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Becoming a Financial Advisor Sydney

Becoming a Financial Advisor Sydney

Typically, becoming a financial advisor entails completing industry-specific coursework, passing an exam, and getting licensure. If you’re ready for a career in finance, review the qualifications for becoming a financial advisor and then take the following steps:

1. Find Work

The first step toward becoming a financial advisor sydney is to get a job with a company that will sponsor your licenses. Some firms hire people with no prior financial industry knowledge and train them to become financial advisors. 

However, because these companies are frequently searching for employees with great sales skills, emphasize your experience selling products or services in your CV and during your interview.

2. Pass Required Licensing Exams

Passing the relevant license examinations is a vital first step for anyone wishing to enter the financial advising sector. In the US for example, passing the FINRA Series 7 Exam, as well as additional exams based on the sorts of products and services you wish to market, is frequently required. 

Also, if you want to offer securities in most states and provide investment recommendations to clients, you must pass the FINRA Series 66 Exam.

Becoming a Financial Advisor Sydney

3. Submit to a Background Check

A background check will be required as part of the registration process for a new financial advisor. This process will be coordinated by your employer; nevertheless, it may take several weeks and you may be restricted in your actions until it is done. 

For example, you may be required to work under the supervision of a fully licensed broker (or be barred from developing a book of business) until your background check is completed.

4. Create a Business Book

Any financial advisor will tell you that developing a strong book of business is essential to success. A book of business is essentially your clientele—the people or corporations to whom you provide advice and financial services. Building and maintaining a solid book of business, like any successful relationship, takes effort.

Here are some pointers on how to go about it:

Always provide excellent service. Your clients should have the impression that they are your first concern and that you always have their best interests in mind.

Be attentive to your clients’ requirements. They should have the impression that they may contact you at any moment and that you will respond swiftly.

Develop connections with other professionals in your sector. These relationships can help you refer clients to others and vice versa, allowing you to expand your businesses together.

5. Participate in Continuing Education

Once licensed, financial advisors must follow strict firm and regulatory standards in order to keep their licenses. Completing continuing education courses and passing routine tests are two of these requirements. While completing these criteria can take time, it is generally not difficult and is necessary for financial advisors to stay up to date on the newest rules and best practices.

What Is the Average Time to Become a Financial Advisor?

Within 30 days, you can join a firm and become licensed. Those who are serious about becoming a financial advisor should plan to spend months studying and preparing for licensing, as well as extra months or years obtaining additional licenses or specific certifications.

Becoming a Financial Advisor Sydney

What You Should Know Before Becoming a Financial Advisor

There are some crucial considerations to consider before becoming a financial advisor. The first is if you have the right temperament for the job. Financial counseling can be unpleasant, and it demands the capacity to deal with angry or upset customers. The best financial advisors are able to deal with rejection, as many clients will not follow their advice.

Another crucial consideration is whether you have the necessary skills and knowledge. Advisors must understand financial principles and be able to convey them in layman’s terms. They must also be at ease with industry tools, as many components of the job are now done online.

Other factors to consider before determining whether to become a financial advisor include the following:

Be somewhat constrained. As a licensed financial advisor, your firm’s compliance department must evaluate and authorize all written communications with the public. This limits the amount of information you can disclose with clients or prospective clients.

Be a salesperson. The majority of financial advisors’ fees are based on sales or assets under management (AUM). If you want to be an advisor, you must be comfortable with being compensated depending on your sales.

Remember that clients are entitled to reasonable care. Clients want you to put their interests ahead of your own when working as a financial advisor. If you are unwilling or unable to make decisions or give advice to clients without consideration for your own interests, you might consider changing careers.

Types of Financial Advisors

Here are some examples of financial advisors to help you choose your specialization;

Certified Financial Planner (CFP) 

To become a CFP, you must go through a rigorous certification procedure that includes passing difficult exams. CFPs are experts at creating comprehensive financial strategies for their customers.

Certified Financial Analyst (CFA) 

The CFA Institute has qualified this type of financial professional to assist investors in valuing the assets they buy and sell.

Is a Career as a Financial Advisor Right for You?

A career as a financial advisor can be satisfying since it allows you to assist people make wise investment decisions and plan for their financial future. However, it is not suitable for everyone.

Financial advisors must be able to cope with concerned or agitated customers regarding their financial status. They must also be at ease with numbers and have a solid comprehension of financial principles. 

In order to keep track of their clients’ finances, financial advisors must also be disciplined and organized. A career as a financial advisor, on the other hand, may be perfect for you if you are interested in assisting others with their finances and are ready to work hard.

More to read: Tips for Getting the Most Out of Your Financial Advisor

Tips for Getting the Most Out of Your Financial Advisor

Tips for Getting the Most Out of Your Financial Advisor

When it comes to finances, many people feel like they need help. This is where financial advisors come in. They are there to offer guidance and advice when it comes to investments, retirement planning, and more. 

However, working with a financial advisor does not come cheap. In this article, we will take a look at some tips to help you get the most value for your money when working with a financial advisor.

1. Conduct Research

This is essential. Create a shortlist of possible advisers based on referrals and testimonials from individuals you trust. Most will provide a free initial consultation, so take advantage of that to assess them.

Ask a lot of questions. They must:

  • Be ready to explain and illustrate their track record, credentials, and the quality of services provided.
  • They will ask you numerous questions in order to better understand your financial requirements.

Outline their prices clearly, both verbally and in writing, and provide you with their FSG.

Yes, it’s a pain, but shop about and don’t always go with the lowest option. Remember the old adage, “you get what you pay for,” within reason. You don’t want to be paying for a showy car driven by an advisor.

Also, keep in mind that, while price is important, it is not the sole consideration. Look for a financial advisor you feel comfortable with and who “speaks your language.”

2. Bargain

Financial advising is a highly competitive sector. Be prepared to negotiate fees to get a fair deal, especially if you have a lot of money. Because so-called high net worth individuals are highly valued, make sure you are also getting good value for your money.

3. Deductions for taxes

Only financial advice that is directly related to the production of assessable income is tax deductible. Fees for actively advising on/managing an investment portfolio that creates assessable client revenue are examples.

Actively advising on and managing an SMSF portfolio with assessable income.

The expenses listed below are not tax deductible:

4. Examine your fee statements

The Financial Sector, The Royal Commission (which was announced in early 2019) heard some surprising admissions from some of Australia’s biggest financial institutions that some of their advisors were guilty of billing clients for advice that they never got. An ASIC inquiry discovered that over 330,000 customers may have been charged more than $200 million for continuous financial advice that they never received. Commonwealth Bank, ANZ, NAB, AMP, and Westpac were among the financial firms involved.

This emphasizes the need of double-checking the fee disclosure documents that financial advisors/planners are legally required to supply you with if you have an ongoing relationship with them. Check that you’re getting what you’re paying for!

The recent Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry focused heavily on financial advice. The final study included ten proposals that might drastically alter the way financial advice is offered, such as prohibiting grandfathered commissions, yearly fee renewals, and the disclosure of lack of independence. 

Both the Coalition and Labor have backed them, however they will not become legislation for some time due to delays created by the 2019 Federal Election and, most recently, the 2020 coronavirus.

ASIC issued a consultation paper in March 2020 on its proposed annual advice fees, superannuation fee consent, and ‘lack of independence’ disclosure amendments, inviting advisors to offer comment before new legislation is adopted.

Tips for Getting the Most Out of Your Financial Advisor

Insist on Fee Disclosure

Unfortunately, making an appointment is the only definite method to find out what financial advisors in your area charge. When you first meet with a financial advisor, you should be given a Financial Services Guide (FSG). It must include details on how they will be compensated for their advice. Their fees may include any or all of the following:

Service charges: These are flat costs for a variety of services, such as the adviser’s consultation time, the production of a statement of advice (SOA), the implementation of a SOA, or the fee for an annual review.

Investment portfolio percentage fees based on a percentage of the value of your investment portfolio: If you have a high net worth and are being charged a percentage fee, proceed with caution. Even if the percentage fee is low, the cash amount could be enormous and unjustifiable if your financial circumstances are not particularly complicated.

Fees dependent on performance: This is a performance-based advisory fee depending on the performance of your investment portfolio. If your advised investments outperform, the adviser can charge a portion of the excess performance over a predetermined benchmark.

Commissions: An adviser may be compensated for products that they propose and sell. However, under the Future of Financial Advice (FOFA) legislation revisions, commissions on new superannuation plans and investments were prohibited as of July 1, 2013. Legacy commissions on products sold before to this date might still be charged by advisers. 

In addition, financial advisors are required by law to disclose their fees in the documents listed below.

Statement of Advice (SOA)

This is a document that a financial consultant must provide you with when giving you advice. It must specify any compensation or benefits they will receive if you follow their advice.

Product Disclosure Statement (PDS)

Before you commit to a specific financial product, an adviser must provide you with the PDS. Any relevant fees must be specified in the PDS.

Annual Fee Disclosure Statement

If you agree to get into an ongoing relationship with a financial adviser, they must supply you with this paper. This document must include the following information: 

  1. The costs you were charged by the adviser or planner in the previous 12 months
  2. The assistance you received
  3. The services to which you were entitled.

The FOFA regulations require an adviser to formally renew any ongoing advice agreements with you every two years. Further, you have the right to cancel the agreement at any time.

Final Thoughts

Whether you are accumulating wealth, maximizing an inheritance, or planning your retirement income, the financial decisions you make can have a significant impact on your wealth and well-being. With so much at stake, it is often prudent to obtain professional financial advisors in order to attain your objectives. If you do, take reasonable steps to ensure that you receive high-quality counsel at the best possible price.