How To Become A Financial Advisor

A skilled financial advisor is a valuable part of both individual and corporate financial teams and can help their clients make the most of their financial assets. If you like helping clients establish and work towards financial goals, you can soon be on your way to becoming a financial advisor.

Follow our step-by-step guide to become a financial advisor.



Is Financial Advising a Good Career?

There are many positions that include the responsibilities of a financial advisor. Anyone who provides financial advice, either to individuals or an organization, as part of their work can claim the title of a financial advisor. If your primary professional responsibility is in finance and you have the appropriate certifications, you have chosen a career as a financial advisor.

When considering if this is the right career for you, there are two main paths to consider: work with individuals on their personal financial goals or work with companies and organizations on corporate financial strategy.


Personal Financial Advisors

Personal financial advisors work with individuals to help plan their financial future. This can include everything from establishing upcoming financial goals (retirement, funding education, or specialty, such as retirement planners or asset management, but advise their clients on wide other) to recommending investments. Personal financial advisors often have a particular variety of financial tools.

According to the Bureau of Labor Statistics, this field is expected to grow by 7% by the year 2028, which is above the national average. Pay averages around $87,850 annually, with the top-earning personal financial advisors working in securities, commodity contracts, and other financial investments. If you enjoy working one-on-one with clients on their personal financial goals in an in-demand field, personal financial advising would make a great career for you.


Corporate Financial Advisors

Corporate financial managers often perform similar work tasks to personal financial advisors, but focus more on organizational financial planning. When considering investments, they look at company assets. They advise on a financial path that is the best fit for a secure future at their company.

The Bureau of Labor Statistics expects jobs for financial managers to grow by 16% by the year 2028, much faster than average. While the job prospects are greater, so is the level of responsibility. Corporate financial managers make around $129,890 annually, with the top earning positions in the professional, scientific, and technical services. If working in a fast-paced environment to make high level financial decisions is right for you, consider a career as a financial manager.



How To Become A Financial Advisor

Does becoming a financial advisor sounds like the path for you? You can begin this career by earning three main qualifications.


Step 1

Step 1: Earn a Bachelor’s Degree


Financial advisors almost always have a bachelor’s degree, usually in finance, business, or a related field. Many even continue to study finance as part of a Master’s in Business Administration (MBA) program. While not required to become certified as a financial planner or take other licensing exams, almost all financial services companies expect their financial advisors to have completed a four-year degree program.

What Should I Study To Become A Financial Advisor?

You can study any discipline to become a financial advisor, but the most common academic backgrounds include:

  • Finance
  • Accounting
  • Business
  • Economics
  • Mathematics

If you do not plan to major in one of these fields, you should at least take classes in these departments to make sure that you have the knowledge that you need to excel as a financial advisor. Look for classes that are available in the following areas.

  • Financial planning
  • Finance and investments
  • Estate planning
  • Taxes
  • Risk Management

Do not forget to practice writing and speaking. A large part of a financial advisor’s day is spent talking to current and potential clients, which requires strong communication and marketing skills. As a financial advisor, you can expect to meet in-person with clients to discuss their goals, craft emails to outline recommendations, and network with new individuals and companies to grow your client roster.


Do Financial Advisors Need To Complete Internships?

Internships are not required to become a financial advisor, but are an invaluable way to gain experience and build a network within the financial services industry. An internship is a great way to learn most everything about becoming a financial advisor through hands-on participation in actual financial advising.

Start by talking to your university advisor or counselor to see what partnerships already exist with companies in your area. Don’t be afraid to reach out directly to a company that you respect to see what internship opportunities are available.

Tip:

Whether you are a current student or have already completed your degree, your school’s alumni network is a great source of expertise and internship information.

Internships often lead to job offers, particularly if both you and the sponsoring organization work well together. If you are required to take certification or licensing exams, your new employer may help cover the costs of these tests. In some cases, licensing or certifications may be required to be employed by a financial services firm, company, or organization.



Step 2

Step 2: Certifications for Financial Advisors


You will likely need to take some certification or licensing exams to work as a financial advisor. The exact requirements will vary depending on your specific role within your company and if you will work with securities. These are the most common certifications and licenses for financial advisors.

  • Securities Licenses for Financial Advisors (SIE, Series 6, 7, 63, 65, 66): If you plan to market and sell securities, the Securities Exchange Commission (SEC) requires that you be licensed. This means that you must pass multiple exams and be sponsored by a firm, company, or organization that is a member of the Financial Industry Regulatory Authority (FINRA).
  • Securities Industry Essentials (SIE): This prerequisite exam covers the basics of the securities industry and is required before you are able to move on to any of the licensing exams. You are not required to be sponsored by a FINRA-member firm, company, or organization to take this test.
    • Series 6 License: This formal title of those with a Series 6 license is Investment Company and Variable Contracts Products Representative. It is most commonly obtained by insurance sales agents and financial advisors who include grouped securities as part of their offered products. You must be sponsored by a FINRA-member firm, company, or organization to register for this exam. 
    • Series 7 License: This license is required for many financial advisors. It is officially designated for General Securities Representatives. It is the most comprehensive FINRA licensing exam available and allows licensees to market and sell the widest range of securities-based products. You are required to be sponsored by a FINRA-member firm, company, or organization to register for this exam.
    • Series 63 License: This state exam is required by the North American Securities Administrators Association (NASAA). It covers the state regulations and requirements for broker-dealer representatives and is most commonly taken by those who need the FINRA Series 6 license. You do not need to be sponsored to register for this exam.
    • Series 65 License: Another NASAA exam, the Series 65 is required for investment advisor representatives. It is also a state exam. You do not need to be sponsored to register for this exam.
    • Series 66 License: This exam, known as the Uniform Combined State Law Examination, covers the material from both the Series 63 and 65. In order to have a Series 66 license, you must also have an active Series 7 license.
  • State Insurance Licenses for Financial Advisors: Insurance exams are state-specific and often administered by a third-party testing center. If you want to sell life, accident, or property insurance, you will need to be licensed in your state to do so. Research the requirements to get an insurance license in your state.

Recommended Course

For licensing exam study and preparation, StateRequirement recommends:

Additional Financial Advisor Certifications

There are additional designations and certifications available to distinguish yourself as a financial advisor who specializes in a particular area. Highly regarded certifications in the financial services industry include: Certified Financial Professional (CFP): This designation is given to those who complete the CFP Board of Standard’s program requirements.

  • Certified Financial Professional (CFP): This designation is given to those who complete the CFP Board of Standard’s program requirements
    • Bachelor’s Degree from an accredited university
    • Complete required coursework through CFP Board Registered Program
    • Pass 170-question CFP exam
    • Document 6,000 hours of financial planning experience or 4,000 hours of apprenticeship experience
    • Agree to uphold CFP Board of Standards’ ethics code
  • Personal Financial Specialist (PFS): If you want to work as a Certified Public Accountant who specializes in financial planning, you can become a credentialed as a PFS through the American Institute of CPAs (AICPA). You must be a licensed CPA, member OF AICPA, complete 75 hours of personal financial planning training, have at least two years of full-time business or teaching experience related to financial planning, and pass a PFS exam. Passing the CFP exam will waive the PFS exam requirement.
  • Certified Fund Specialist (CFS): This designation is given to those who complete a course through the Institute of Business Finance on mutual funds and similar assets that financial advisors frequently work with on behalf of their clients.
  • Chartered Financial Analyst (CFA): If you want to work in investment analysis and portfolio management, completing the education to become a CFA through the CFA Institute is a good way to gain professional expertise and demonstrate your knowledge. You will need to pass three levels of CFA exams, submit records of your academic and professional experience, submit 2-3 reference letters from financial services professionals, and complete an application.


Step 3

Step 3: Find a Financial Advisor Job


Once you have completed your required licensing exams, you are ready to begin your career as a financial advisor. You may already have an entry-level job at the FINRA-member firm, company, or organization that sponsored your required licensing exams. Finding the ideal financial advisor career path can be both fun and rewarding as you work with clients to gain experience and build your reputation in the field.


What Do Financial Advisors Do At Large Firms?

Most financial advisors begin their career at a large firm. Some names you may recognize as large national-level banks and organizations. Other firms are smaller, local companies that cater to a specific region. Either way, consider the type of work environment that you enjoy and the opportunities for growth within that firm.

As a financial advisor at a firm, you will likely spend a lot of your time meeting with clients, performing analyses, corresponding through email and phone calls, and executing financial plans with the approval of your clients. You will also need to continually work to build your professional network and bring new business to your firm.


How Can A Financial Advisor Work For Themselves?

Some financial advisors with an entrepreneurial spirit start their own businesses. This can be difficult, especially if you are new to the financial services industry. Being an outstanding financial advisor does not automatically qualify you to be an effective small business owner.

Around 25% of personal financial advisors are self-employed and the majority of those began their career at established firms. Consider taking additional classes in business or building up a strong client base before venturing out on your own. Once you are an experienced financial advisor, it may be time to make the leap to entrepreneurship and start your own firm.


How Do I Become A Registered Investment Adviser?

An investment adviser sometimes called an asset manager, investment counselor, investment manager, portfolio manager, or wealth manager, is someone who provides financial advice about securities. The term investment adviser is a specific legal designation that requires the firm or the individual (investment adviser representative) to register with the SEC.

Registered investment advisers have a fiduciary responsibility to their clients, meaning that they are legally obligated to act in the best financial interest of their clients. Financial advisors not registered with the SEC are not obligated to do so by law.

Registered investment advisers who manage up to $100 million in assets are required to register with their state. After reaching that amount, the individual or firm has the option to register with the SEC. Registered investment advisers who manage more than $110 million in assets are required to register with the SEC.



Frequently Asked Questions (FAQs)


How Do I Get Started As A Financial Advisor?

The first step to becoming a financial advisor is getting a four-year college degree. While not required, majoring in a field like finance, accounting, or business will equip you with the knowledge that you need for a career as a financial advisor.


Is It Hard To Be A Financial Advisor?

Financial advisors must be detail-oriented, good with mathematics, and effective communicators. Because you will be managing money and making financial recommendations, it is also important that you have impeccable record-keeping skills. Finally, financial advisors must be ethical and adhere to strict professional conduct standards. If these qualities come easy to you, a career as a financial advisor will be both enjoyable and rewarding.


What Is The Difference Between A Financial Advisor And A Financial Planner?

The title of a financial advisor can be given to someone working in one of many capacities, such as brokers, investment advisors, insurance agents, or bankers. A financial advisor is a more general term, which is why many financial advisors specify which licenses and certifications they have earned. Once you earn a license, certification, or designation in a particular area, this can be a great way to distinguish yourself among other financial advisors in your field.

A financial planner is someone who specializes in long-term financial strategy. Many financial planners often execute financial plans by acting as a broker-dealer as well. The Certified Financial Planner designation is governed by the CFP Board of Standards and is only given once education, experience, exam, and ethics standards have been met.



Becoming A Financial Advisor

The path to becoming a financial advisor requires academic study, professional experience, and licensing exams. One of the best ways to begin is to build a strong foundation through an undergraduate program. Once you have studied the fundamentals and gained experience through an internship, it’s time to become licensed and begin your career as a financial advisor.




Information on this page has been gathered by a multitude of sources and was most recently updated on August 2020.

Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.

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