How Do I Become an Index Fund Advisor?

Index fund advisors are financial advisors who specialize in index funds, a type of mutual fund. Most candidates for the position of index fund advisor will take the same path as most financial advisors. Prior to obtaining professional certification, some people obtain a college degree in business, accounting, or finance. Prior to pursuing certification, you may need to gain experience in financial planning.

Index funds differ from other investments in that they tend to have lower risk, are less expensive, and model their fund selection after certain exchange indexes, such as the NASDAQ exchange in the United States. An index fund’s returns will typically be close to or equal to the modeled exchange’s average return. For example, if the value of the NASDAQ rises 12% over 30 years, the index fund whose portfolio is based on that exchange will rise 12% over the same time period.

Professional training is one of the requirements for becoming an index fund advisor. After an introductory period, financial advisors are usually responsible for building their own client bases. Some people choose to work for banks or brokerage firms that offer professional licensure training and sponsorship. Others choose to work for insurance firms or start their own company.

Depending on the type of employer, the educational requirements to become an index fund advisor may differ. Some larger investment firms may not require certification prior to training, but candidates with a college degree in a related field may be preferred. Others may look for candidates who have worked in the financial sector, such as as a bank teller, personal banker, or accounting clerk.

Getting experience at a larger banking institution or investment firm is a good way to become an index fund advisor. Two or more major firms are usually present in countries with major world market exchanges. Some of them hire recent college graduates or those seeking a career change with practical experience. While taking courses and obtaining trading licenses, new financial advisors are usually paired with experienced personnel.

Not everyone who aspires to be an index fund advisor begins with index funds. After specializing in other types of mutual funds or securities, he may branch out. Advisors who start their own businesses can sell index funds and other investment options. Insurance agents may offer them through the company they represent, but they do not specialize in investment products.