Financial Advisor Career Plan - Assignment Example

Financial Advisor Career Plan Introduction My long-term professional plan is to establish my own personal finance advisory company ten years from now. In the medium-term, my plan is to work as a financial analyst or personal financial advisor in a London-based financial company to gain experience, improve my professional qualifications by taking up a postgraduate degree programme, and widen my network of contacts. In the short-term, I plan to finish my course on Business and Finance, acquire initial experience, and to secure a professional certification. This paper has two parts. Part One is an analysis of the labour market conditions of personal financial advisors in the U.K. Part Two is a critical reflection on my internal strengths and weaknesses, as well as the external opportunities and threats I am faced as I pursue these career goals and aspirations. Financial Analyst or Financial Advisor For purposes of this career plan, I have used these two occupations interchangeably because these are two closely related entry-level occupations available in the financial services industry (Murdoch, 2005, p. 8). A financial analyst and a financial advisor can work at a commercial or investment bank, a stock brokerage, or for a private financial services company, analyse financial reports for the purpose of providing investment advice, and open up similar career opportunities within the diverse financial services sector. Both occupations also require similar personal and professional qualities such as good interpersonal, analytical, and decision-making skills. Part One: Labour Market Study for U.K. Financial Analysts This section provides a thorough analysis of the labour market conditions of personal financial advisors, based on the situation in the U.K. where I plan to pursue the first ten years of my professional career. London: World's Financial Centre The main reason I chose U.K., more specifically London, is that this place is the generally acknowledged financial centre of the world. A recent article (Economist, 2006) confirmed this and cited geography as one of the main reasons for its success: it is between Tokyo and New York, the financial capitals of Japan and the United States, two of the world's economic superpowers. London's location means that it can trade with both cities every day, starting the day trading with Tokyo and, just as the workday is ending in London it can also start trading with New York. Throughout the day, it can also trade with other countries in Asia (China and Singapore), the Middle East, Europe, and Latin America. It is the ability of London to trade any time with any other country in the world during a normal working day that makes it attractive for financial companies to have a branch in the City, as it is called. This gives us another reason why London has become the financial capital of the world: the number of finance companies based in London is growing. This means that there are more opportunities to find employment and to gain experience because of the high demand for workers and the high supply of jobs available. This is confirmed by a recent study (Murdoch, 2005) of career prospects in the financial services sector. As the Economist (2006, p. 76) article points out, London is an economic cluster in the fast growing field of global financing. Globalisation Another reason why London provides more job opportunities is globalisation. Micklethwait and Wooldridge (2000, p. xvi) called globalisation "the most important economic, political, and cultural phenomenon of our time" characterised by the "integration of the world economy, reshaping business and reordering the lives of individuals, creating social classes, different jobs, unimaginable wealth and, occasionally, wretched poverty." The globalisation phenomenon is exerting pressure on companies and governments to adopt a global strategy, which Stiglitz (2002, p. 9) defined as "the way firms cope with globalisation, the integration of countries and peoples of the world brought about by the enormous reduction of transportation and communication costs, and the breaking down of artificial barriers to the flow of goods, services, capital, knowledge, and people across borders." The strategy of global (or multinational) firms is a set of objectives that help it deal with globalisation: what goods to sell to world markets, how to sell these goods, and how to transport these goods from where they are produced to where they are consumed. Globalisation affects firms that sell products like autos and appliances, and service firms like banking, retailing, and postal services. All these firms need financing to do business - receive or make payments, invest or store their funds, raise capital by borrowing or getting investors - and the best place for this is London, the world's financial capital. Another effect of globalisation is that companies need people coming from other countries to provide opportunities to expand business networks and contacts and to gain cultural or social insights where foreign workers can help. Because of Britain's legacy as a world empire, it attracts people from several nations to come here to study, begin their work life, and to use London or other cities in the U.K. as a take-off point for their professional careers. Several top professionals and government officials in Asian, African, and Latin American countries had similar backgrounds, and their successes are due to their U.K. roots. Demographics and Skills Shortages Another reason why the labour market prospects for financial professionals in London is encouraging is the combination of a decreasing youth population and an increasing population of aging workers nearing retirement. Several books and recent articles have pointed out this twin problem (Herman and Gioia, 2003), especially in Europe and, specifically, in the financial services sector. A study by Lutz (2006) emphasised that one in four Europeans will be over the age of 65 by 2030. Europe, with 19 of the world's 20 oldest countries (the single non-European country is Japan), will see its populations continue to age over the next twenty-five years. He also showed that one-fifth of Europe's population will be over 80 by 2050, more than 20% of the youth will be unemployed, and by 2010 deaths will be higher than births in Europe, resulting in population loss over the next 25 years. One of the conclusions of the 2005 National Employers Skills Survey by the U.K.'s Learning and Skills Council (2005) is that employers experience skill deficiencies amongst applicants for a quarter of all vacancies. The survey showed that U.K. employers continue to experience difficulties in recruiting as a result of applicants not having the skills required, skill deficiencies amongst the current workforce, and they recognize the need for training and workforce development activities. Therefore, an educated person would be in demand. This is also the finding of an article by Wooldridge (2006) in The Economist admitting that professional talent has become the world's most sought-after commodity, and that the shortage is causing severe problems amongst employers in developed countries that want the best professionals to work for them. Several financial services companies are facing serious shortages in finding talented workers that, as an act of desperation, they are planning to offshore (or send abroad) portions of their financial analysis work to countries such as India (p. 9). Parallel findings were presented by Murdoch (2005) for the financial services sector, which continues to grow in London where the sector is dominated by large banking, stock brokering, and financial investment institutions. The ongoing battle between RBS/NatWest and Barclays over the Dutch bank ABN-AMRO is just one sign that the sector continues to grow, with positive prospects for employment growth. Companies are buying each other to gain access to brainpower in order to remain competitive in world markets. Over-all Employment Opportunities These development are positive opportunities for finding employment in London as a financial analyst or as a financial advisor. London's image as the world's financial centre would continue to attract not only capital from other parts of the world, but also lead to new working arrangements where older professionals can transfer skills and know-how to younger workers like me (Dixon, 2003; DfWP, 2005). Another recent article (Economist, 2007) showed that a richer aging population would prefer that a financial advisor manage details such as paying their bills, taking care of travel planning, and making funeral arrangements, and that these clients would be willing to pay an annual fee of a percentage of assets managed. Part Two: Personal Career SWOT Analysis This section is a personal career SWOT analysis to reflect on my employability in the career, occupation and labour market I have chosen, which follows the career path of being a financial analyst and financial advisor in the short- and medium-term, and starting my own multinational finance company in the long-term. Personal Requirements In the Introduction, I already summarised my career vision for the next ten years. Before I conduct my SWOT analysis, I would like to give details of the professional qualifications I need to pursue my career vision. Based on my study of the work of a financial advisor (FSA, 2007; FSSC, 2007; IFS, 2007; Learndirect, 2007; SII, 2007; Graham, 2003), I need to develop certain competences and characteristics in the next ten years as in Table 1. I also need the professional requirements as in Table 2. I would like to acknowledge the materials from the Financial Services Authority, Securities and Investment Institute, the Personal Finance Society, and the Financial Services Skills Council for the contents of this section. Their materials helped me to understand better my future career and plans. Professional Requirements Financial advisors help corporate or individual clients sort out their financial needs, and advise them of suitable financial products and services. The products available include pensions; mortgages; investments; house and life insurance; critical illness cover; income protection and savings plans. Day-to-day activities include questioning clients to gather information, researching products and making recommendations. I may work with financial planners that collate product research into written reports. As an Advisor, I will meet with providers of financial products, such as broker consultants. I also need to keep up to date with any changes in the legislation or developments in best practice. I should not limit myself to knowing more about financial products and services. I should also learn how to sell and market these products, especially at the early stages of my career. As I know more about the business, I should also learn how to come up with new products and services that people would buy. I must develop my imagination, not only so I can innovate but also so I can find ways to sell and to package what I am selling: professional advice related to financial products and services from the company that employs me. I need to develop my sales and marketing skills so I can do all these. Skills Needed A financial advisor must be good with numbers and know how to operate a computer. They should have integrity and confidence, be able to understand how financial products work, be determined as we sell services and products to clients, be able to keep up with new trends in the financial market, good at research skills, able to analyse and present information, good at communicating and listening, able to explain complex ideas to clients, and able to inspire confidence and trust. Given these skills requirements and the information on the requirements and prospects of the profession, I can do the personal career SWOT analysis. SWOT Analysis My personal career SWOT Analysis is summarised in Table 3. I would focus this discussion on one key strength, weakness, opportunity, and threat. Strength: Ability to Work Hard My key strength is my ability to work hard, because I believe that with hard work, I can do anything and reach my long-term goals, the most important of which is to start my own financial advisory company and to make it expand worldwide. I love to work, to apply my mind to problems, to look at problems as opportunities to be solved. I also believe that with this key strength, I can overcome any weakness, take advantage of every opportunity, focus on what is important and to disregard those that are not important, and I can face threats with courage and ambition. I have also shown in the past that I can do many types of work because I love to work. I can study whilst working and work whilst studying. With hard work, I can go through each of my weaknesses and work on them one by one until I succeed. I also know that there will be a lot of difficulties, but I am prepared to face them. I learned from my parents that hard work is good, and that only those who know how to do it will succeed in this life. I see many of the young people my age who prefer to relax and enjoy life, but for me I prefer to work. Of course, I know that I also have to rest and enjoy life, but I do it with family and friends doing things I like, that do not take too much time, and that I know will help me succeed in life, such as meeting people, making friends, learning more about how to make money and be a better person. Weakness: Lack of Patience My biggest weakness is impatience, and if I am not careful and I do not learn to be more patient, I would end up destroying myself and my career. I have worked before as a manager of people and I make mistakes in talking to those below me or those on the same level, because I need to improve my self-control. I also get angry quickly, although I am improving a little as my friends help me. I know that if I want to work as a financial advisor, I have to be patient because many of my clients will not know what products I am selling and if they can afford to pay for it. I have to patiently explain the details without thinking that my clients are not intelligent. Most of the biggest mistakes I made in the past are the result of my impatience. I have learned from them, but as I do more in my study and work, I learn more about other people and that we are different. I am teaching myself and working hard to control my impatience and to be more understanding with other people. I know I will succeed because I see progress in myself and I am encouraged by the help that I get from my family and friends to attack this weakness. Last month, I also talked to two of my closest friends and asked them to tell me immediately by correcting me if I show my lack of patience when we are in public. I was told that sometimes, I show my lack of patience with unconscious body language and with the words that I use, and one of them told me. I was happy that I have friends who help me, and with their help I can change. Opportunity: Market for Financial Advisors Growing The biggest opportunity is the growing job market for financial advisors. In Part One, I already discussed why the market opportunity is growing: London as financial centre, globalisation, population is going down, business sector is going up, and the number of workers who are retiring and who need financial advisors is going up. I am in the right place, at the right time, and interested in the right job. I know that many other young people are thinking the same way about the job market, and I will have to compete with them, but I have several advantages that I can use: my global network of contacts (I know many people from other countries that are growing their economy), my previous work experiences, and my unique set of personal strengths that I can use to take advantage of this opportunity. I have also started talking to friends who are employed in big banks and investment houses, and I know where the opportunities are and how to go about getting employed after I finish my studies, the salary levels, career prospects, and the type of workers in those firms. I am learning many things from my research that I know will be helpful for me when the time comes. Threat: Neglecting my Health If I am not careful, I know that I can get sick, and more serious things can happen. This is the biggest threat to my ambitions. Right now, I am young and healthy, but if I do not develop the healthy habits and learn to discipline myself, I am putting myself in danger. This is the threat that I recognise now and have to do something about. I have to achieve balance in my life, and for a young person like me this is not easy, but I know that by working hard it can be done: balance work and study, my personal and social life, and learning how to control my ambition so that I do not burn myself out when I am not ready. A Bright Future Ahead I am looking forward to a bright future as a financial advisor. I have made a Career Plan based on an assessment of my strengths, weaknesses, opportunities, and threats. I know what my key qualities are, and based on the qualities I need to develop I have started working towards my future personal and professional goals. I know that I cannot do all these alone, so I have asked the help of friends, family members, and people I respect like some of my teachers and others I know in the community to join me as I work towards my future. A plan is only one step that I can follow, and I have to be flexible so that whatever happens, I can change quickly when needed. What is important is that I have a clear plan I can follow, one that is ambitious but realistic, and where I would enjoy the process of putting it into practice. Bibliography Department for Work and Pensions (2005) Opportunity Age: Meeting the challenges of ageing in the 21st century; Presented to Parliament by the Secretary of State for Work and Pensions by Command of Her Majesty. London: The Stationery Office. Dixon, S. (2003) Implications of population ageing for the labour market. Labour Market Trends, February, p. 67-76. Economist (2006) "Capital city: London as a financial centre". The Economist, 21 October, pp. 75-78. Economist (2007) "From cheque books to checking pulses". The Economist, 14 April, pp. 75-76. Financial Services Authority (2007) Official Website. Available from: [Accessed 22 April 2007]. Financial Services Skills Council (2007) Official Website. Available from: [Accessed 21 April 2007]. Graham, B. (2003) The intelligent investor: the definitive book of value investing. J. Zweig (Ed.). New York: Harper. Herman, R. and Gioia, J. (2003) Impending crisis: Too many jobs, too few people. New York: Oakhill Press. Institute of Financial Services (2007) Official Website. Available from: [Accessed 24 April 2007]. Learndirect (2007) Financial advisor/consultant job profile. Available from: [Accessed 19 April 2007]. Learning and Skills Council (2005) National Employers Skills Survey 2005: Key Findings. Coventry: LSC. Lutz, W. (2006) European Demographic Data Sheet 2006. Vienna and Washington, DC: Vienna Institute of Demography, International Institute for Applied Systems Analysis, and Population Reference Bureau. Micklethwait, J. and Wooldridge, A. (2000) A future perfect: The challenge and hidden promise of globalisation. New York: Crown. Murdoch, L. (2005) Graduate prospects: Financial services sector. Briony Chown (Ed.). Sheffield: Association of Graduate Careers Advisory Services (AGCAS). Securities and Investment Institute (2007) Website. Available from: [Accessed 26 April 2007]. Stiglitz, J.E. (2002) Globalisation and its discontents. London: Allen Lane. Wooldridge, A. (2006) "The battle for brainpower: Survey on talent". The Economist, 7 October, pp. 1-18. Table 1: Competencies and Qualities of a Financial Advisor 1. Professional competence: I want to be updated in my profession, practicing creativity so as to provide elegant and practical solutions to problems I will face. My know-how will help me gain the trust of my clients and those who work with and for me. 2. Manners and Bearing: This includes becoming someone who shows confidence, a professional who is elegant in dress, speech, and behaviour. 3. Language: I can communicate with people from all walks of life, from the ordinary man or woman in the street, the manual and office workers, professionals, executives, intellectuals, and rich tycoons. I need to be cultured and learned so I can carry on a conversation when attending social events. I must learn how to listen. 4. Tactfulness: I will not be afraid to say the truth in everything, especially when I am selling products to clients. I must be ready to correct those who commit mistakes, with their good and that of the institution where we work in mind. 5. Positive thinking and optimism: I will see everything as an opportunity to do good for others and to make money in the process. Every problem is a challenge with a solution, and I will not stop until I find it. 6. Courtesy: I will command the respect of others because I know how to respect them. 7. Decisiveness: I can make decisions when called for, so that problems will not worsen and add unpleasantness to other people's lives. 8. Initiative: I will practice creativity in my work, finding solutions where there are none, not afraid to try new things and to think out of the box. 9. Loyalty: I will be supportive to my employers, co-workers, and future employees. I will help them to the best of my ability, knowing that their success is also mine. 10. Sense of Responsibility: I will admit mistakes that I commit and try my best to fix them, and follow the orders of superiors unless they are illegal or immoral. 11. Concern for clients: I will look after my clients and not betray their trust by taking care of funds entrusted to me for management. I will be sensitive to their needs and their welfare. 12. Grace under pressure: I will not give up when work pressure becomes threatening. I will know how to take care of myself mentally and physically so I can cope with the enormous burden of work. 13. Discipline and courage: I will not be afraid to defend myself against those who will try to destroy me. Office politics can be dirty, and I will learn how to cope with it. 14. Hard work: I will do my best in whatever I do, avoiding becoming a perfectionist that paralyses action, but doing my work so as to delight and satisfy my clients and superiors. I will not be a workaholic. 15. Leadership: I hope to be one of the leaders in the industry, someone that people would want to work for and with, the head of a firm that people would trust. [Sources: FSA, 2007; FSSC, 2007; IFS, 2007; Learndirect, 2007; SII, 2007] Table 2: Professional Requirements of a Financial Advisor Financial advisors are governed by the Code of Practice of the Financial Services Authority (FSA) and must seek FSA approval before they can engage in any regulated activities, such as investment advice. Financial advisors must act in an impartial and ethical manner, or their approval could be withdrawn. Working hours vary depending on whether one is tied or an independent advisor, and depending on the employer. Most have eight-hour workdays, but they have to be ready to work on weekends and late nights to meet clients and attend socials to market products and advise. Though most work from an office, many do travel and some work at home. There are no set entry requirements for financial advisors. Trainee financial advisors should have a strong customer service and sales background in financial services. They need to complete relevant financial advice qualifications through continuous training and meet the compliance standards set by the FSA. There is no set academic or age requirement for advisors and relevant financial advice qualifications can be used for direct entry into the profession. Apprenticeships are available in providing financial advice but professional qualifications must also be attained. Financial advisors need to be authorised by the FSA and must abide by rules designed to protect customers. Employers usually request that advisors have a benchmark financial advice qualification approved by the Financial Services Skills Council (FSSC). Prospective financial advisors can choose between the professional bodies of the Institute of Financial Services (IFS), the Chartered Insurance Institute (CII) or the Securities and Investments Institute (SII) to gain accreditation. Most get the IFS Certificate in Financial Advice (CeFA). Since financial advisors need to maintain competence by completing Continuing Professional Development to keep up to date with regulations and new products, they can widen their portfolio of financial advice skills by completing further qualifications with either the CII or the IFS. Any company selling financial products such as a bank, building society or an IFA can employ advisors and analysts. With experience, they can be self-employed. The financial services sector has grown quickly since the mid 1980s. Financial advisors with either a Certificate in Financial Planning or an AFPC can become members of the Personal Finance Society (a member of the CII Group). They need to abide by a professional code of conduct and can develop through conferences, seminars and workshops. Financial advisors can move into management positions or into training or marketing. There are opportunities for experienced advisors to work for banks, building societies or insurance companies dealing with compliance, which means making sure the firm follows the guidelines and standards laid down by regulatory bodies as well as their own. Salaries can either be based upon fees or commission. Independent financial advisors must offer the option of being paid a fee, rather than by commission, if the client requests it. Basic salaries range from around 18,000 to 25,000 plus commission. Salaries including OTE (on target earnings) may be between 40,000 and 50,000 a year. However, these are based upon performance and hitting sales targets and are not guaranteed. Very successful financial advisors earn up to 100,000 a year. A salary package may also include car allowance, insurance and pension benefits. [Sources: FSA, 2007; FSSC, 2007; IFS, 2007; Learndirect, 2007; SII, 2007] Table 3: Personal and Career SWOT Analysis Strengths Weaknesses Computer-literate Good at numbers Good communication skills Leadership skills Able to work hard Acceptable level of good manners and bearing Loyal to my friends and co-workers Responsible in meeting deadlines Dependability Courageous and disciplined Ambition to be professionally competent Must improve listening skills Impatient to get things done Poor ability to show grace under extreme pressure Show concern for others I have no business working with Sense of initiative needs improvement Decisiveness can also grow with time Always thinking of worst case scenario; need to be more optimistic Say what I think Opportunities Threats Apprenticeship at a London-based bank Mentoring from friends and relatives in the business Career opportunities are growing Market for financial advisors is expanding Social activities might affect my work Poor health and sickness Off-shoring of financial advisory or analyst jobs Read More