Financial Advisor

Financial advisors are experts who help their clients make decisions about what to do with their money. They guide clients on setting money aside for retirement, saving for major purchases and investing for the future. They also advise clients on current economic and market activity.

How do you become a financial advisor?

Becoming a financial advisor can be a rewarding career choice. If you are considering becoming a financial advisor, this is what you need to know.

1. Obtain a bachelor's degree

If you plan to become a financial advisor, the first step is to obtain a bachelor's degree in finance or a related field. Some popular degrees for financial advisors include:

A. Accounting

Pursuing accounting can help you master concepts such as financial planning, auditing, and cost accounting. This major covers lessons such as financial statement auditing, payroll accounting, and business statistics.
 

B. Business

This degree can prepare you for a successful career in financial administration. It includes courses on business ethics, managerial finance, and principles of finance.
 

C. Economics

Pursuing this major allows you to learn about financial markets, business administration, and economic theory. The course typically covers lessons on statistics, macroeconomics, and econometrics.
 

D. Finance

This major can help you master concepts such as investments, securities, and financial management. You can take classes on investment portfolios, security valuation, and financial markets.
 

2. Register with the Securities and Exchange Board of India

As a financial advisor, before you buy or sell bonds, stocks, mutual funds, or insurance policies, you must register with the Securities and Exchange Board of India (SEBI). You can register as an individual, a corporate firm, or a partnership firm by obtaining the following certifications through the National Institute of Securities Market (NISM), an educational institute established by SEBI:

• NISM Series-X-A: Investment Advisor (Level 1)
• NISM Series-X-B: Investment Advisor (Level 2)

3. Pursue additional certifications

There are many additional certifications you can obtain depending on what financial products you aim to sell. Some of the most common certifications available are Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Chartered Alternative Investment Analyst (CAIA), and Financial Risk Manager (FRMN).

4. Apply for jobs

Once you have registered with SEBI and earned the required certifications, you can apply for an internship or a job with a financial organisation and gain experience selling various financial products, such as bonds, stocks, mutual funds, and insurance policies. During your job, you can work closely with senior advisors and learn about the company's standard operating procedures, network with clients, and understand how to develop high-performing investment portfolios.

Also read: Financial advisor careers

What do financial advisors do?

A financial advisor offers guidance to clients on how to manage their finances, from budgeting to tax savings, such as taking loans, purchasing real estate, and investing in retirement plans. Majority of a financial advisor's job involves assessing the client's income, developing a budget, and strategising where and how to invest the client's funds to effectively achieve their financial objectives.

How much does a financial advisor cost?

Financial advisors assess the financial conditions and goals of their clients and recommend investments that can assist them in achieving the set goals. Similar to every other service rendered, financial advisors also charge a fee for their services. The fees may differ based on how experienced and qualified a financial advisor is. The charges may also include the assets they manage. For instance, the higher the asset value, the higher the fees. Since financial planning is not a commodity, standardisation may, therefore, not be feasible. The fee of a financial advisor often depends on the criteria and the package of the financial planner, such as whether it is selective or comprehensive. It is advised to always analyse and compare the different charges for financial advisors to ensure the best service package.

If you are looking for a safe investment option, you can consider fixed deposit. They offer guaranteed returns and a fixed interest rate throughout your investment tenure.

Also read: Retirement financial planning

Conclusion

It is vital for any individual to plan their finances systematically and invest in various financial instruments. However, the structure of such instruments in the Indian financial market may seem complex. This is when it is wise to consult a financial advisor. Selecting a good financial advisor in India requires careful consideration of various factors, including their qualifications, registration status, fee structure, and approach to financial planning.

If you are looking to diversify your investments portfolio, Fixed Deposit (FD) can be a good choice. FDs provide a fixed interest rate throughout the investment period. Interest rate on FDs does not change with market fluctuations. NBFC’s like Bajaj Finance offers one of the highest rates of up to 8.85% p.a. on their Fixed Deposits.