Path to Becoming a Licensed Money Manager: A Comprehensive Guide
Managing money is a highly regulated career, but one that allows individuals to work with and advise investors on their financial decisions. There are different types of money managers, and becoming one involves completing a rigorous set of requirements. This guide will walk you through the steps involved in obtaining a license to become a money manager.
The Different Types of Money Managers
There are primarily two types of money managers: accounting-based and stockbrokerage-based. Each comes with its own set of licensing and certification requirements. Understanding the differences between these roles is crucial in deciding which path to take.
Starting With a Degree
To embark on a career as a money manager, you must have a solid educational foundation. A bachelor's degree in either Accounting or Finance is the minimum requirement for most companies. These fields provide the necessary knowledge and skills to understand financial markets and investment strategies.
Navigating the Employment Landscape
After completing your degree, your journey to becoming a licensed money manager begins by finding a company that offers the type of role you're interested in. Both accounting-based and stockbrokerage-based firms have specific hiring processes, and your education will serve as the foundation for these processes.
Additional Requirements and Experience
In addition to a degree, many companies require additional qualifications, including relevant experience. For accounting-based roles, you might need to have experience in financial analysis or audit. In the case of stockbrokerage-based positions, knowledge of investment products and the ability to conduct client consultations are crucial.
Passing the Licensing Tests
Once you have the required education and experience, you must pass relevant licensing tests. These tests are designed to ensure that money managers have the necessary knowledge to act on behalf of their clients. The most common and rigorous test for stockbrokerage-based roles is the Series 7 exam, which is a two-hour test that screens out at least a third of test-takers.
Becoming a Fiduciary
To further protect investors, money managers are required to hold a fiduciary status. This means they must act in the best interest of their clients at all times, without considering their own financial gain. The stringent licensing and experience requirements reflect this important responsibility. Companies will also need to sponsor you for the licensing tests, adding another layer of support to your journey.
Conclusion
Becoming a licensed money manager is a complex process that involves education, experience, and rigorous testing. By following the right path and meeting all the necessary requirements, you can become a trusted advisor to investors, helping them navigate the complexities of personal finance. Start with a degree in Accounting or Finance, gather relevant experience, and pass the necessary licensing exams to open the door to a fulfilling career in this important field.