Managing money and achieving personal financial goals is far from simple. People often struggle to make the right money moves and to balance the need to monitor the markets with their ongoing household and career-related mental load.
Financial advisors and investment professionals help people achieve their financial goals, such as establishing adequate savings for comfort during retirement or setting aside adequate sources to provide ongoing financial support for loved ones or charitable causes. Professionals hoping to help others reach their financial goals must secure licensing from the state. That process can be relatively complex.
Businesses and individuals are subject to strict rules
Professionals hoping to manage financial resources and provide investment support to clients generally need to register with the state. Individual professionals providing financial support and investment guidance also need to secure individual licensing from the state.
To do so, they have to pass a background check. Those convicted of certain types of financial crimes, such as fraud, may not be eligible for licensing. Additionally, the state imposes minimum wealth standards on financial advisors.
The degree of control that an investment advisor has over the assets that belong to clients can influence the minimum personal wealth required. A minimum of $10,000 in resources is generally necessary for people to act as financial advisors, and they may need proof of more assets in some cases.
Licenses are constantly vulnerable
After securing a license to work as a financial advisor, professionals must diligently ensure that they comply with the law and uphold their obligations to their clients. Licensed professionals convicted of significant criminal violations could be at risk of disciplinary action and license revocation.
Client complaints and allegations of unethical practices or professional incompetence could also trigger investigations and disciplinary efforts. Financial professionals need to ensure that they consistently monitor the markets, proactively communicate with their clients and uphold their obligations when providing guidance related to investments and other major financial choices.
Those worried about possible licensing penalties due to a client controversy or pending criminal charges may need help preserving their professional licensing. Partnering with an attorney can help people understand their obligations as licensed professionals and respond when they’re facing disciplinary action.