management and finance. Taking courses in portfolio management, corporate finance, derivatives, investing, accounting, securities and financial modeling helped significantly bolster the skills I developed working in the financial services industry.
Chartered Financial Analyst: The CFA charter is the premier designation for those in the field of investment management. Besides passing three graduate-level exams (that have pass rates of 36%, 46%, and 43%) over a 3-year period, I had to acquire 4,000 hours of investment decision-making experience. I won’t go into the details of everything that I studied for the CFA, but if you’re really interested in knowing more, please reach out. I love to nerd out talking about this.
Certified Financial Planner®: The CFP program requires that you meet four requirements: education on all areas of financial planning, pass a 6-hour exam, 6,000 hours of professional experience and adhere to the highest ethics. Phew!
I’m not just tooting my own horn by telling you about my experience. Credentials are important for all financial advisors that have their clients’ best interests at heart. I'd love to work with you but if you decide to look around, make sure that whoever you consider has invested significantly in their competencies.
As if all these credentials weren't enough I felt that doing the best job for our clients required broadening the softer side of service and trust to complement all the technical knowledge. Stay tuned for our next post to learn more about this.
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