How to Become a Financial Advisor in 6 Steps

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If you’re good with money and enjoy helping people, you may be interested in becoming a financial advisor. Multiple paths exist to becoming a financial advisor, with numerous certifications and specialties to choose from. If you’re switching careers or just graduated from college, there is a clear way to start working in this field. If you’re interested, here are six steps on how to become a financial advisor.

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Step 1: Understand What a Financial Advisor Does

A financial advisor provides advice on managing your finances in exchange for payment. Advisors can have various certifications that qualify them to recommend financial products and give advice on building wealth. A financial advisor will generally help you save more, plan for retirement and help you invest while managing risk.

The first step in becoming a financial advisor is simply understanding the scope of the profession. Do your research on what the role entails and how it can differ depending on the background and area of focus for the advisor. If you know any advisors, ask them about the position to get a good idea if it’s right for you.

If you don’t know anyone in the profession, start networking with advisors in your area. Check out our list of top advisors by state and start reaching out.

Step 2: Get an Internship or Job

To become a financial advisor, you should join a financial advisory firm or work with a single financial advisor. This is the next step in your career.

Joining a firm in a support role or working with an advisor will help you gain experience and knowledge in the field. This experience may prove valuable as you progress in your career and potentially become a full-time advisor.

An internship can be a great place to start, especially if you’re still in school. Relationships you form while interning may lead to a full-time job after school or great professional references.

If you’re looking for a job, target firms that will pay for you to get licensed. You may not need to have any experience in finance, either. A lot of firms are looking for people with sales backgrounds to sell their services, so if you have that experience, emphasize it. However, they may give you the on-the-job training you need if you don’t have sale experience.

Step 3: Choose What Type of Financial Advisor You Want to Be

Thinking there’s one type of financial advisor is like thinking there’s one type of doctor. The truth is that different advisors specialize in different areas of finance. Still, you’re likely to see two common titles between financial advisors: investment advisors and financial planners.

Investment Advisors: Registered Investment Advisors (RIAs) are professionals that help you pick and manage your investments. They’re focused on providing you an investment strategy to meet your goals and manage your risk. They are registered with the U.S. Securities and Exchange Commission (SEC) and must act in your best interest by law.
Financial Planner: A certified financial planner (CFP®) takes a more holistic approach. While a CFP® can offer investment advice, they also offer services like budgeting, retirement planning and inheritance planning. All CFP®s are fiduciaries and must act in your best interest.

Step 4: Obtain Necessary Licenses and Certifications

You may be wondering: “How do I become a certified financial advisor?” Luckily, there’s no formal certification process required to enter the profession.

Certain activities, such as buying and selling securities, require specific licenses though. FINRA issues these licenses upon passing exams. Let’s go over some of the major licenses that a financial advisor may purse:

Series 3 License: You need this license to sell commodities futures.
Series 7 License: This license allows you to become a stockbroker or security trader, and it’s required that you work at a FINRA member firm to acquire the license.
Series 63 License: If you want to sell securities, you need the Series 63 License.
Series 65 License: This is the license you must have to make recommendations and manage client investments.
Series 66 License: The Series 66 is a combo of Series 63 and Series 65. It allows you to sell securities and manage your client’s portfolio.

On top of these licenses, if you want to advance your career, you’re going to want to become a CFP®. The CFP® certification requires four parts, also known as The 4 E’s:

Education: You must hold a bachelor’s degree (or higher) in any discipline and complete a CFP® Board Registered Program course.
Exam: You must pass the CFP® exam, which is 170 multiple-choice questions administered in a day with two three-hour sessions.
Experience: You need a minimum of 6,000 hours of related professional financial planning experience or 4,000 hours of apprenticeship experience under a CFP® professional.
Ethics: You’ll be required to sign an Ethics Declaration and the CFP® Board will conduct a background check.

Step 5: Build Your Clientele

Building relationships with clients is the key to your success. You need to make connections and foster them with excellent service. Up until this part in the process, you’ve been building your knowledge. Now is when you get to use that knowledge and experience to help others.

Marketing is a key component of building your client base, and with it, your book of business. Advertising, brand development and hosting free workshops and educational events are all ways to get your name out there and potentially generate new leads for your business. You may even consider identifying niche markets or demographics that you’d like to target, including people in certain professions or age groups. Cold-calling, getting referrals from current clients and paying for leads are also ways to connect with prospective clients.

On top of focusing on your clientele, make connections with other people in adjacent businesses. Connect with a tax accountant or a real estate agent and refer clients to that professional. Down the road, they may be inclined to return the favor and refer clients to you, too.

Step 6: Continue Your Education

If you haven’t noticed by now, being a financial advisor means you need to constantly stay educated. You better love learning. Regulatory requirements will make it obligatory for you to maintain certain licenses with additional education and exams.

Along with regulation, education is a great way to grow your career. For example, you could go on to become a chartered financial analyst (CFA) to increase your ability to analyze investments. This new title can then be marketed to attract clients with different needs.

The CFP® designation is highly respected among advisors, especially those who provide financial planning services. CFP® professionals also make 12% more than other financial planners, according to a CFP® Board’s 2023 Compensation Study.

Here’s a look at other financial certifications that you may consider pursing:

Certified personal accountant (CPA): CPAs have expertise in accounting and tax preparation, making them valuable resources for advisory clients who need help with tax planning. To become a CPA, a candidate must pass a four-part, 16-hour-long exam and fulfill an education requirement.
Chartered financial consultant (ChFC): Designed as an alternative to the CFP® credential, ChFC designation demonstrates a comprehensive grasp of financial planning. To get the credential, you need to pass eight courses – each with their own exams – from the American College of Financial Services.
Chartered financial analyst (CFA): Professionals who hold the CFA designation are experts in financial analysis, having passed three levels of exams administered by the CFA Institute. The CFA credential is viewed as one of the most prestigious designations a financial professional can hold and rigorous to earn.
Chartered retirement planning counselor (CRPC): Advisors who receive the CRPC credential are retirement planning experts. They’ve learned the ins and outs of income planning, estate planning and strategies for saving for retirement.
Certified investment management analyst (CIMA): The CIMA designation is especially valuable for advisors who manage investment portfolios or offer investment advice to high-net-worth individuals and/or institutional clients. CIMAs develop an expertise in asset allocation, risk management, performance monitoring, among other investment-related topics.

Bottom Line

If you want to know how to become a financial advisor, know that there are multiple routes. While we’ve outlined six steps for you here, the truth is that your path may not follow this exact plan. What’s important is that you start down the path and find the right way for you. Speak to as many financial advisors as you can and get their advice about how they got started. This could spark the path that fits your workstyle.

Tips for Becoming a Financial Advisor

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The most important qualification to look for in a financial advisor is adherence to fiduciary duty. A fiduciary advisor is legally bound to act in their client’s best financial interests. Learn how you can exhibit this fiduciary duty as a financial advisor.