Financial planning is the realm of financial advisers, financial planners and wealth managers. Essentially what they do is very similar, though professionals in this field often develop a specialist area of expertise such as mortgages. It’s all about establishing a strong relationship between themselves and the client by listening carefully to their individual circumstances and what they want to achieve with their money, and helping them to plan and manage their money accordingly.
This could mean making plans for the future such as how best to pay off a mortgage, organise inheritance, how to manage savings and organise a pension, risk management or advice on investments.
Who’s who in financial planning…and what do they do?
Specific titles will differ according to each employer in this area, but here’s are a few general pigeon holes for these guys:
- ‘Financial planners’ usually stick to work with businesses for the most part; though some may work with individuals. They provide advice and help set up a plan to meet their financial targets and manage risk. Typical employers are professional services firms that offer financial planning and advisory services as part of their portfolio, or banks.
- ‘Wealth managers’ and relationship managers specialise in advising the very rich (those HNWIs) and famous. This could include anything from estate planning and inheritance, to advice on how best to invest their money (different types of funds etc.) so that they can grow it even further. You’ll find these guys at exclusive wealth management firms, banks and independent financial advice (IFA) firms.
- ‘Financial advisers’ can carry out very similar tasks to financial planners, working with businesses. Financial planning services are also available to people at their bank branch where they have their personal account, (provided by financial advisers). Within a bank, specialist areas include things like mortgages or asset management. Some may focus on selling pension schemes.
Whatever the specialist area, or more generalist role, each client’s case is different and will involve meetings to determine client needs, discuss and conduct any changes to a plan, and provide feedback on financial plan progress – so lots of variety in financial planning roles is guaranteed!
Independent Financial Adviser (IFA)
Alternatively, you could become an independent financial adviser. As opposed to financial planners and advisers who work in-house in banks and focus on the products and services on offer to their clients from that bank only, IFAs provide advice on the whole range on potential options, products and services from numerous providers available, and suggest which may best fit their aims. These guys work for Independent Financial Advice firms. Some fly solo in their work and run their own businesses with their own client networks, but if you fancy this then you may have to earn your stripes in other financial services roles first and, importantly, gain the right professional qualifications (such as membership with the Institute of Financial Planning) before you can take on this career path. All financial planners and advisers need to be certified to practice!
What does it take to work in financial planning?
Financial planning requires cracking communication skills and the ability to build up and maintain rapport with clients, service providers and at times even other professionals such as solicitors or estate agents, accountants and fund managers, so this is definitely not a career for shrinking violets. Impeccable people skills at all times are key! These guys also have to be clued up on everything that’s out there on the market for their clients and be able to think quickly to adapt and amend a financial plan accordingly if and when necessary.
The majority of people get into financial planning with a degree as a trainee. It’s possible to develop a career in this area from any subject discipline, though a numerical subject such as economics, a finance subject or maths may be helpful and preferred by some employers.
If the glamour of rich clients and big pay packets in wealth management appeal to you then be warned: it’s extremely competitive to get into this area of the industry, so you’ll need to have at least a 2:1 degree classification and start picking up work experience from an early stage if this is your goal. Only the best applicants with make it to the top.
Financial planning isn’t completely closed off to school leavers though! If you start of in retail banking as a school leaver for instance, you can work your way steadily up the ladder to become an in-house financial adviser over time.
Not what you're looking for?
If you are looking for financial planning advice rather than information about how to become a financial planner and you're US based rather than from the UK then this article about how to manage your money might be what you're looking for.