What It Takes to Become a Financial Advisor
The licenses and education you need to give investment advice
To work as a financial advisor and give investment advice to clients, you need a securities license, a background check, and a sponsoring firm. The most common license is the Series 7, which lets you sell stocks, bonds, mutual funds, and other securities. Some advisors use the Series 65 instead, which covers investment advisory services without letting you sell securities directly. You cannot get either license without passing an exam, and you cannot sit for the exam without working for a registered firm that sponsors you.
Education requirements vary by license type and by state, but no specific degree is required. Most firms hire people with a bachelor's degree in any field, then sponsor them through the licensing process. Some advisors hold degrees in finance, economics, or business; others come from completely different backgrounds. What matters to the firm and the regulators is that you pass the exam and pass a background check.
Key Takeaways
- The Series 7 license requires passing an exam and working for a registered brokerage firm that sponsors your application.
- The Series 65 license is an alternative path for advisors who want to manage money but not sell securities directly.
- A bachelor's degree is standard but does not have to be in finance; firms hire from all educational backgrounds.
- You must pass a background check and disclose any criminal history, financial problems, or regulatory violations to the Financial Industry Regulatory Authority (FINRA).
- Continuing education is required every year after you are licensed, with the number of hours depending on your license type and state.
The Series 7 license and how to get it
The Series 7, officially called the General Securities Representative Exam, is the most widely held license in the industry. It lets you sell stocks, bonds, mutual funds, options, and other securities to retail clients. To sit for the exam, you must be sponsored by a registered broker-dealer — a firm licensed to sell securities. You cannot register for the exam on your own; the firm submits your sponsorship application to FINRA, the Financial Industry Regulatory Authority, which oversees the securities industry.
The exam itself has 125 questions and takes three hours and 45 minutes. You need a score of at least 72 percent to pass. Most people study for four to eight weeks using study guides, practice exams, and online courses. The exam covers securities products, trading rules, customer protection, and how to handle client accounts. After you pass, you remain licensed as long as you work for a registered firm and complete continuing education each year.
The Series 7 does not require a specific educational background, but most firms will not sponsor you without a bachelor's degree. Some firms have their own training programs and will hire people without degrees if they show strong aptitude, but this is uncommon. Once you are hired and sponsored, the firm typically pays for your exam fees and study materials.
The Series 65 license as an alternative path
The Series 65, officially the Uniform Investment Adviser Law Exam, is a different route that focuses on managing client money rather than selling securities. If you hold a Series 65, you can advise clients on investments and manage their portfolios, but you cannot sell securities directly. This license is common among independent financial advisors and those who work for investment advisory firms rather than brokerages.
To get a Series 65, you also need a sponsoring firm — in this case, a registered investment adviser rather than a broker-dealer. The exam has 130 questions and covers investment advisory practices, fiduciary duties, and securities law. You need a score of at least 73 percent. Study time is typically four to six weeks, similar to the Series 7.
Many advisors hold both the Series 7 and Series 65, which gives them flexibility to sell securities and manage money. Some states allow you to take the Series 65 without a bachelor's degree if you have relevant work experience, though most firms still prefer a degree. The requirements vary by state, so check with your state's securities regulator.
Background checks and disclosure requirements
Before FINRA approves your license, you must pass a background check and disclose your full financial and legal history. The check includes a criminal records search, a credit check, and a review of any regulatory violations or civil judgments against you. You must report felonies, misdemeanors, financial problems like bankruptcy, and any previous disciplinary action by a regulator.
Not every issue disqualifies you. FINRA looks at the nature of the offense, how long ago it happened, and whether you have shown rehabilitation. A conviction from 20 years ago is treated differently than one from last year. Financial problems are evaluated based on whether they suggest you might mishandle client money. The firm and FINRA make the final decision on whether to approve you.
After you are licensed, you remain subject to background checks. If you are arrested, convicted, or sued, you must report it to your firm and to FINRA within a set timeframe, usually 30 days. Failure to disclose can result in your license being suspended or revoked.
Continuing education and staying licensed
Once you pass your exam and start working, you must complete continuing education every year. The number of hours required depends on your license type and your state. For the Series 7, most states require 120 hours of continuing education every three years, with at least 40 hours in the first year. For the Series 65, requirements are typically similar but vary by state.
Continuing education covers updates to securities law, new products, compliance rules, and ethics. Your firm usually provides these courses, and many are offered online. Some firms require you to complete them during work hours; others expect you to do it on your own time. If you do not complete your continuing education, your license lapses and you cannot work as an advisor until you catch up.
Other licenses and certifications you might pursue
Beyond the Series 7 and Series 65, advisors often hold additional licenses depending on what they do. The Series 63 is required in most states and covers state securities laws; many firms require it alongside the Series 7. The Series 66 combines the Series 63 and Series 65 into one exam, which some advisors take instead of taking both separately.
If you want to sell insurance products like annuities or life insurance, you need a separate insurance license from your state. These are not FINRA licenses but are issued by your state's insurance department. Some advisors hold both securities and insurance licenses to offer a full range of products.
Many advisors also pursue professional certifications like the Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA). These are not required to work as an advisor, but they signal expertise and can help you attract clients. The CFP requires passing an exam, meeting education and work experience requirements, and agreeing to a code of ethics. The CFA is more rigorous and typically takes three to four years to complete.
How to start the process
If you want to become a financial advisor, the first step is to find a firm willing to sponsor you. You can apply directly to brokerage firms, investment advisory firms, or financial services companies. Many hire entry-level people and train them through the licensing process. Look for firms that offer training programs, exam fee reimbursement, and support while you study.
When you apply, be honest about your background. Firms run their own background checks before sponsoring you, and lying on an application can disqualify you permanently. Once a firm hires you and agrees to sponsor you, they submit your application to FINRA. You will then register for your exam, study, and take the test. The entire process from hiring to passing your first exam typically takes two to four months, depending on how quickly you study and how soon exam seats are available.
Frequently Asked Questions
Do I need a college degree to become a financial advisor?
Most firms require a bachelor's degree, but it does not have to be in finance or business. You can have a degree in any field. Some firms will hire without a degree if you have relevant work experience, but this is uncommon. Check with specific firms about their requirements.
How much does it cost to get a Series 7 license?
The exam fee is around $300, but most firms pay this for you as part of hiring. Study materials and courses can cost $200 to $500 if you buy them yourself, but many firms provide these free. Your main cost is your time studying.
Can I get a financial advisor license without working for a firm?
No. You must be sponsored by a registered firm to sit for the Series 7 or Series 65 exam. You cannot register on your own. Once you are licensed and have work experience, you can start your own firm, but you need the sponsorship to get the license first.
What happens if I fail the Series 7 exam?
You can retake it. There is no limit on how many times you can sit for the exam, though your firm may have internal policies about retakes. Most people pass on the second or third attempt if they study more the second time.
Do I need to renew my license every year?
Your license does not expire, but you must complete continuing education every year to keep it active. If you stop working in the industry and do not complete your continuing education, your license becomes inactive. You can reactivate it by completing the required hours and paying a fee.