Becoming a financial advisor and helping clients reach their financial goals can be a lucrative career. While each state has different laws and regulations, financial advisors in Texas must satisfy education, examination, experience and ethics requirements. Here’s a breakdown of the key components of becoming a financial advisor in Texas.
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Learn About Financial Planning Topics
Most financial advisors earn a college degree, gaining knowledge of business concepts and financial markets. Getting a degree in a related field will help you understand the challenges your clients face and allow you to find solutions to those challenges.
Aspiring financial advisors may consider pursuing an undergraduate, graduate, or doctoral degree in accounting, finance or financial services. When picking your classes, choose those that will help you as you build your financial planning practice, such as:
- Accounting
- Business communication
- Business law
- Ethics
- Finance
- Marketing
- Taxation
Find a Firm Willing to Sponsor You
Rather than navigating the process alone, consider finding a Texas-based firm or large national firm willing to sponsor you. They typically offer classes and hands-on instruction for you to learn how to become a financial advisor. Additionally, you’ll have the opportunity to meet others going through the process at the same time. You can support and learn from one another while preparing for your securities licensing exams.
Take the Required Exams
Financial advisors play a significant role in helping clients achieve their goals, which is why specific licenses are required to work in the industry. These licenses vary based on which products you’ll be working with, the types of clients you’ll have and the requirements of your advisory firm.
In Texas, you must take the following exams to become a financial advisor:
You are exempt from taking these exams if you have one of the following professional designations:
- Certified Financial Planner™ (CFP®)
- Personal Financial Specialist (PFS)
- Chartered Financial Analyst (CFA)
- Chartered Financial Consultant (ChFC)
Many financial advisors obtain insurance licenses to offer life insurance, annuities, and related products to clients.
Pay Texas Investment Advisor Fees
Each year, you must pay a fee for your investment advisor registration with the state of Texas. You’ll owe $75 to register a firm and $35 for each individual investment advisor representative (IAR). All fees must be paid through the Investment Adviser Registration Depository (“IARD”) system.
Train With an Experienced Financial Advisor
Once you’ve passed your exams, you may begin seeing clients. With most firms, you’ll be paired with an experienced advisor that you can learn from. They’ll take you on client visits so that you can see how they respond to different situations.
As you gain more experience, you start to take the lead on client calls as the experienced advisor takes notes. The advisor is there to support you if you get stuck or cannot answer a client’s question. You’ll review each appointment with your advisor to refine your skills and enhance your effectiveness as a financial advisor.
Additionally, they ensure that all of your paperwork is filled out correctly.
Continuing Education Requirements
Passing your licensing exams gives you the ability to see clients, but continuing education allows you to maintain those licenses. Each year, you are required to take continuing education classes in person or online. These classes ensure that you are up-to-date on the latest changes to laws and regulations, as well as reminders on what you learned to earn your licenses. Additionally, these classes may cover other topics, like ethics, that are important when working with clients.
Failing to complete the required classes on time may result in license suspension or revocation. When this happens, you lose the ability to work with clients as a financial advisor.
Some financial advisors pursue additional certifications, licenses or degrees to expand their expertise.This education helps them to better serve their clients or to work with specific niches within the financial planning industry.
Building Your Book of Business
Growing a financial advisory practice in Texas requires a proactive approach to client acquisition and asset accumulation.
Networking is a key strategy – engaging with local business groups, attending industry conferences and leveraging social media can help attract prospects. Consider joining an industry organization like the Texas chapter of the National Association of Insurance and Financial Advisors or one of the Financial Planning Association’s local chapters in the Lone Star State.
Establishing a niche, such as retirement planning for small business owners or investment management for high-net-worth individuals, can differentiate your services and improve client targeting.
Also, consider investing in your tools that can help grow your client list and assets under management. For example, SmartAsset Advisor Marketing Platform (AMP) is a subscription-based service that provides automated lead generation and marketing campaigns.
AMP can generate hundreds of validated leads annually while providing fiduciary advisors with automated marketing tools to nurture prospects more efficiently. AMP also enables advisors to build and manage automated email and text messaging outreach campaigns, saving them time and energy.
Meanwhile, hosting educational seminars or webinars on relevant financial topics can position you as a trusted authority and generate leads. Additionally, digital marketing efforts, such as content-driven SEO, paid advertising and email outreach, can expand your reach beyond personal connections.
Bottom Line
Now that you understand the path to becoming a financial advisor in Texas, take the next steps to launch your career. You’ll meet many amazing people along the way and create plans to help their financial dreams come true. And you’ll learn valuable knowledge that you can use to improve your finances at the same time.
Tips for Becoming a Financial Advisor
- After establishing yourself as a new advisor, consider investing in your marketing and lead generation efforts. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
- Even as you look to begin a career in financial services, a financial advisor can help you with your own long-term financial planning needs. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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