Considering a career change? Financial advising offers the opportunity to help people achieve their financial goals while building a sustainable practice. This career combines analytical skills with client relationships, making it suitable for people who want to work directly with individuals and families on their financial planning.
If you’re interested in becoming a financial advisor, here’s what you need to know to get started.
1) Understand the Educational Requirements
You’ll need a solid grasp of financial concepts to advise clients effectively. While a finance or accounting degree can provide this foundation, it’s not always required. Many successful advisors come from different educational backgrounds and develop their financial knowledge through:
- Finance or economics coursework
- Self-study programs
- Industry training programs
- Professional designation courses
What matters most is that you can demonstrate competency in investment principles, tax basics, retirement planning, and risk management. Your clients will expect you to explain complex financial concepts in clear terms and apply them to their specific situations.
2) Choose Your Advisory Model
Financial advisors work under different business models, and your choice will affect your licensing requirements, compensation structure, and the services you can offer.
Common models include:
- Broker-dealer representatives who earn commissions on product sales
- Registered Investment Advisors (RIAs) who charge fees for advice
- Insurance-based advisors who focus on insurance products and planning
- Hybrid advisors who combine multiple compensation models
Research each model to understand which aligns with your strengths and how you want to serve clients. Some firms provide more training and support for new advisors, while others offer more independence.
3) Obtain Required Licenses and Registrations
Licensing requirements depend on the services you’ll provide and where you’ll work.
Most financial advisors need:
- Series 7 (General Securities Representative) if selling securities through a broker-dealer
- Series 63 or Series 66 for state securities registration
- Series 65 if working as an investment advisor representative without Series 7
The Financial Industry Regulatory Authority (FINRA) administers these exams. You’ll need sponsorship from a firm to take the Series 7, but you can take the Series 65 independently.
If you’ll sell insurance products, you’ll also need state insurance licenses. Requirements vary by state and product type.
4) Consider Professional Certifications
While not mandatory, the Certified Financial Planner (CFP) certification is widely recognized and can help you attract clients. The CFP requires:
- Completing education requirements
- Passing a comprehensive exam
- Meeting experience requirements
- Adhering to ethical standards
Other certifications like Chartered Financial Analyst (CFA) or Chartered Financial Consultant (ChFC) can demonstrate specialized expertise, but they’re not necessary when starting out.
5) Stay Current With Industry Changes
Financial regulations, tax laws, and investment products change regularly. You’ll need to maintain your knowledge through:
- Continuing education requirements for your licenses
- Industry publications and research
- Professional conferences and workshops
- Networking with other advisors
Most licenses require annual continuing education credits. Track these requirements carefully to maintain your credentials.
6) Build Your Client Base and Referral Network
Your success depends on attracting and retaining clients. Most new advisors start by:
- Connecting with existing contacts who might need financial guidance
- Building relationships with professionals who serve similar clients (CPAs, attorneys, real estate agents)
- Joining local business organizations
- Providing educational content that demonstrates your expertise
Referrals from satisfied clients and professional contacts typically become your most reliable source of new business. Focus on delivering clear value and maintaining strong relationships.
Getting Started
Becoming a financial advisor requires proper licensing, ongoing education, and relationship-building skills. The path varies based on your background and chosen business model, but most advisors spend 3-6 months completing initial licensing requirements.
Start by researching firms in your area to understand their training programs and support systems. Many established firms provide structured paths for new advisors, including study materials for licensing exams and mentorship opportunities.
The financial services industry continues to adapt to changing regulations and client expectations, so approach this career with a commitment to continuous learning and professional development.
