Author’s note: I encourage you to share this information with your interns and junior team members, your students if you’re an adjunct professor, and your clients whose children are interested in exploring careers in the financial services industry.
Hooray, it was time to celebrate! I had just received an MBA and finally completed my formal education, which spanned 20 years. Boy, was I wrong.
In some ways, my professional education journey was just beginning. I soon learned that there was so much more that I wanted to learn and so many more exams to pass during my career as an investment analyst and portfolio manager.
I was recently reminded of this when I met with a young financial professional who interned with me about five years ago. I mentored him throughout his undergraduate and graduate studies, and our recent discussion focused on programs that might complement the CFP certification he is pursuing.
Like me, you may also want to increase your knowledge, elevate the level of service you provide to your clients, or advance your career — or help others do the same.
These goals may require you to complete advanced professional certification programs. But with more than 200 programs offered in the industry, according to Finra, how does one choose professional programs that are right for them? It depends on specific interests and goals.
Here are the two big questions to ask yourself — or individuals starting or contemplating careers in the financial services industry:
Question No. 1: In what sector of the financial services industry do you want to work?
If you’re mentoring or providing career information to individuals who don’t have a good grasp of the industry, start by noting that the two broad sectors are institutional and retail. Explain that institutional organizations develop, manage and offer investment products and services to manage the assets of institutional or retail clients.
Tell them that the institutional side of the financial industry includes banks, brokerage firms, credit unions, venture capitalists and fund management companies. Inform them that jobs at those firms range from securities analysts, traders and portfolio managers, to sales and client service positions.
A search of positions available at institutional firms suggests that sought-after employees hold advanced degrees such as MBAs or master’s or PhDs in finance or economics. In addition, employers tend to seek Chartered Financial Analysts (CFA®). Explain that this certification, considered by many to be the gold standard of certifications for investment professionals, is granted by the CFA Institute — and that it requires intense preparation.
To earn the CFA designation, successful candidates are likely to study for more than 300 hours for each of three rigorous examinations. Although I was fortunate to successfully complete the three exams consecutively, historical data indicates that only 10% of all candidates pass them in a row.
Explain that the retail side of the industry (which includes brokerage firms, banks, insurance companies, and investment and financial advisory firms) provide guidance to individual investors. Many of these employers seek candidates who have earned a Certified Financial Planner (CFP®) or Chartered Financial Consultant (ChFC®) certification.
These programs touch on several topics, including saving, investing, insurance, taxes and estate planning. Candidates in either of these programs are required to complete a series of courses and pass an examination that has had a pass rate of approximately 65%.
Question No. 2: Why do you want a complete a program?
Prior to enrolling in any certification program, you should identify your motivation to help you decide which programs meet your needs. For example, are you seeking certification and a program that will deepen your knowledge of a specific topic and complement existing expertise, or that will strengthen your resume to land your sought-after job? (“You” here and throughout the rest of this article could refer to those you are mentoring.)
Marketing professionals often advise businesses to select a specific group of clients to serve and become an expert in that area instead of trying to be a jack-of-all-trades and attempting to serve everyone.
Also explain that specialists in the financial services industry may choose to become experts in a variety of areas that include accounting, college funding, divorce, elder/senior care, insurance, investments, Medicare/Medicaid, portfolio/wealth management, retirement planning, Social Security, and special needs.
The goal of enrolling in one of those programs is to become an expert to elevate your service and differentiate yourself from other providers.
After choosing an area of interest, the next task is to identify a relatively high-quality certification program. For example, Finra lists more than 24 certifications for wealth and portfolio managers. Be sure the chosen program:
- Is offered by reputable organizations, such as the CFA Institute, the American Institute of Certified Public Accountants (AICPA) or The American College of Financial Services. Beware of sponsors who structure programs that require little or no experience and have unusually high pass rates.
- Will provide you with a deep understanding of the subject matter. A program should challenge you intellectually, increase your knowledge, and introduce you to new techniques and strategies.
- Is valued by the public and employers. For example, many programs offer to train financial advisors to become specialists in divorce issues. Before selecting one, speak with several divorce attorneys in your area to find out which certifications they value since those attorneys are likely to be part of your referral network for new business.
You might also choose a program that complements your existing expertise or your current practice. For example, the knowledge I gained while earning the CFA® and Retirement Income Certified Professional (RICP®) certifications were complementary and have allowed me to offer quality advice to clients throughout their lifetimes.
Specifically, the CFA program provided me with the background to help clients build wealth during their accumulation (working) stage and the RICP program provided me with skills to provide expert guidance during their decumulation (retirement) phase.
You might also consider earning a certification to strengthen your resume and to demonstrate to potential employers your commitment to the financial services industry. Programs including a master’s in business administration, CFP or ChFC are likely to provide you with a working knowledge of several areas of the financial service industry but may not provide the depth of knowledge needed to be an expert in any one of them. An additional program that focuses on one area of specialization may be an attractive complement to those programs.
Ethics and licensing
Many certification programs also require candidates to achieve educational and experience levels before they earn their professional designations. After that, successful candidates may also be expected to adhere to specific standards of ethical behavior and to complete continuing education coursework. In addition, employers may require you obtain financial securities licenses such as the Series 7 and 63, both administered by Finra, as a condition for full-time employment.
Many quality organizations offer a wide variety of programs aimed at providing general and specific knowledge applicable to the financial services profession. You can find a comprehensive list of those programs on the Finra website. In general, programs require large investments of time and money, so do your research before pursuing any certifications.
For those interested in pursuing a career in the institutional side of the financial services industry, the combination of a CFA and an MBA is likely to provide valuable skills. For the retail side, consider a CFP or ChFC and a program in an area in which you want to specialize. Together, those programs may provide you with a deep understanding of the area in which you intend to become an expert, as well as familiarity with several related topics. Being a well-rounded financial professional bodes well for your career and your clients.
Frank Smith, CFA, RICP, MBA, is fiercely proud of the personal and award-winning investment advisory services he provides to clients who are retired, near retirement or building their wealth. Frank draws on 45 years of quality experience working in banking, brokerage, insurance, and private investment advisory firms and has successfully completed examinations in CFA, RICP, MBA, Series 7, Series 63, Series 65 and CFP programs. Among his many accolades, Frank was named Best Investment Advisory Service Provider – Northeast USA, Five Star Wealth Manager, and Best Investment Firm in Bucks County.