The Steps to Become a Financial Advisor
What you need to do to become a financial advisor
Becoming a financial advisor requires passing a securities exam, getting licensed by your state or the SEC, and working for a registered firm. The timeline is typically six months to two years from start to your first client, depending on which license you pursue and how quickly you study and find employment. Most advisors start by passing the Series 7 or Series 65 exam, registering with a broker-dealer or investment advisory firm, and then building a client base.
The path splits based on what you want to do. If you plan to sell stocks, bonds, mutual funds, or other securities directly to clients, you need a Series 7 license and work for a broker-dealer. If you plan to manage money or give investment advice without selling specific products, you need a Series 65 license and work for a registered investment advisor. Some advisors get both licenses to do both things.
Key Takeaways
- You must pass a securities exam (Series 7, Series 65, or Series 63) and register with either the SEC or your state's securities regulator before you can advise clients or sell investments.
- Most advisors work for a broker-dealer or registered investment advisor firm rather than starting solo, because the firm handles regulatory compliance and client accounts.
- A bachelor's degree is not legally required, but most firms hiring advisors prefer one, and some positions require it.
- After licensing, you need to build a client base, which typically means cold calling, networking, or inheriting clients from a departing advisor.
The Series 7 exam for selling securities
The Series 7 is the General Securities Representative Exam, run by FINRA (the Financial Industry Regulatory Authority). It covers stocks, bonds, mutual funds, options, and how to sell them to clients. The exam is 225 questions, takes six hours, and costs about $315. You need a score of at least 72 percent to pass.
To sit for the Series 7, you must be sponsored by a broker-dealer — a firm registered to sell securities. You cannot take the exam on your own. Most people study for four to eight weeks using textbooks, online courses, or prep companies like Kaplan or Wiley. The exam covers product knowledge (what bonds and mutual funds are), regulations (what you can and cannot tell a client), and sales practices (how to document a trade).
After you pass, you are registered as a General Securities Representative. You can now sell securities to clients under your firm's supervision. Most entry-level advisors at large firms like Fidelity, Schwab, or Merrill Lynch start here.
The Series 65 exam for investment advisors
The Series 65 is the Uniform Investment Advisor Law Exam. It covers how to manage client money, how to charge fees, and the rules that govern investment advisors. The exam is 130 questions, takes three hours, and costs about $175. You need a score of at least 73 percent to pass.
Like the Series 7, you must be sponsored by a registered investment advisor firm to take the Series 65. You study for three to six weeks. The exam focuses on fiduciary duty (your legal obligation to put clients first), fee structures (how advisors charge), and portfolio management (how to build and adjust investment portfolios).
After you pass, you are registered as an Investment Advisor Representative. You can now manage client portfolios and give investment advice under your firm's supervision. This path is common at independent advisory firms, wealth management companies, and robo-advisor platforms.
Getting hired at a firm before or after licensing
Most people get hired first, then study for the exam. A broker-dealer or investment advisor firm will hire you as a trainee or associate, give you a study timeline (usually 60 to 90 days), and pay for the exam fee. You study while working, then take the test. If you pass, you move into an advisor role. If you fail, most firms give you one or two retakes before letting you go.
To get hired, you typically need a bachelor's degree, though some firms hire people with relevant work experience instead. You apply like any other job — through the firm's careers page, a recruiter, or a referral. Large firms like Fidelity, Vanguard, and Charles Schwab hire hundreds of trainees each year. Smaller advisory firms hire fewer people but may be more flexible on background.
Some people study and pass the exam before looking for work, which can make you a more attractive candidate. This path takes longer upfront but shows commitment and saves the firm training time.
Building your client base
After you are licensed, you need clients. At a large firm, you may inherit a small book of clients from a departing advisor or work in a call center handling inbound calls. At a smaller firm or if you want to grow faster, you typically build your own book through networking, cold calling, or referrals.
Most new advisors spend their first year or two in business development — talking to potential clients, explaining what you do, and asking for meetings. This is the hardest part of the job for many people. Some advisors specialize in a niche (small business owners, retirees, teachers) to make prospecting easier. Others work with their personal network first, then expand.
Your firm provides compliance oversight and handles the back-office work (opening accounts, processing trades, sending statements). You focus on meeting clients, understanding their goals, and recommending investments or strategies.
Education and credentials beyond the license
The Series 7 or Series 65 is the minimum to work as an advisor. Many advisors pursue additional credentials to build credibility and specialize. The most common is the Certified Financial Planner (CFP) mark, which requires passing an exam, meeting education and experience requirements, and agreeing to a code of ethics. The CFP takes one to three years to earn after you are licensed.
Other credentials include the Chartered Financial Analyst (CFA), which focuses on investment analysis and is common among portfolio managers; the Chartered Special Needs Consultant (ChSNC), for advisors working with special needs families; and the Accredited Investment Fiduciary (AIF), which signals expertise in fiduciary investing. None of these are required, but they can help you attract clients and command higher fees.
Compliance, supervision, and ongoing requirements
Once licensed, you must follow SEC and FINRA rules. Your firm assigns you a supervisor who reviews your client communications, recommendations, and trades. You cannot tell a client something that is false or misleading. You cannot recommend an investment that is unsuitable for them. You must document everything.
You also must complete continuing education each year. The number of hours varies by state and license type, but typically ranges from 4 to 16 hours annually. Your firm usually provides this training or pays for outside courses.
If you change firms, you must notify your old firm and your new firm. Your licenses stay with you, but your registrations transfer. If you leave the industry, your licenses go inactive after a period of time.
Frequently Asked Questions
Do I need a college degree to become a financial advisor?
No degree is legally required to pass the Series 7 or Series 65. However, most firms hiring advisors prefer a bachelor's degree, and some require it. If you have relevant work experience in finance, sales, or customer service, some firms will hire you without a degree.
How much does it cost to become a financial advisor?
Exam fees are about $315 for the Series 7 and $175 for the Series 65. Study materials range from free online resources to $500 or more for comprehensive prep courses. Most firms pay the exam fee and provide study materials for employees. If you study before getting hired, you pay out of pocket.
Can I work as a financial advisor without a license?
No. If you give investment advice or sell securities to clients, you must be licensed. You can discuss general financial topics without a license, but the moment you recommend a specific investment or manage client money, you need a Series 7, Series 65, or equivalent license.
How long does it take to become a financial advisor?
If you are hired by a firm first, you typically study for 60 to 90 days, take the exam, and start advising clients within six months. If you study before getting hired, add another one to three months of job searching. Building a profitable client base usually takes two to five years.
What is the difference between a broker-dealer and a registered investment advisor?
A broker-dealer sells securities (stocks, bonds, mutual funds) and earns commissions on each trade. A registered investment advisor manages money or gives advice and typically charges a fee based on assets under management. Some firms are both. The license you need depends on which one you work for.