Working within small businesses or large organisations such as banks, giving clients specialist advice on how to manage their money. Qualification level 4. Equivalent to higher national certificate (HNC).
Do you want to deliver the sophisticated investment advice, services and solutions today's investors need? Certified Investment Management Analyst® (CIMA®) certification is the highest level of investment education client-facing advisors can get.
While financial advisors can provide advice on a range of financial matters – such as budgeting, retirement planning and investment choices – wealth managers typically focus on more affluent clients and may offer services like estate planning, tax optimization and legacy planning.
Certified Financial Planner (CFP)
While financial planners have much in common with financial advisors, achieving the distinction of Certified Financial Planner is perhaps the clearest way to demonstrate proficiency in the sector, with 90% of consumers considering their advisor's qualifications as important.
In our professional experience, achieving an annual income of $300,000 is a realistic target for financial advisors, particularly when leveraging a combination of fee structures, effective AUM growth strategies, and commission-based earnings.
In addition, millionaires are much more likely to work with a financial advisor (69%), more than double the amount of the general population (33%).
If you're making big decisions that may affect your financial security, a fiduciary advisor might be a better fit because they're required to give you unbiased advice and act in your best interest.
If you're an entrepreneur or business owner, hiring a CPA might be a good move depending on the size and complexity of the operation. If you are looking for financial planning that goes beyond taxes and accounting, then you should consider a CFP® professional.
On average, financial advisors charge between 0.59% and 1.18% of assets under management for their asset management. At 1%, an advisor's fee is well within the industry average. Whether that fee is too much or just right depends entirely on what you think of the advisor's services and performance.
Chartered Financial Analyst (CFA)
The CFA designation is reputed to be the most difficult certification to obtain, which works to the benefit of those who succeed. The focus of the program is on investment analysis and portfolio management.
Achieving a seven-figure income as a financial advisor is possible but not typical. Adhering to industry regulations and ethics is crucial while striving for high income.
Very generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could also be higher, such as $500,000, $1 million or even more.
The "Big 4" refers to the four largest accounting firms and includes Deloitte, PwC, KPMG, and EY. All four companies provide audit, assurance, consulting, financial advisory, risk management, and tax compliance services. Deloitte. "Deloitte Ranked 6th on World's Best Workplaces 2023."
Similar in scope to a paralegal at a law firm, the function of a paraplanner was created to allow financial planners to focus on working closely with clients and identifying their investment needs. Paraplanning includes analyzing clients' needs and researching and recommending suitable products aligned to those needs.
While both offer guidance on investments, taxes and other financial matters, financial advisors generally focus on managing an individual's investment portfolios, while financial planners take a look at the entire financial picture and an individual's long-term goals.
Assets Under Management (AUM)
This is one of the most common fiduciary fee structures. AUM fees are based on a percentage of the overall capital your fiduciary manages. For example, a fiduciary charging 1% AUM on $1,000,000 managed would cost $10,000 annually.
Hourly rates for financial advisors typically range from $200 to $400 per hour.
Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank. Other millionaires have safe deposit boxes full of cash denominated in many different currencies.
Financial service providers regard a HNW client as someone with at least $1 million in liquid – or investable – financial assets. Clients with assets between $5 and $30 million are considered VHNW, while UHNW clients have assets greater than $30 million.
According to the U.S. Bureau of Labor Statistics, the median annual wage for personal financial advisors was $94,170 in May 2021. It means half of the financial advisors earned more than that, and half earned less. One in ten earned less than $47,570, while one in ten made more than $208,000.
Advisors at wirehouses typically earn a base salary plus bonuses based on assets under management (AUM) growth and sales goals. Total pay packages generally range from $100k for junior advisors up to $300-500k for senior advisors managing over $100 million in AUM.
While a 1% annual fee may seem like a small price to pay for professional investment guidance and financial planning, it can significantly erode portfolio returns over long time horizons. Even seemingly minor differences in fees add up in a big way when compounded year after year for decades.
Financial Advisors made a median salary of $99,580 in 2023. The best-paid 25% made $169,910 that year, while the lowest-paid 25% made $65,320.