How to Become a Financial Planner in 2022?

A financial planner assists you in charting your financial route, from budgeting and saving to lowering your tax burden and leaving a financial legacy for your children. Here's what you should know if you're considering hiring a financial planner.

What Exactly Is a Financial Planner?

A financial planner assists customers in managing their money and achieving their long-term financial objectives.

A financial planner must be well-versed in personal finance, taxes, budgeting, and investing. They may specialize in tax planning, asset allocation, risk management, retirement planning, or estate planning, and many of their customers are young professionals or retirees.

How financial planners support clients.

How financial planners support clients.

Financial planners advise and help customers on a wide range of issues, including investing and saving for retirement, as well as supporting a college education or starting a new business while protecting wealth.

What are the Goals of Financial Planning? 

Financial planning predicts future financial requirements and provides constant cash flow. Financial planning enables you to get control of your finances by avoiding excessive debt and reliance on others. It enhances personal relationships since all financial decisions are properly prepared and efficiently conveyed to others.

A solid financial plan's goals are to have you financially ready by setting aside funds to satisfy the following needs:

Emergencies in Medicine

Medical bills are one area where money may go abruptly. As a result, the initial portion of your financial strategy should be centered on safeguarding yourself and your family with a decent medical claim coverage. This will also cover any unexpected fees incurred as a result of medical crises. In addition to medical expenditure protection, the Income Tax Act provides tax benefits.


The term insurance component of financial planning provides you with much-needed security against unforeseen events. Term insurance has minimal premiums and gives maximum coverage, making them cost-effective.

Objectives of financial planning

Objectives of financial planning

Term plans offer grant tax benefits under the Income Tax Act of India. You may also apply for plans that cover your significant possessions, such as your house and automobile, against theft, fire, and other unanticipated events.

The future of children

A financial plan's primary goal is to keep us prepared for our children's costs, such as their school and wedding. Mutual fund investments can help ensure the future of our children. Investment in equities mutual funds or children's funds can help them accumulate wealth till they reach adulthood.


Proper financial planning would assist you in better planning for your retirement time from the start of your work. Through expert assistance, you can select investment vehicles such as mutual funds, bank fixed deposits, or invest in the stock market. This will aid in the timely creation of a retirement fund, allowing you to live a happy and comfortable retired life.

Financial Planner vs. Financial Advisor: What’s the Difference?

Financial planner and financial adviser are phrases that are sometimes used interchangeably. In truth, both types of professionals provide financial planning services that assist customers in meeting their financial objectives.

Financial advisors, on the other hand, are often regarded as a considerably larger group. They are experts that handle your money, arrange insurance, and serve as your stock broker, in addition to providing financial planning services. Financial planners provide more specialized services.

A financial planner is a sort of financial adviser that provides overall financial advice in addition to services such as investment management. Financial advisors, for example, can assist you in answering issues such as, “How can I prepare for retirement and my child's college fund at the same time?”

How Many Types of Financial Planner? What Are They?

It's worth noting that the phrase “financial planner” is an unregulated umbrella word. Anyone with the title of financial planner can provide financial planning services. Some may specialize in certain areas of preparation, such as retirement or tax management, while others take a more comprehensive approach. Some may not even have your best interests in mind and should be avoided.

Fiduciary Financial Planner

A fiduciary financial planner is obligated to operate in the best interests of their clients. The word fiduciary duty refers to a planner's obligation to put their client's financial interests ahead of their own. In practice, a fiduciary financial planner must provide their customers with the best available solutions at the lowest possible cost, regardless of the fees or commissions the planner receives from the client or other sources.

Some financial planners are merely held to a standard of appropriateness. A financial planner or advisor's suggestions must fit your needs under a suitability criterion, but they are allowed to offer goods or services that charge you greater fees or earn them higher commissions than equivalent items.

Certified Financial Planner

The Certified Financial Planner designation is an industry accreditation with stringent educational and ethical criteria that fully enables planners to deliver complete financial planning services.

Notably, all CFPs are required to behave as fiduciaries, and the majority work on a fee-only basis, which means they are solely funded by you, not by the products they recommend. CFPs are cornerstones of the financial planning industry due to their extensive training and fiduciary standard—and where many clients choose to begin their financial planning journey.

Registered representative

A registered representative, commonly known as a stockbroker, is a broker-dealer salesman. Registered representatives have passed the Series 6 and/or Series 7 tests, demonstrating basic understanding of financial products. A certified registered representative must be registered with the Financial Industry Regulatory Authority (FINRA) and regulated by the state's securities authority. Stockbrokers are often not the greatest financial planners since their duty is to sell you things rather than to advise you. The majority of registered representatives are compensated based on what and how much they sell. That implies they have an inherent conflict of interest between recommending the greatest solution for your requirements and promoting the one that will make them the most money.


Chartered Financial Analyst (CFA)

Only the CFA Institute may award the CFA designation. Advisors must complete rigorous education and work experience requirements, as well as pass a series of three tests, to obtain this qualification. CFAs have skills in investment research and portfolio management, and they've also demonstrated a commitment to perfecting their trade by putting in the time and effort necessary to obtain this certification. However, while the CFA Institute recommends continuous education, it is not obligatory, thus a CFA may slip behind the trends. Before employing a CFA, inquire about their continuing education activities.

Personal financial specialist (PFS)

The PFS designation is an “add-on” certification for CPAs offered by the American Institute of Certified Public Accountants (AICPA). It is designed for CPAs who desire to expand into financial planning and need at least two years of personal financial planning experience, either in company or teaching. PFSs must keep their CPA accreditation (which includes considerable continuing-education requirements, among other things) and adhere to the criteria outlined in the Statement on Standards in PFP Services. Because PFSs are usually CPAs, a financial planner with this credential would be an excellent pick for someone in need of a tax or accounting specialist.

How Many Types of Financial Plans? What Are They? 

Short-term Financial Plan

The one-year short-term financial plan covers financial goals and investment requirements. A short-term strategy is less risky than a long-term plan and can be readily altered if necessary. The short-term financial plans include the establishment of an emergency reserve.

The corpus demands you to have at least four times your monthly pay financed. The emergency savings can help with medical expenses and temporary income loss. Investing in liquid mutual funds can be used to establish emergency savings.

Medium-term Financial Plan

Medium-term plans include financial strategies that span five to seven years. This is the time when you want to cash in your assets to buy your dream car, go on a foreign trip, or buy a property.

Timely types of financial plans that you should know.

Timely types of financial plans that you should know.

You may also consider establishing a secure multipurpose corpus of the fund to pay off a loan or cover wedding expenditures. The medium-term financial plans define above-life goals that require a fixed sum of money. It will also recommend that you invest in debt mutual funds, bonds, or fixed deposits to assist you reach your goals.

Long-Term Financial Plan

The long-term financial strategy spans seven years and beyond. Long-term planning is vital for enjoying financial stability in your retirement years. Long-term financial planning includes budgeting for children's higher education and weddings.

Long-term goals can be best realized by investing in equities, mutual funds and stocks. This is because market volatility levels off over a longer time horizon, giving you a greater opportunity of achieving bigger profits.

What Are the Requirements to Become Financial Planners?

A bachelor's degree is required, as well as courses on investing, taxes, estate planning, and risk management. If you enjoy selling, are good with people, have strong analytical and communication abilities, and can work independently, financial planning may be for you.

Employers in financial planning want applicants with a bachelor's degree in accounting, finance, economics, business, mathematics, or law. Investment, tax, estate planning, and risk management courses are also beneficial. Financial analysts may also pursue professional qualifications such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), and Chartered Financial Consultant (ChFC).

Process required to become a financial planner

Process required to become a financial planner

Personal financial advisers are not needed to have a license in general, but advisors who offer stocks, bonds, mutual funds, or insurance may need licenses such as Series 6, 7, or 63. The Financial Industry Regulatory Authority (FINRA) administers these tests, and most of them need sponsorship by a member business or self-regulatory body.

Frequently Asked Questions about becoming a Financial Advisor

  • Is there a distinction between a Certified Financial Planner and a Certified Financial Advisor?

Yes, there is a distinction between a financial adviser and a financial planner in general; however, no financial advisor certification exists, just one for a financial planner. This is due to the fact that while every financial planner is a financial adviser, not every financial advisor is a financial planner. Financial planners assist people and businesses in achieving long-term objectives. This includes managing money, setting savings programs, assisting with the purchase of a property, and assisting with retirement planning. A financial advisor, on the other hand, has a much narrower perspective, which is merely to assist you in managing your money.

  • What Should I Study in College to Become a Financial Advisor?

Anyone, regardless of major, can become a financial counselor; nevertheless, some majors aid in becoming a financial advisor. Economics, business management, finance, accounting, statistics, and other related degrees are examples.

  • What Does a Financial Planner Cost?

Commission-based financial planners get money when their customers purchase financial items recommended by the adviser. Fee-only financial planners do not collect product commissions. Instead, they bill by the hour, project, or assets under control (AUM).


You may believe that time is on your side, yet you may not be able to work for the rest of your life. This means that your income and other financial resources will not remain constant indefinitely.

Even after retirement, everybody who wants to live on their own terms must work. This demonstrates the significance of financial preparation and should encourage you to pursue smart financial planning for your future years.

Felix Pham
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