Forget finance: Should future planners pick creative college majors?
This article was originally published by Investopedia.
Do you have friends or relatives who are considering becoming an advisor? The skills acquired in college can set the career trajectory for promising young talent. Whether the goal is to work at an investment brokerage firm or an RIA with her own shop, one thing is certain: Financial advisor of the future will need specialized training on top of their college degrees in order to succeed. (For more, see: Is a Career in Financial Planning in your Future?)
RELATING TO THE CLIENT
Liberal arts, communications or psychology degrees offer important communication and analytical skills that can serve an advisor well. Understanding investing and business concepts is of course important, but much of an advisor's task is dealing with people and their emotions surrounding money. Liberal arts majors can help the advisor communicate and relate to the client.
In psychology, students learn about emotions, fears, anxieties and how the mind works — skills that are clearly relatable to money and financial issues. This training will improve the client advisor relationship. Guiding clients through tough life situations is one of the most valuable skills an advisor offers.
Communications majors also benefit from analytical skills and the ability to make complex topics seem simple. When supplemented by the finance and investing concepts, a communications trained planner can break down confusing financial problems in a way that the average client can understand and turn into actionable decisions.
The liberal arts teach sound reasoning and analytical skills. When integrating and proposing a financial plan, the advisor with excellent critical thinking skills will be well-prepared to educate and explain the various options. (For related reading, see: An Introduction to Financial Planning Organizations.)
ECONOMICS AND ACCOUNTING
An economics degree, with courses in finance also offers a foundation for the financial advisor. Economics conveys both global and broad macro concepts as well as the important micro topics such as monetary and fiscal policy. The planner with an understanding of economics is equipped to help their clients traverse the business and financial market cycles.
In general, any business major is a sound foundation for a financial planning or advisory career. The basic requirements for the business major; accounting, economics, marketing, finance and management lay the groundwork for a successful transition into the financial planning field. You'll find that many financial advisors hold a CPA or other professional designation. (For related reading, see: CPA, CFA or CFP - Pick Your Abbreviation Carefully.)
Although a business degree is preferable for the financial advisor, an individual who decides to enter the planning field after college or late in their college studies may successfully proceed without a business degree. That is one of the benefits of an advisory career— there is no required college major in order to enter the profession.
BUSINESS AND FINANCE
For the student looking to become a financial advisor, a business degree with a concentration in finance is ideal. The business student gains a broad understanding of capitalism, money, banking and economics. All are important topics in understanding financial planning and related matters.
The finance concentration drills down into how to value a business, stock or other financial product. The finance student is on sound footing to enter the advisory field. The specialized financial advisory training will supplement the business major's strong quantitative and analytical background.
Today, there are financial planning majors or certificate programs cropping up at some universities as well. For example, San Diego State University offers a bachelor’s degree in financial services with a certificate in personal financial planning. With a business degree and a concentration in financial planning, the post graduate coursework to obtain financial advisor licensure may be minimized. This degree covers many aspects of a financial advisory role such as investments, taxes and estate planning. (For related reading, see: Want to Be a Financial Planner? Click Here.)
THE BOTTOM LINE
There is no required college major for a career as a financial advisor. That said, there are advantages and disadvantages with each type of college major and successful advisors come from a variety of backgrounds. Since there is additional study and certification required to obtain licensure and begin practice as a financial advisor, the dedicated applicant can have a successful career as a financial advisor with any college major. (For related reading, see: Trends Challenging Financial Advisors.)