What Do You Need To Become A Financial Planner – Ready to take that leap into one of the hottest roles in the boardroom? Regardless of your industry, there are many opportunities for aspiring chief financial officers. This fast-paced, forward-thinking, well-paid position will challenge and excite you every day.
As with all executive positions, becoming a CFO requires a commitment to long-term and careful planning along the way. We’ll help you figure out where you stand and what you need to do to accelerate your path forward while avoiding common pitfalls by making smart choices about your educational and career experience. .
What Do You Need To Become A Financial Planner
By the time you are done, you will have the foundations for your strategy to secure the desired executive position. Let’s get started!
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According to the U.S. Bureau of Labor Statistics, financial managers at every level experienced a 16 percent growth rate in their job outlook since 2018, with the rate expected to remain constant through 2028. That’s four times the national average in similar careers, such as sales managers (5 percent) or even other executive roles (6 percent).
What does a seasoned executive like the CFO get? According to Indeed, the average salary is $138,374 per year (plus benefits). However, it is possible to earn closer to $200,000 per year if you are in an area like New York City, where the demand for CFOs is very high.
The CFO is the senior financial manager responsible for overseeing and managing the financial actions of a company. Like a treasurer or financial controller, CFOs often oversee an organization’s finance or accounting departments.
However, unlike a controller, the CFO makes decisions that have an impact on the overall direction of the company. For example, a controller may review financial statements to audit them for accuracy and regulatory compliance. In contrast, the CFO reviews the same financial statements to analyze them before making recommendations to improve the company’s financial performance.
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However, you will sometimes see a CFO referred to as a top-level financial controller, where their primary responsibility lies in managing all cash flow and financial planning of an organization.
Traditionally, the CFO heads the finance or accounting department. Here, you can manage a variety of professionals, including:
However, any financial hierarchy within a company falls under your leadership. In general, if there is any planning or analysis that requires the input of an expert on financial effects, you can expect to be tapped for your advice.
Be prepared to demonstrate your flexibility, adaptability, and willingness to be proactive in supporting sustainable growth. The CFO is one of the fastest-growing executive-level positions thanks to rapid technological advances and changing expectations about the way we do business.
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But technology is not the only arena where you need to demonstrate competence. You need a variety of hard and soft skills to effectively navigate your position. You can break skills down into four different categories:
1. Leadership and management skills. Almost everything you do as a CFO involves some form of leadership. Whether it’s leading a team to implement new financial infrastructure or getting other executives on board with a plan, understanding the fundamentals of leadership is critical to success.
2. Accounting skills. CFOs are expected to demonstrate technical expertise in accounting and financial subjects. In addition, you should have a strong understanding of abstract topics that have a concrete impact on the business world, such as the time value of money.
3. Data skills. According to Deloitte, businesses increasingly expect CFOs to manage business and financial analysis, using it to make data-driven decisions. At least 18 percent of CEOs who responded to their survey believe that those responsibilities belong solely to CFOs.
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4. Strategy skills. The CFO is responsible for laying the financial foundation to help a company achieve its goals. Expect others to turn to you when the time comes to find an uncontested market place that makes competitive and financial sense.
You need a bachelor’s degree to become a CFO. The U.S. The Bureau of Labor Statistics says the most common are finance, public accounting, economics, public administration, and business administration.
A master’s degree – usually in one of the same fields – is also preferred because of the level of management you will demonstrate on a daily basis. Common master’s degrees include:
Strongly consider getting an MBA along the way. According to Russell Reynolds Associates, 62 percent of all CFOs have advanced degrees, with the majority opting for an MBA. (In addition, executives who have one can expect a salary increase of up to 16 percent, according to research at Wayne State University in Detroit.)
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However, an MBA is valuable because it increases the breadth of your business knowledge. Imagine trying to understand why a product isn’t performing well but not knowing whether it’s the product itself or the result of a failed marketing campaign.
Or, imagine leading a company in restructuring to reduce overhead and improve cost effectiveness, but suggesting a recommendation that inadvertently cuts the company’s most valuable talent.
As a financial executive, your decisions and recommendations directly affect the course and well-being of the company. An MBA can help you broaden your perspective to better contextualize your decisions within the organization.
Today, there are many different types of MBAs. Traditional MBAs can provide more hands-on guidance, while an online MBA is ideal for self-motivated people who want to work while in school. We cover the advantages of each to help you determine which path is right for you.
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MBAs are expected in today’s boardroom. So, taking your education one step further will set you apart. An Executive MBA (EMBA) is specifically designed for mid-career professionals and entrepreneurs who want to continue working full-time while developing more advanced skills.
An EMBA curriculum is slightly different from a traditional MBA because it emphasizes leadership skills and strategy in a corporate context. At the same time, you will learn everything you want in an MBA curriculum; an EMBA is clearly aimed at professionals seeking an executive position.
Technically no, but many CFOs started out as CPAs. The position requires a strong understanding of accounting, so this can give you an advantage. However, according to organizational consulting firm Korn Ferry, the percentage of CFOs who are also CPAs has fallen over the past decade. In 2014, about 46 percent of CFOs were certified public accountants. In 2019, that number dropped to 36 percent.
A chartered financial analyst shares some of the technical skills of a CPA, but a CPA usually has a stronger understanding of accounting, taxes, audits, and other skills needed by a CFO. That said, if you are a CFA, you stand the best chance of becoming a CFO by pairing your current degrees and certifications with an MBA. To take this route, look for an MBA program with a strong emphasis on accounting fundamentals to get the technical skills you need.
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If serving as a CFO is on your professional bucket list, be prepared for a long haul. According to an interview with a CFO, potential prospects usually have about 10 years of relevant background and experience before seeking the position. If you put your career planning in place early in your professional development, you can take steps to accelerate your trajectory – such as choosing a business school with a proven track record of helping students to achieve their career goals faster.
Achieving the highest financial position requires careful preparation. Whether you’re just starting out or looking to advance your career, here are some tips to help you out.
You need a bachelor’s degree. Chances are, you’ll also need an advanced degree to get you going. Pay special attention to degrees and programs that give you a solid understanding of accounting and other financial skills.
Your competition may have an MBA, but remember that not all MBAs are created equal. Explore the differences between an online MBA and an advanced EMBA right here.
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Actively choose jobs that will expand your financial experience. In addition to accounting, consider positions that feature budgeting, analysis, risk management, investing, and more. The better you are, the stronger candidate you are.
You can do this in different jobs, or you can work through a company. If the former, it is wise to stay in the same industry to deepen the experience as well. Many people also pursue a CPA license for this purpose.
You need to know more than just finances. Find opportunities to expand your customer service experience, business and operational skills, technology knowledge, and leadership skills.
Career networks can put you in touch with the right people when you’re ready to become a CFO. Join one soon to start making connections. Consider the presence of networking opportunities when you pursue your MBA or advanced degree. Some programs have career networks that you can tap into while you study.
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Did all of the above? Consider sharpening yourself with a board-readiness program. Deloitte recommends that professionals seeking an executive position attend specific board training to develop a deeper understanding of what is expected of you in the C-suite.
The Chief Financial Officer is a staple in the board room, playing a key role in keeping the company compliant and profitable. However, the route to achieving the desired task may seem confusing,
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