Eric Thayer, a Certified Financial Planner with more than 20 years’ experience providing comprehensive financial advisory services, discusses how to become a certified financial advisor. He offers tips for young professionals and recent college grads who have just completed their undergraduate degree and are entering the workforce.
How to become a certified financial advisor
#1 CFA® – Chartered Financial Analyst®
This is one of the best finance certifications programs you should pursue if you’re looking to master financial management and investment. Finance certifications alone are enough to catapult your career to the next level. It has three levels that you need to clear and you also need to have 4 years of full-time, relevant experience to get certified. The course is very rigorous and you need to study hard to clear it. The pass rate is lower than any other finance certifications – overall, the pass rate of CFA is less than 20%.
Career / Roles – For availing jobs in asset management, private equity, equity research, investment banking, you should do CFA finance certifications. If you want to make a career in the world of investment and if you have the option of only one finance certification, CFA would be the only one you should choose.
#2 CPA – Certified Public Accountant
If you love accounting (more than finance), this is a certification that is the best of the best. It is authorized by the AICPA (American Institute of Certified Public Accountant). This finance certification is specifically designed for accountants and tax consultants. CPA certification requires 150 hours of intensive study. And then you need to clear a tough exam. Along with that, you need to get a CPA license. The cost of the study is around $3000. And if you prepare well, you can clear the exam. The pass rate for the first time attempt has been around 50%.
Career / Roles – If you want a career in accounting, this finance certification program will definitely help. The only demerit of this finance certification is its narrow focus on corporate finance.
Recommended Readings for CPA Financial Certification
#3 FRM – Financial Risk Manager
If you want to become a risk analyst in an organization or want to make your mark in risk management, this is the ideal certification for you. You can also help clients that want to make prudent investment decisions. This certification doesn’t cost much – it costs around $1500 and you can complete FRM-I and FRM-II in a year (but it’s not that easy). FRM is administered by GARP (The Global Association of Risk Professionals). The pass rate of FRM is around 50%, but every year the percentage changes.
Career / Roles – FRM is one of the finance certifications programs that’s niche and only targets a specific market. The only con of this finance certification is that the subject material won’t be applicable for all kinds of finance professionals until they’re interested in risk analysis and management.
