How to Become a Financial Advisor in 6 Steps

What Estate Expenses Are Paid by the Beneficiary?

If you’re good with money and working with people, you may be interested in becoming a financial advisor. There’s more than one way to become a financial advisor, of course, and countless certifications and specialties to pursue. But whether you’re changing careers after years of working or just finishing college, there is a clear path to entering this profession. If you’re interested, read our six steps on how to become a financial advisor.

If you are looking to grow your financial advisory business once you become an advisor, check out SmartAsset’s SmartAdvisor platform.

Step 1: Understand What a Financial Advisor Does

A financial advisor is a professional who is paid to give you advice on what to do with your finances. This person can have a variety of certifications that make him or her qualified to recommend different financial products to you and give you advice on building your wealth. A financial advisor will generally help you save more, plan for retirement and help you invest while managing risk.

You need to start your step to becoming a financial advisor by understanding the scope of the role. Do your research on what the role entails and how it can differ depending on the background and area of focus for the advisor. If you know any advisors, ask them about the position to get a good idea if it’s right for you. If you don’t know anyone, start networking. Check out our list of top advisors by state and start reaching out.

Step 2: Get an Internship or Job

The next step in how to become a financial advisor hinges on getting into a financial advisory firm or working with a sole financial advisor. Whether it’s through an internship or being hired on, having your foot in the door will help you while going through the certification process.

If you’re still in school, an internship is a great place to start. Relationships you form while interning can either be turned directly into a job after school or can be great references when you look for a job.

If you’re looking for a job, look for a firm that will pay for you to get licensed. You may not need to have any experience in finance, either. A lot of firms are looking for people with sales backgrounds to sell their services, so if you have that experience, talk about it. There’s a chance they’ll give you the on-the-job training you need if you show strong sales skills.

Step 3: Choose What Type of Financial Advisor You Want to Be

Thinking there’s one type of financial advisor is like thinking there’s one type of doctor. The truth is that different advisors specialize in different areas. Still, you’re likely to see two common titles between financial advisors: investment advisors and financial planners.

Investment Advisors: Registered Investment Advisors (RIAs) are professionals that help you pick and manage your investments. They’re focused on providing you an investment strategy to meet your goals and manage your risk. They’re registered with the U.S. Securities and Exchange Commission (SEC) and are legally required to act in your best interest.

Financial Planner: A Certified Financial Planner (CFP) takes a more holistic approach. While this professional does offer investment advice, he or she will also offer services like budgeting, retirement planning and inheritance. CFPs are regulated by the Financial Industry Regulatory Authority (FINRA). If they manage clients with over $100 million in assets, they’re likely also known as wealth managers.

Step 4: Obtain Necessary Licenses and Certifications

There are a few licenses you need to be familiar with. These licenses are issued by FINRA upon passing exams. Let’s go over some of the major ones:

Series 3 License: You need this license to sell commodities futures.
Series 7 License: This license allows you to become a stockbroker or security trader, and it’s required that you work at a FINRA member firm to acquire the license.
Series 63 License: If you want to sell securities, you need the Series 63 License.
Series 65 License: This is the license you must have to make recommendations and manage client investments.
Series 66 License: The Series 66 is a combo of Series 63 and Series 65. It allows you to sell securities and manage your client’s portfolio.

On top of these licenses, if you want to advance your career, you’re going to want to become a CFP. The CFP certification requires four parts, also known as The 4 E’s:

Education: You must hold a bachelor’s degree (or higher) in any discipline and complete a CFP Board Registered Program course.
Exam: You must pass the CFP exam, which is 170 multiple-choice questions administered in a day with two three-hour sessions.
Experience: You need a minimum of 6,000 hours of related professional financial planning experience or 4,000 hours of apprenticeship experience under a CFP professional.
Ethics: You’ll be required to sign an Ethics Declaration and the CFP Board will conduct a background check.

Step 5: Build Your Clientele

Building relationships with clients is the key to your success. You need to make connections and foster them with excellent service. Up until this part in the process, you’ve been building your knowledge. Now is when you get to use it to help others.

On top of focusing on your clientele, make connections with other people in adjacent businesses. Connect with a tax accountant or a real estate agent and refer clients to that professional. This karma will be returned and you can grow your businesses together.

Step 6: Continue Your Education

If you haven’t noticed by now, being a financial advisor means you need to constantly stay educated. You better love learning. Regulatory requirements will make it obligatory for you to maintain your license with additional education and exams.

Along with regulation, education is a great way to grow your career. For example, you could go on to become a chartered financial analyst (CFA) to increase your ability to analyze investments. This new title can then be marketed to attract clients with different needs.

Bottom Line

If you want to know how to become a financial advisor, know that there are multiple routes. While we’ve outlined six steps for you here, the truth is that your path may not follow this exact plan. What’s important is that you start down the path and find the right way for you. Speak to as many financial advisors as you can and get their advice about how they got started. This could spark the path that fits your workstyle.

Tips for Becoming a Financial Advisor

If you’re wondering how to become a financial advisor, you should start by getting in contact with one. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
The most important qualification to look for in a financial advisor is adherence to fiduciary duty. A fiduciary advisor is legally bound to act in their client’s best financial interests. Learn how you can exhibit this fiduciary duty as a financial advisor.