Becoming a financial advisor without a degree is possible, as the field offers multiple pathways that don’t always require formal education. While many financial advisors hold degrees in fields like finance or economics, it’s not a strict requirement. Some advisors succeed by earning certifications, gaining relevant work experience, and building skills in client relations and financial planning. However, to legally perform some parts of the job, such as selling insurance and securities, advisors must meet testing and licensing standards that ordinarily call for formal education.
To find a financial advisor in your area, try using SmartAsset’s free matching tool.
Who Can Call Themselves a Financial Advisor?
Not everyone can legally call themselves a financial advisor. The term “financial advisor” can be used broadly, but it’s regulated to prevent misleading consumers.
Under Regulation Best Interest (Reg BI), the U.S. Securities and Exchange Commission (SEC) enforces standards to ensure that only qualified individuals use the title “advisor” or “adviser.” Specifically, the SEC presumes that individuals affiliated with broker-dealers who are not also supervised by a registered investment advisor (RIA) firm violate the Disclosure Obligation if they use these titles. This regulation aims to prevent confusion about the role and obligations of a financial professional.
Reg BI is designed to elevate the standard of conduct for broker-dealers and associated persons when recommending securities to retail customers. Unlike financial planners or brokers, registered investment advisors (RIAs) and their representatives are held to a fiduciary duty, meaning they are legally bound to act in their clients’ best interests. By regulating the use of terms like “advisor” or “adviser,” the SEC aims to protect investors from misleading titles that suggest a higher standard of care or an advisory relationship where none exists.
Do You Need a Degree to Become a Financial Advisor?
A college degree is not an absolute requirement to become a financial advisor, though one may be required by individual advisory firms. Many financial advisors hold degrees in fields like finance, economics, or business, which can give them a head start in understanding market dynamics, investments and financial planning principles.
While some roles in the financial advisory industry do not explicitly require a college degree, some specific certifications, such as Certified Financial Planner™ (CFP®), do call for a bachelor’s degree from an accredited university. Many people working as financial advisors entered the field in a sales capacity selling insurance or securities. And it is not unusual to find an insurance agent or stock broker who does not have a four-year college degree of any kind.
However, in order to sell insurance, annuities, stocks, bonds or other investments and financial products, advisors do have to be licensed. That generally involves a significant amount of education and study, including continuing education, as well as passing examinations and maintaining good business practices.
Securities License Requirements
Securities licensing is overseen by the Financial Industry Regulatory Authority (FINRA). Among FINRA’s many duties, which include setting rules for securities transactions to prevent fraud and self-dealing, investigating transgressions and punishing rule-breakers, are administering a wide range of securities-related licensing programs.
For example, anyone who sells stocks, bonds and most other securities including options has to have FINRA’s Series 7 license. There are multiple exams for this license, covering industry regulations, risks and other characteristics of different types of investments and procedures for communicating with clients among other topics. While there is no specific educational requirement, acquiring the knowledge to pass the tests is likely to involve some hundreds of hours of study.
Financial Advisor Duties
Financial advisors perform many services other than selling investment products. These may range from budgeting to creating long-term financial strategies, planning for retirement to funding education and allocating assets to rebalancing investment portfolios. They may also assist in estate planning, making philanthropic gifts, tax planning and business succession.
Advisors often work with a number of other financial professionals, many of whom will have four-year degrees, to accomplish these tasks. For example, only an attorney can draw up trusts used in estate planning. Someone who’s completed the rigorous requirements to be licensed as a certified public accountant (CPA) is ordinarily used to prepare tax returns and provide tax advice.
Which Roles Don’t Require a Degree?
In the financial services industry, several roles don’t require a college degree, yet provide valuable entry points for those looking to become financial advisors. Positions like financial representative or client services associate allow individuals to gain practical experience in the financial world, including customer interaction and back-office support. These roles provide a great introduction to understanding how financial products work and how clients are served.
Another common starting point is a role as a broker or insurance agent. With the right licenses, such as the Series 6, Series 7, or relevant insurance licenses, individuals can begin selling financial products like mutual funds, annuities, or insurance policies. These roles don’t mandate a college degree but do require successful completion of licensing exams.
Paraplanner positions can offer a way into financial planning without a degree. Working alongside certified financial planners, paraplanners provide support by doing research, preparing documents, and assisting with administrative tasks. Over time, this role offers exposure to the intricacies of financial planning, helping build a career in the industry even without formal higher education.
Alternatively, someone can start their own financial advice business and work as a self-employed advisor with or without any prior experience in the field. A financial coach, for instance, primarily helps educate clients about personal financial matters rather than making specific investment recommendations and may not require any licensing.
Bottom Line
While most financial advisors do have four-year degrees, it’s possible to work in the field without having a diploma. Getting a job at a bank, insurance company, brokerage or investment company is one way to acquire the skills necessary to do the work. Employers will also often assist people in getting additional licenses and certifications.
Tips for Getting Financial Help
- Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Robo-advisors provide investment and financial counsel and services at lower cost and with greater flexibility than human financial advisors. These offerings employ computer software to varying degrees as a full or partial substitute for human judgment. There are a number of robo-advisors on the market catering to investors looking for different levels of service.
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