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Although many financial planners have undergraduate degrees in finance and economics, one can become a financial planner with an accounting degree. Financial planners help people from all walks of life to plan for their ideal futures by creating detailed budgets based on financial analysis and recommending a variety of financial products like mutual funds and insurance policies. While investment advisors are only expected to give investment advice, financial planners provide comprehensive financial counseling and information for retirement, estate, employee benefits and tax planning, according to Bankrate. Here are some reasons why accounting degrees benefit financial planners, some useful certifications for financial planners and ways that they can keep their knowledge current and relevant.
How Accounting Is Used Within Financial Planning
Accounting degree programs instruct students about the generally accepted ways of keeping track of a client’s money. Courses that focus on financial analysis and reporting are categorized as part of the financial accounting discipline. This type of accounting requires students to develop strict attention to detail, organizational skills and analytical abilities. Other course topics promote the use of a client’s financial information to give strategic planning advice, and these topics come under the area of managerial accounting. For example, students learn the financial equations needed to calculate the future value of money and the present value of assets like annuities. This information is used to determine which investment products are right for clients at different stages in their financial lives. Financial planners who have mastered the elements of both financial and managerial accounting can correctly identify a clients’ financial situation as well as make recommendations for investments based on quantitative analysis. Additionally, most projects that are completed within accounting degree programs are designed to hone the communication skills of accounting students so that they can explain complex financial topics in lay person’s terms.
Beneficial Certifications and Licenses for Financial Planners
One of the most recognized professional certifications in the financial services industry is the certified financial planner (CFP) designation. The CFP verifies that a financial planner is knowledgeable in all aspects of financial planning, and the CFP Board of Standards administers the CFP exam and confers the designation on applicants. CFP holders must do continuing education activities and adhere to the ethics policies of the CFP Board of Standards to maintain their CFP credentials. A good deal of advice that financial planners give relates to tax planning, and accounting degree holders who want to further their knowledge and credibility about tax preparation and planning do well to earn their certified public accounting (CPA) licenses. Besides providing broader career opportunities to business professionals who have an accounting background, the CPA designation verifies the holder’s extensive tax knowledge in both theory and practical application.
Professional Development Through Continuing Education
Financial planners keep their knowledge leading edge through participation in a number of professional development activities. These activities could include taking classes, attending finance related workshops and perusing the most current journals and publications in the financial service industry. The most convenient way for financial planners to gain access to these activities is through active membership in one or more of the industry’s professional associations like the National Association of Insurance and Financial Advisors, the Society of Financial Service Professionals and the Association for Financial Professionals.
Related Resource: MBA in Accounting Jobs
Conclusion
Sound financial and accounting knowledge are the primary keys to the success of all financial planners, but interpersonal skills are also highly valued within the profession. According to labor analysts for the financial service sector, a significant portion of financial planners’ jobs involve selling various financial products to their clients. Subsequently, financial planners must cultivate the trust of their clients through the expert use of people skills. The main reasons why one can become a financial planner with an accounting degree are that most accounting programs allow students to gain thorough knowledge of financial theory and accounting principles while they hone written and verbal communication skills.