Financial planning is an integral process required not only in businesses but also in personal lives. Individuals hire financial planners to streamline their investments and savings such as insurance planning, retirement planning, education expenditures, etc. In businesses, financial planners are required to work with the financial statements such as balance sheets, cash flow statements, and income statements. The advancement in network infrastructure has resulted in many schools offering online financial planning degrees, which are very convenient for working professionals or individuals who are unable to travel to campuses.
Scope of Financial Planning Degrees
Students interested in financial planning degrees can opt for the quickest way into the job market through an associate degree in financial planning and services offered by various community colleges. However, students can become a certified financial planner with a bachelor or a higher degree.
Who should apply?
On-campus or online financial planning degrees are for individuals who are meticulous and detail-oriented. Proficiency with numbers is a must as financial planners have to continuously work with numbers. Moreover, they should be good at communications as they have to deal with clients and help them in organizing their financial affairs. Financial planners especially those aiming to work as investment bankers should have the ability to make decisions under pressure.
Admission Requirements and Coursework
Admission in an associate or bachelor program for financial planning requires a high school diploma or GED score. A master level program may be more competitive and require a GRE/GMAT test score besides a bachelor degree for admission. A typical bachelor program in the subject of financial planning usually consists of the following courses:
Fundamentals of Financial Planning
This course is generally a prerequisite to various other financial planning courses. Major topics covered in the course include time value of money, economic and legal environments, financial analysis,financial planning functions, and ethical and professional considerations. Students also acquire practical experience by making use of data-gathering forms, making personal financial statements, budgeting, and dealing with regulatory requirements.
Financial Planning Process and Insurance
This course helps students review basic financial planning principles and familiarize themselves with the concepts of risk management. Important topics covered in the course include risk exposure identification, insurance policy analysis, legal aspects of insurance, and employee benefits. Students also get the opportunity to gain practical knowledge of different types of life insurance policies along with medical and disability insurance, social security benefits, and property and casualty insurance.
This course trains students in learning how to assess the risk aversion of a client, tax situation, liquidity, and marketability requirements to select a suitable investment option. Key topics included in the course are regulation of markets,investment theory, financial markets,investment vehicles, and modern portfolio theory. Students also learn how to use financial calculators in order to make different financial assessments.
Income Tax Planning
This course enables students to familiarize themselves with income tax planning aspects such as tax law research process, terminology, concepts of income tax accounting, and the computation of tax. Students also learn different tax management techniques, financial planning strategies, and tax implications of employee benefits and investments. The course also covers business structure, sale of personal residence, and passive activity loss.
Retirement Planning and Employee Benefits
With the help of this course, students get familiar with personal and employer-sponsored retirement plans. Important course topics covered in the course are social security and Medicare benefits, IRAs, tax-sheltered annuities,qualified retirement plans, distribution options,taxation and income tax deduction/benefit limitations. Students also learn about qualified plans for employees, retirement needs analysis, and ways to find out suitable investments.
This course is designed to give students a sound understanding of estate planning. They learn how the federal estate system tax system works and what to keep in mind when conducting estate planning. Major topics include federal estate and gift taxation,use of trusts, life insurance as an estate planning tool,estate planning techniques, gifts, charitable transfers,intra-family business and property transfers, and planning for incapacity.
Salary and Job Outlook
According to the Bureau of Labor Statistics, the median annual salary for personal financial advisors was $67,520 in May 2012. There is a positive job outlook for personal financial advisors as their employment opportunities are likely to grow at a rate of 27 percent between 2012 and 2022, which is a lot faster than the average growth for all occupations.
The major cause of high employment growth is aging population. With the retirement of a large number of baby boomers, the requirement to seek planning advice from personal financial advisors will rise. Besides, the longer life expectancy will result in longer retirement periods and will further escalate the demand for financial planning services.
Personal financial advisors generally work for financial and insurance companies. However, many financial advisors also choose to be self employed. Following are the major industries that employ personal financial advisors:
Financial Investment activities
Credit intermediation and related services
Security and commodity contracts intermediation and brokerage
Insurance carriers and related activities
Professional, scientific, and technical services
Professional financial advisors generally work in offices, but their job can include travelling as well. They can travel to attend different conferences or to teach finance classes. The job of a personal financial advisor is considered to be relatively less stressful than other finance related occupations.