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Guide To A Career Change To The Financial Planning Industry

The Covid-19 pandemic has led many workers to question their quality of life in their current employment, wondering if there are any options out there that could be better. For some of those who chose to leave their employment, it meant having to search for employment in a similar field elsewhere, hopefully, one that offers better remunerations or more flexible hours. But for others, it meant switching careers entirely.

Although having a career change can come with possible risks (time spent looking and training for a new position or even possibly lower income due to having to take entry-level positions), a full career switch to a job that better aligns with your interests and goals can pay off tremendously in the long-run.

Fortunately, in the world of financial advice, there are quite a few ways of entry for career changers. Whether it be taking on a support role at an established firm or even starting your own business from the get-go, you will still need to consider exactly the kinds of work and career path you will ultimately want to go after.

This is important because different career tracks come with different education and certification requirements (plus their associated time and financial costs), meaning that your initial decision will have an influence on your path as you pursue your first job in this field.

It is also important to note that while experienced advisors, on average, generally do earn high incomes, your first job in financial planning might actually result in lower pay compared to your current position.
With all things considered, it is crucial for you to create a realistic and sensible plan based on your circumstances to achieve a smooth transition into a career in financial advice.

Choosing The Right Career Path In The Financial Advice Industry

A sizable amount of work experience, even if it is not in financial advice, can give you an advantage over fresh graduates with relevant academic training but no work experience when trying to enter the financial advice industry. With your previous work experience, you are more likely equipped with skills that you have developed from your previous career which can be effectively translated into a career in financial advice.

Take this, for example, a person who has experience in sales from their previous sales position would most likely have skills that would aid in relationship-building and business development. These kinds of skills are hard to learn in a classroom setting and can only be cultivated through years of hands-on development. Being proficient with Microsoft Excel or other software tools can be advantageous to an advisor as well. These already existing skills that you can bring to the table as a candidate will make you a more attractive potential employee as you will not need additional training in these areas.

Additionally, being aware of your existing abilities and interests can make choosing your financial advising job easier. Different career paths will have a range of daily duties that might need different skills.

Client-Facing Advisor Options

The majority of people who choose to switch careers to financial planning do so because they enjoy working directly with clients. Maybe you already have an interest in personal finance and casually advise your friends and family on the topic, or you had previously worked with clients on related matters and now want to utilize your communication skills in a different industry.

For people who enjoy communicating with clients, your potential career paths could be working at a larger firm where the firm itself procures clients for the advisors to serve (you’ll have little involvement with business-development responsibilities) or a position where you as an advisor will generate your own clients, either as an employee or as an independent firm owner.

Serving Firm Clients As An Employee Advisor

For people who enjoy serving clients but still want a stable salary, a good option could be to become an employee advisor at a large ensemble Registered Investment Advisor (RIA) or an asset manager. These positions do not necessarily require you to take on the responsibilities of prospecting or generating new clients but rather serve existing clients procured by the firm.

The pros that come with these types of positions include the chance to immediately start financial planning and working directly with clients (generally after a period of training). However, the cons of this position include clients that are tied to the firm, so if you do decide to break off and start your own firm, these clients will unlikely follow you. That being said, if your primary goal is to simply work with clients (without having to look for them) and not start your own firm, this type of position would be a good choice.

Generating And Serving Own Clients

If you prefer to generate your own clients and serve them rather than take any client your firm gives you, and possess business-development experience from your previous job, an option you could entertain is a position where you will be a firm employee but responsible for bringing in your own clients. This way, you can generally earn some base compensation and benefit from the firm’s resources while building your book of business. But you and your procured clients will still be connected to the firm as this position does not offer total autonomy.

Some career changers choose to switch to financial planning because they eventually find out during their previous career that they don’t enjoy working for someone else. So they view financial planning as an opportunity to gain control over their work life and start their own firm. This is obviously no easy task as starting your own firm takes both technical knowledge and business-operations acumen.

But if you have a clear goal of achieving an established niche practice, possessing a previous career in a different but complementary industry can actually provide you with opportunities to choose a potentially suitable and fruitful niche.

Take, for example, you used to work in a large company and have gained comprehensive knowledge of all the benefits and retirement plans available for its employees. You could establish a natural niche by working with the existing and past employees of that company.

Acts like these could highly differentiate you from other advisors which would dramatically speed up your career timetable resulting in gaining more clients and earning revenue that is equal to or possibly more than from your previous career.

It doesn’t matter which path you decide to take, be it serving in a planning support role to starting your own firm, the start will require planning on your part. After you have made your final decision on which path to take, you can then work on acquiring the necessary education and credentials to succeed in it.

How To Stand Out

Making the career switch to financial planning is not something you can do overnight. Some jobs that are more sales-focused may hire employees without any formal financial planning education or experience, especially if the job comes with a pre-existing network of potential clients. These firms allow you to take the required licensing exams after coming on board. That being said, most firms are generally looking for candidates with certain education and certification prerequisites, or are at least on the path to meeting the prerequisites. This is to ensure that the candidate will have a higher chance of having a successful financial advisory career.

Different Career Paths And Their Education Options

Most people looking for a career switch would likely already have a bachelor’s degree or formal education in their previous career. Although it can be useful, it is not enough for you to get started on your financial planning career. You will need to earn a certificate in financial planning that will not only show that you understand the technical side of financial planning but also demonstrate a commitment to your pursuit in this profession.

Licensing For Financial Planners In Singapore

In Singapore, financial planners are required to be licensed and regulated by the Monetary Authority of Singapore (MAS) under the Financial Advisors Act (FAA). MAS sets out minimum requirements to be an appointed representative of a financial adviser.

In this context, appointed representatives are commonly known as agents, while a financial adviser refers to the entity (an insurance company or financial advisory firm) that is licensed to provide services like “advising others on investment products, issuance of research reports covering investment products, marketing of any collective investment schemes, as well as arranging life policies for others”.

It’s crucial to know that the FAA deals with insurance and related products with an investment element. Therefore, it does not regulate activities such as general insurance policies (which are considered consumption-based), deposit-taking products offered by banks (which are usually well-understood and low-risk), and loans or mortgages (which do not contain an investment element).

MAS introduced a licensing framework and launched a modular examination known as the Capital Markets and Financial Advisory Services Examination (CMFAS Exam) back in 2002. People that want to be employed by financial advisers to carry out advisory services are mandated to pass the requisite CMFAS modules and meet a set of basic criteria.

The following shows the requirements, which are quite straightforward.

  • Firstly, you must be at least 21 years old.
  • You will then need to have at least:
  • GCE ‘A’ Level certificate with three H2 passes and two H1 passes;
  • Or an International Baccalaureate (IB) diploma;
  • Or a polytechnic diploma; or equivalent academic qualifications.

Lastly, you must have taken and passed modules 5 to 9A from the CMFAS Exam, namely:

  • Rules and Regulations for Financial Advisory Services (M5),
  • Securities Products and Analysis (M6)
  • Collective Investment Schemes (M8)
  • Life Insurance and Investment-Linked Policies (M9)
  • Life Insurance and Investment-Linked Policies II (M9A)

These examinations are self-study, but we do offer study materials and exam sponsorships to help you join the industry.

After you’ve sat for the requisite papers, you can log a notification with MAS and begin work as a financial advisory representative.

In addition to education, you may seek out opportunities to gain real-life experience in the financial planning industry to develop the technical and interpersonal skills that you will need to be successful in this job. Two options stand out, the Financial Planning Association (FPA) Externship, which provides experiential learning in a virtual environment to help aspiring planners understand what the financial advice business is really about, and the FPA Residency, an intensive, week-long, in-person program designed to immerse future advisors in the craft of financial planning.

You can also look into taking specialized training depending on your prospective career path. If you’re looking to take on a technical planning role, you could go for training in common software applications that you are likely going to use on the job, such as financial planning or tax analysis software. The software vendors themselves usually offer this training, and if not, there are many other external options available. One of them is Udemy, where you can learn about more broadly used software programs such as Microsoft Excel.

If you’re looking to work directly with clients, consider learning effective client meeting skills. This can make you look more valuable to potential employers and more trusted in the eyes of your future clients. This training can be obtained through a variety of modalities, from pre-packaged virtual training courses that can help refine client meeting skills, such as Amplified Planning CORE, to comprehensive training on a system of financial planning and client communication, such as Money Quotient’s True Wealth Process and the Kinder Institute’s EVOKE Life Planning Training Course. You can also seek out opportunities with organizations like Toastmasters International to work on your communication skills.

If you will be seeking out your own clients, be it as an employee or independent advisor, and do not come from a sales background, try looking into developing your marketing and networking skills before diving into a job where your income depends on your success. You can start with self-learning from books, there is a wide range of useful books available that can give guidance on marketing, both in general and specifically for financial advisors.

If you’re looking for a more interactive sales training experience, there are also courses and coaching opportunities available to help you improve your prospects and sales skills to create an appropriate sales training approach that is tailored to fit your specific personality style.

If you’re looking to start your own firm, learning the best practices for getting your firm up and running can help start the transition. Besides reading blog posts and listening to podcasts of successful advisors who have managed to start up their own firms, you can also consider joining networks that support advisors in getting their firms off the ground, and continue to help them to thrive even once established, such as XY Planning Network and the Alliance of Comprehensive Planners.

Utilising Experience And Networks

As mentioned before, some people might already possess relevant work experience from their previous careers that could make them attractive candidates for financial planning firms.

If you are pursuing the path of generating your own clients, an important asset to have will be your own network that you could potentially tap into as a source for potential clients. This could include colleagues from your previous career. Having a Rolodex of potential clients in mind, rather than looking for them from scratch, could save you valuable time in gathering a client base and increasing your income.

Creating A Plan For A Career Change Into The Financial Planning Industry

Once you have decided on the career route you want to take and the education and qualifications you need to acquire, you can then lay out a plan that takes into consideration all your personal circumstances that will help you make your switch as smooth as possible.

You can first consider the time it will take you to acquire your education requirements and certifications before you can apply for any jobs or start your own firm. Fortunately, there are tons of financial planning educational program options available. There are programs that are offered in-person and online, this can be helpful if do not live near an in-person program. There are also synchronous and asynchronous options, allowing you to select a program based on your learning style and schedule needs.

These educational programs are also flexible in terms of scheduling time to completion, which is especially useful for those trying to complete the education requirement while still working in their previous job. Completing an in-person or synchronous program will depend on the ability of the course and the pre-set schedule (usually 12-18 months), Asynchronous programs may take significantly less time if you are able to devote significant time to complete the program.

Although a majority of people might not have the experience required to complete the CFP certification process before applying for financial planning jobs, passing the CFP exam can be a great way to show competency and commitment to obtaining a CFP certification.

Even though the financial planning education programs will cover most of the material on the exam, many candidates find that the intensive nature of the exam will need a separate period of studying (approximately 3-5 months) to ensure they are fully prepared.

Besides self-studying, there is also a range of CFP exam review programs that usually include instructor-led sessions, pre-study materials, and practice questions that help candidates focus on the substantive material on the exam and test-taking strategies for passing the exam.

If you are planning to eventually start your own firm, you can also plan to have the foundation of your firm set before launching. This includes everything from the name of your firm and registering your firm and organizing its banking and credit needs to building a tech stack and creating a marketing and branding strategy. Those who want to build their firm with a particular client niche can also take into account the time it takes to learn about the specific planning needs of their potential clients.

In the end, the main point is that while a career switch into financial planning can be a fulfilling decision, it is crucial to plan ahead to ensure a smooth and uncomplicated transition. This ranges from considering the roles in the industry that you are interested into the education and certifications needed for that career path, you must also consider the time, commitment, and costs needed to make this significant life change.

With adequate preparation, you can improve the chances that you will have a good start in the industry and a successful long-term career in financial advisory.

Here at InsuranceJobs.sg, we want to help you take your first steps into your career as a financial advisor. We’ll go over what you need to get started and answer any questions you may have about the process. Contact us today to set up a non-obligatory chat so we can discuss your options with you, whether that be in person, via zoom, or over WhatsApp.

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