The Steps to Become a Financial Advisor

What you need to do to become a financial advisor

Becoming a financial advisor requires passing a licensing exam, which is the legal requirement that separates advisors from people who simply talk about money. The most common path is to pass the Series 7 exam (for general securities) or the Series 65 exam (for investment advisors), sponsored by FINRA or the SEC. You do not need a specific degree, but most advisors have a bachelor's degree in any field, and many employers require it before they will sponsor you for licensing. After passing your exam, you register with the SEC or your state, depending on the type of advisor you become and how much money you manage.

The timeline from starting to licensed advisor is typically six months to two years, depending on how quickly you pass your exams and whether you already have a job lined up. Most people study for their licensing exam while working at a brokerage, bank, or advisory firm that pays for the exam and training. You cannot sit for the exam without a sponsoring firm, so finding employment comes before the exam, not after.

Key Takeaways

• You must pass a FINRA or SEC licensing exam (Series 7, Series 65, or Series 63) and register with a broker-dealer or investment advisor firm before you can legally advise clients on securities.
• Most employers require a bachelor's degree and will not sponsor you for licensing without one, though the degree does not have to be in finance.
• A sponsoring firm pays for your exam fees and training materials, so you typically find a job first and then study for the exam while employed.
• After passing your exam and registering, you can begin advising clients, though many advisors pursue additional certifications like the CFP to build credibility.
• Different exam paths exist depending on whether you want to sell securities (Series 7), manage investment accounts (Series 65), or work in a specific role like options trading (Series 4).

The licensing exams and what they cover

The Series 7 is the most common entry point and covers general securities knowledge: stocks, bonds, mutual funds, options, and the rules that govern selling them. The exam has 125 questions and you have three hours and 45 minutes to complete it. Most people study for four to eight weeks before sitting for it. You take it at a testing center run by Prometric, and you receive your score immediately after finishing.

The Series 65 is for advisors who manage client money directly rather than just selling securities on behalf of a firm. It covers investment theory, tax considerations, and the fiduciary duty you owe clients. It has 130 questions and a three-hour time limit. Many advisors take the Series 7 first, then add the Series 65 later as they move into advisory roles.

The Series 63 is a state-level exam that most states require in addition to either the Series 7 or 65. It covers state securities laws and regulations. It is shorter (60 questions, 75 minutes) and easier than the other two, and most people pass it on their first try after passing the Series 7 or 65.

You cannot sit for any of these exams without a sponsoring firm. When you get hired, your employer registers you with FINRA and pays the exam fee (usually $200 to $300). The firm also provides study materials, and many offer paid study time during your first weeks on the job.

Education and degree requirements

A bachelor's degree is required by most major firms before they will hire you as an advisor trainee. The degree does not have to be in finance, accounting, or economics — employers hire advisors with degrees in English, history, biology, and other fields. What matters is that you have the degree itself, not the subject. Some smaller firms or independent advisors may hire without a degree, but this is uncommon and limits your options.

If you do not have a degree, you can sometimes substitute work experience. A few firms will sponsor someone with five to ten years of relevant experience (such as banking, insurance, or accounting) even without a degree, but this is rare and you should expect to face barriers when moving between firms later.

Beyond the bachelor's degree, many advisors pursue the Certified Financial Planner (CFP) credential after they are licensed and have some work experience. The CFP requires passing an exam, meeting education and experience requirements (typically three years of full-time financial planning work), and agreeing to a code of ethics. It is not required to work as an advisor, but it signals to clients that you have met a professional standard and it often leads to higher pay and more clients.

Finding a sponsoring firm and getting hired

You need a job at a brokerage, bank, investment advisory firm, or insurance company before you can take your licensing exam. These firms sponsor you, meaning they register you with FINRA or the SEC and pay your exam fees. Without a sponsoring firm, you cannot sit for the exam at all.

Most entry-level positions are titled "Financial Advisor Trainee," "Advisor Associate," or "Client Service Associate" and are posted on job boards like Indeed, LinkedIn, and the careers pages of major firms. Large brokerages like Fidelity, Charles Schwab, Edward Jones, and Merrill Lynch hire many trainees each year. Regional firms and independent advisory practices also hire, though they may have fewer openings.

When you apply, be honest about your licensing status. Say you are willing to pursue licensing and that you understand the exam is a condition of employment. Most firms expect this and will not hold it against you. During your interview, they may ask why you want to advise clients and whether you understand the responsibility involved. They are looking for people who take the role seriously, not people chasing a paycheck.

Once hired, your firm will tell you which exam to take (usually Series 7 or Series 65, depending on the role) and when they expect you to pass it. Most firms give you two to four months to study and pass, though some are more flexible. You will study on your own time, often using materials provided by your firm or purchased from test prep companies like Kaplan or Wiley.

Passing your exam and registering

Study materials for the Series 7 and Series 65 are widely available. Your firm may provide them, or you can buy them from test prep companies. Most people use a combination of textbooks, online courses, and practice exams. The practice exams are the most important part — they show you the format and difficulty of the real test and help you identify weak areas.

On exam day, you go to a Prometric testing center, bring a valid ID, and sit for the exam on a computer. You cannot bring notes, calculators, or phones. The testing center provides scratch paper and a pen. You receive your score immediately after finishing, and your firm is notified within a few hours.

If you pass, your firm registers you with FINRA (if you took the Series 7) or the SEC and your state (if you took the Series 65). This registration is called your CRD record (Central Registration Depository) and it is a public record that clients can search to verify your license and check your disciplinary history. Registration usually takes one to two weeks.

If you fail, you can retake the exam. Most people who fail pass on their second attempt. Your firm will likely require you to pass within a certain timeframe (often 90 days) or they may end your employment, though this is uncommon if you are making a genuine effort.

Starting your career and building your practice

Once licensed, you begin advising clients. Your first clients often come from your firm's existing book of business — clients who need an advisor or whose current advisor is retiring. You may also build your own client base by networking, asking for referrals, or cold-calling prospects, depending on your firm's culture and your role.

Your compensation as a new advisor varies widely. Some firms pay a salary plus commission on the products you sell. Others pay commission only. Some pay a salary while you build your book of business, then transition to commission. Ask about compensation structure during your interview, because it affects how quickly you can earn money and how much risk you carry.

Many advisors stay at their first firm for two to five years, then move to another firm as they build experience and a client base. Moving firms is common in this industry and is not viewed negatively, though you should understand your firm's non-compete agreement before you sign it. Some agreements restrict where you can work or whether you can contact your clients if you leave.

Additional certifications and specializations

After you are licensed and working, you can pursue additional credentials that signal expertise in specific areas. The CFP (Certified Financial Planner) is the most respected and requires passing an exam, meeting education and experience requirements, and committing to a code of ethics. It typically takes three to five years of work experience before you are may be able to access to sit for the CFP exam.

Other certifications include the CFA (Chartered Financial Analyst), which focuses on investment analysis and is more technical than the CFP; the ChFC (Chartered Financial Consultant), which is similar to the CFP but requires different coursework; and the CPA (Certified Public Accountant), which is useful if you want to focus on tax planning. None of these are required to work as an advisor, but they can help you attract clients and command higher fees.

Frequently Asked Questions

Do I need a finance degree to become a financial advisor?

No. Most firms require a bachelor's degree in any field, but the subject does not matter. Employers care that you have a degree and that you can pass your licensing exam. Many successful advisors have degrees in liberal arts, engineering, or other fields unrelated to finance.

How long does it take to become a financial advisor?

The fastest timeline is about six months: find a job, study for four to eight weeks, pass your exam, and register. Most people take one to two years because they study while working and may not pass on their first attempt. After licensing, it typically takes three to five years of work experience before you can pursue the CFP credential.

Can I become a financial advisor without a bachelor's degree?

Most major firms require a bachelor's degree before hiring you. A few smaller firms or independent practices may hire based on work experience, but this is uncommon. If you do not have a degree, your options are limited and you may face barriers when changing firms later.

What is the difference between the Series 7 and Series 65?

The Series 7 qualifies you to sell securities (stocks, bonds, mutual funds) on behalf of a brokerage firm. The Series 65 qualifies you to manage client money directly as an investment advisor. Many advisors take the Series 7 first, then add the Series 65 as they move into advisory roles. Some advisors only need one or the other, depending on their job.

How much do financial advisors make?

Compensation varies widely depending on your firm, location, and how much client money you manage. Entry-level advisors at large firms often earn a salary of $30,000 to $50,000 plus bonuses. As you build your client base, your income can grow significantly, but it depends on how much money you manage and what fees you charge. Commission-based advisors earn more if they sell a lot, but earn nothing if they do not.