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How to Become a Financial Advisor in Texas

SmartAsset: How to Become a Financial Advisor in Texas

Becoming a financial advisor can be a lucrative career where you help people reach their financial goals. In order to become a financial advisor, there are specific steps that you must take in order to begin this career. Each state has different laws, so here’s how to become a financial advisor in Texas. A financial advisor can help you create or update a financial plan for your needs or goals.

How to Become a Financial Advisor in Texas

Financial advisors in Texas must satisfy education, examination, experience and ethics requirements. Here’s a breakdown of seven things that you need in 2022 to begin your career as a financial advisor in Texas.

Learn about financial planning topics. Most financial advisors have a college degree where they learned basic business concepts and knowledge of 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 want to consider a degree in accounting, finance or financial services for their undergraduate, graduate or Ph.D. 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. Instead of going through the process on your own, the best approach is to find a firm that is 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 each other and learn from each other as you take the required exams to earn your securities licenses.

Take the required exams. Financial advisors play an important role in helping people reach their goals. Because of how important your position is, financial advisors must have specific licenses in order to work with clients. 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:

  • Series 65, Uniform Investment Adviser Law Examination, or
  • Series 7, General Securities Representative Examination (requires FINRA-member firm sponsorship) and the Series 66, Uniform Combined State Law Examination

You are exempt from taking these exams if you have one of the following professional designations:

  • Certified Financial Planner (CFP)
  • Chartered Investment Counselor (CIC)
  • Personal Financial Specialist (PFS)
  • Chartered Financial Analyst (CFA)
  • Chartered Financial Consultant (ChFC)

Many financial advisors also earn insurance licenses in order to offer life insurance, annuities and related products to their clients.

Pay Texas investment advisor fee. Each year, you must pay a fee for your investment advisor registration with the state of Texas. You’ll owe $75 when you apply and $40 each year to renew your license. 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 learn how you can improve and become a better 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.

If you don’t take the required classes on time, your licenses could be suspended or revoked. When this happens, you lose the ability to work with clients as a financial advisor.

Some financial advisors continue their education to receive additional certifications, licenses or degrees. This education helps them to better serve their clients or to work with specific niches within the financial planning industry.

Start booking appointments with clients. After you’ve earned your licenses and received approval from your firm, you can start booking appointments with clients. Many new financial advisors start out by working with family, friends and former co-workers. By doing a good job, they’ll receive referrals to new opportunities from satisfied clients to continue growing their business.

Bottom Line

SmartAsset: How to Become a Financial Advisor in Texas

Now that you know how to become a financial advisor in the Lone Star State, take the next steps to begin 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

  • When working as a financial advisor, it’s important to understand local tax laws that affect your income. Our Texas income tax calculator gives you an idea of how much money you should set aside to pay taxes on your earnings.
  • Even as you look to begin your financial planning career, a financial advisor can help you with your long-term financial planning needs. 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.

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