How to Become a Work from Home Financial Advisor

The financial industry had been delayed in embracing the virtual work setting, but gradually, more and more jobs are now being offered with flexible arrangements. Today, I’ll focus on becoming a work-from-home financial advisor – it’s a pretty in-demand job traditionally, but will it work if the clients you normally communicate with face-to-face are no longer in front of you?

This post talks about how much you can earn from a work-from-home financial advisor position, and if being employed with a bank, private firm or other financial institution is better than the freelance route.

But first, let’s talk basics.

What does a Work-from-home Financial Advisor do?

A financial advisor is a general term that encompasses the role of brokers, stockbrokers, account executives, wealth management advisors, or other fancy names financial institutions call their skilled employees who handle customer accounts.

“Handle” here means a lot of things, depending on what the customer’s financial goals are.

This could refer to buying or selling stocks, bonds, and other securities on behalf of clients… or providing general financial advice regarding investments or something more client-specific like retirement plans.

The duties of work-from-home financial advisors are the same as those who work in traditional office settings.

These include:

• Providing sound financial advice based on client goals. When employed in banks or insurance companies, a financial advisor is a person who would be facilitating the client’s transaction requests such as buying a new insurance policy or transferring funds into another investment.
• Explaining laws relevant to the client’s financial goals. Financial advisors are up-to-date with laws related to insurance, taxes, investments, and other similar avenues.
• Guiding clients to available services. It doesn’t matter if the financial advisor works at a bank, investment firm, and an insurance company or he/she works freelance getting new clients to sign up for certain services. This job will involve in-depth explaining (or sometimes up-selling) about products and services you think a client needs.
• Helping clients build a financial plan. Some financial advisors do not sell any product or services. Instead, they provide consulting services to help clients plan out future expenses such as retirement, education, life insurance, investment, and so on.
• Researching appropriate investments for clients. When a client has funds for a small home business or a corporation but has no idea what kind of business to put up, this is where a financial advisor steps in. He/she conducts research based on industry markets, client requirements, potential risks, and personal finance knowledge.

The financial advisor may seem like a job anyone can do, but this is actually not true.

The responsibilities of these advisors can be stress-inducing since there is not much room for error.

Poor advice could be costly to clients and lead to the advisor’s job loss, or worse, a major embarrassment to the advisor’s company.

Education, Skills, and Equipment Needed to Become a Virtual Financial Advisor

A work-from-home financial advisor has the same credentials as his/her office-based counterparts.

• Formal education: A bachelor’s degree in finance, accounting, business administration, economics, pre-law, or mathematics will help begin a career as a financial advisor. Some colleges also offer financial planning short courses.
• Training: A work-from-home financial advisor usually begins his/her career under the wing of a senior advisor. This is where entry-level advisors learn the ropes hands-on and build their own investment portfolios and client network.
• Short courses: Any coursework with in-depth classes in taxes, investments, estate planning, mutual funds, and risk management are helpful as an introduction to this career.
• Certification: If you completed any finance-related bachelor’s degree and already have at least 3 years of work experience, you can take an exam and (if you pass) become a Certified Financial Planner (CFP).
• Licenses: Not all financial advisors would need certification. However, if you are providing financial advice and buying/selling stocks and bonds on behalf of other people, you or your company must be registered with the Securities and Exchange Commission. Meanwhile, those who buying/selling insurance policies must obtain a license from state boards. Check with the North American Securities Administrators Association (NASAA) how you can get your license.
• Required Skills: As someone who will be talking to clients day-in, day out, you need advanced communication and interpersonal skills. You should have natural teaching ability, so you could explain technical and complex financial information to clients. Math and analytical skills are just as important since you’ll be faced with numbers, graphs, charts, and other financial data, which you need to explain to clients. And if you’re selling a product or service, sales skills will come a long way as well.

Financial jobs like this require continuous learning because of the ever-changing state of local and global economies.

How Much do Finance Advisors Make?

According to the U.S. Bureau of Labor Statistics, entry-level financial advisers can earn around $41.5k/year (around $20/hour), while senior advisors could take home up to $208k/year ($100/hour).

Of course, these numbers only consider those who are employed with financial institutions like banks, investment firms, insurance companies, stock market firms, and other similar companies.

A freelance financial advisor can earn on a commission basis if he/she brings in new clients or product orders to investment firms, banks, and other institutions.

Some freelance advisors own their respective companies and could bring in larger revenues.

A work-from-home financial advisor can either work for a firm, start his own financial consultation service, or a mix of both.

Entry-level advisors would likely earn less than their office-based counterparts, but experienced advisors who have impressive portfolios already and recognized names could earn as much as when they worked in an office setting.

Freelance vs. Employed by a Firm

Working from home can be done both as a freelance financial advisor and as someone employed by a firm.

There are pros and cons to both these routes:

Freelance (either solo or with a few home-based office employees)

• Pros: You can become a financial advisor and earn entirely commission-based from two or more companies. You have can control which product and service to recommend to your own clients. And because you don’t work by-the-clock, you have the freedom to work as much or as little as you want.
• Cons: Unfortunately, there are no “company benefits” to speak of as a freelancer. Plus eventually, if you’re a good work-from-home financial advisor, your operation has the potential to expand. When this happens, you would need more space (to rent an office, build a home office), and hire assistants to support your business. While expansion is always good, it also comes with additional expenses and/or more government fees, taxes, and licensing requirements.

If you’re looking for inspiration, check out how Bill Harris launched his website Personal Capital in 2011 and provided effective money management for clients with $100,000 to $2,000,000 to invest.

Now, this is a full-fledged firm.

Employed by a financial institution 

• Pros: You don’t need to invest in office equipment and renting out a suitable office space. You receive company benefits and get paid a salary and sometimes added commissions for extraordinary work. You get to work only 40 hours a week with travel and some fieldwork for meetings sprinkled into your schedule.
• Cons: You are restricted to the clients your employer assign to you. It is very rare for financial institutions to allow you to work “on the side” for other companies, which means your compensation is quite limited.

Is Work-from-Home Financial Advisor a Good Career Path?

Whichever route you take in your work-from-home journey, the good news is financial advisors as a career is projected to grow 15% until 2026.

According to the BLS, this is because a growing number of baby boomers is off to retirement and would need help with money management moving forward.

A work-from-home financial advisor is a good profession for those who have experience working in the finance industry.

Unfortunately, because of the risks it could potentially cause other people’s life savings, becoming a financial advisor isn’t a profession anyone can just jump right into.

If you’re interested in working in the financial industry, but don’t want a consultant or advisor position, check out how to land virtual bookkeeping or work-from-home insurance jobs. You can even find part-time work helping other people prepare their taxes.