Finance---Certified Financial Planner

William W. Davis, CFP

Tell us about your work---what do you do? I am an independent Certified Financial Planner and Registered Investment Advisor . I help my clients achieve their investment objectives, usually relative to retirement . The process involves: -Development of a retirement plan, -Understanding the client's risk profile, -Formulating an investment policy statement and asset allocation strategy, -Selecting individual investments (usually mutual funds ) based on the investment policy -statement and asset allocation strategy, -Monitoring and modifying the investment portfolio over time in response to changing market conditions and client situations. What skills are needed? Broad ranges of skills are needed to work in this area. In general, strong numerical , verbal , and communications skills are desirable. An understanding of investments and the ability to market one's services are required. What was your major? I have a graduate degree in finance . How did you get started in your career? This is a second career for me. I got started by developing my credentials; i.e., obtaining a graduate degree in finance and my Certified Financial Planner credential. I built my business slowly, based initially on existing relationships. There are many ways to get started, either independently or as an employee of a firm. What experience do you need in this job? You need to develop an understanding of: -The financial planning process, -Investment selection principles and portfolio design, Describe your "typical" workday: The typical workday involves a significant amount of computer work. This work includes generating reports, reviewing client portfolios, researching and selecting various investments, monitoring the status of client portfolios, and preparing and updating retirement plans. Other work includes corresponding with clients and discussing issues both with clients and with the firm that processes my investment business. Many investment advisors try to allocate as much as 50% of their time to generating new business. What is the hardest aspect of your job? One of the most difficult aspects of my job is managing client expectations, particularly with younger clients. Over the past few years, investment returns have been quite high and downturns have been brief. If this is the client's only experience, he will naturally expect that it is the norm. But the potential for high returns is always accompanied by significant risk; i.e., loss of investment capital. This risk can be mitigated by diversification and by a long time horizon, but it cannot be eliminated. During favorable market conditions it can be difficult to show the client the advantage of working within his plan rather than becoming more aggressive. During prolonged market downturns, the client may become quite discouraged. Again, it is important to demonstrate to the client the importance of continuing with his plan, and to remind him that both his profits and his losses have been within the range of those anticipated when the plan was developed. It is also very difficult to work with a new client who is counting on retiring in a few years, but whose financial resources are simply inadequate to do so. In that case, the advisor can only point out the reality of the situation, and present some reasonable alternatives. What is the most rewarding aspect of your job? The most rewarding aspect of my job is, over time, developing the confidence and trust of clients. Some clients contact me first whenever they are confronted with any kind of financial issue, and it is gratifying to know they respect my knowledge and appreciate my advice. What are your suggestions for someone considering this field? You must, of course, decide if you really have an interest. Take a class related to investing. Read some books or magazines on the subject. Visit a few web sites and see if you find them interesting. If you start to find all of this fascinating, talk to as many people in the field as you can. The opportunities are very diverse, and not particularly obvious or easy to understand. Take additional relevant classes. Do not forget the importance of marketing and communications skills. Examine the backgrounds and skills desired by companies that are hiring. Should you decide to enter the field, I believe that at least an undergraduate degree in business or finance is necessary, and that a related credential such as Certified Financial Planner is desirable. It may be necessary to work in several areas to develop a breadth of skills, and to find the position within the field that is most attractive to you.