How to become a financial advisor

Financial advisors are people who guide clients toward prudent financial decisions and future savings. You must locate a business, obtain a license, and begin accumulating a book of business in order to become one. Hence this write-up focuses on how to become a financial advisor and will be a good material to guide you through the process of becoming one.


What Does a Financial Advisor Do?

Financial advisors assist their customers with retirement planning, tax management, and navigating major life milestones like marriage and childbirth. They also assist clients in creating financial strategies and goal-setting.


Responsibilities of Financial Advisors

It is the duty of financial advisors to assist their clients in achieving their financial objectives. Researching investments and tactics is one of the most crucial duties. This entails staying up to date with trends and comprehending how various assets operate. Also meeting with clients to learn about their financial conditions is another important duty.

Types of Financial Advisors

The majority of financial advisors are essentially stock brokers who possess a foundational understanding of finance and the necessary licenses to assist customers in selecting stocks and investment plans. These include investment advisors who manage customers’ investments, financial planners who assist clients in creating detailed financial plans, and analysts who research certain assets.

Here are some types of Financial Advisors:

(1) Certified financial planner (CFP): 

To become a CFP, you must complete a rigorous certification process that requires passing challenging exams. CFPs are certified by the American Institute of Certified Financial Planners (AICP) to help you build comprehensive financial plans for clients.


(2) Chartered financial analyst (CFA):

This type of financial professional has been certified by the CFA Institute to help value securities that investors buy and sell.


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(3) Registered Investment Advisor (RIA):

A Registered Investment Adviser (RIA) is a company that operates in the United States and is registered with the U.S. Securities and Exchange Commission (SEC). Employees of RIAs have the ability to make investment decisions on behalf of clients.

(4) Chartered financial consultant (ChFC):

The American College of Financial Services has qualified this type of advisor to assist clients with a variety of financial planning concerns.


Financial Advisor Licensure

The Financial Industry Regulatory Authority (FINRA) issues a wide range of various financial adviser licenses that enable advisors to offer a variety of services to clients. Although the qualifications for each license vary, they always involve passing an exam and keeping up with continuing education requirements.

Here are five licenses that can help advisors offer a wide range of services:

Series 7: 

The required licensing test for registered representatives is the General Securities Representative Qualification Examination, sometimes known as the Series 7 exam. Taking the Series 7 exam ensures one can work as a stockbroker or security trader. To take the test and obtain this license, you must be employed by a FINRA member company.

Series 6:

The Investment Company and Variable Contracts Products Representative Qualification Examination is a consolidated exam similar to Series 7 that qualifies individuals to sell mutual funds and variable annuities.

Series 63:

Most U.S. states require applicants who want to sell securities to pass the Uniform Securities Agent State Law Examination. In most states, advisors must have both this license and the Series 7 in order to offer securities.


Series 65:

Those who want to work as investment adviser representatives and advise clients on investments or handle investments on their behalf must pass the Uniform Investment Advisor Law Examination.


Series 66:

The Series 63 and Series 65 tests are combined to create the Uniform Combined State Law Examination. In most states, passing it enables one to sell securities and work as an investment advisor representative.

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How to Become a Financial Advisor

Typically, gaining credentials, passing a test, and completing industry-specific training are requirements for becoming a financial advisor. In addition, if you’re prepared for a career in finance, think about the qualifications needed to become a financial advisor and do the following steps:

(1) Get a Job

Getting a position in a company that will sponsor your licenses is the first step toward becoming a financial advisor. Some businesses hire individuals with no prior financial industry knowledge and train them to work as financial advisors. In contrast, these companies frequently seek out candidates with great sales abilities, so if you have expertise promoting goods or services, include it in your application and in the interview.

(2) Pass Necessary Licensing Exams

The first step for anyone wishing to enter the financial advisory sector is to pass the necessary license examinations. Passing the FINRA Series 7 Exam as well as additional exams specific to the goods and services you intend to sell is typically required.

(3) Undergo a Background Check

You will be required to submit to a background investigation as part of the registration process as a new financial advisor. This could take a few weeks and you could have some restrictions on what you can do while it’s going on.

(4) Build a Book of Business

Any financial advisor will tell you that developing a strong clientele is essential to success. Any financial advisor will tell you that developing a strong clientele is essential to success. A book of business is essentially your clientele—the people or organizations to whom you offer financial advice. And just like any healthy relationship, developing and maintaining a strong book of business requires effort.

(5) Stay Current with Continuing Education

Financial advisors must follow stringent business and regulatory standards after receiving their licenses in order to keep them. Completing continuous education programs and passing standard exams are a few of these requirements.

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