What you need to do to become a financial advisor

Becoming a financial advisor requires passing a licensing exam, getting sponsored by a firm, and meeting education requirements that vary by the type of advice you want to give. There is no single path — the requirements depend on whether you want to manage investments, sell insurance products, or provide general financial planning. Most people start by getting a job at a financial services firm, then complete the exam while employed there.

The fastest route for most people is the Series 7 exam (for general securities) or Series 65 exam (for investment advisors), both administered by FINRA, the Financial Industry Regulatory Authority. You cannot sit for either exam without a sponsoring firm — you need a job offer first. Once hired, your employer typically pays for exam prep materials and gives you study time.

Key Takeaways

  • You must work for a registered financial services firm to take licensing exams; you cannot study and test on your own.
  • The Series 7 exam qualifies you to sell stocks, bonds, and mutual funds; the Series 65 qualifies you to manage client money directly as an investment advisor.
  • Most states require a bachelor's degree from an accredited college, though the degree does not have to be in finance or business.
  • After passing your exam, you must complete continuing education every year to keep your license active.
  • Some advisors also pursue the Certified Financial Planner (CFP) credential, which requires additional study and a separate exam beyond your initial license.

The licensing exams and what they let you do

The Series 7 exam is the most common entry point. It qualifies you to sell investment products — stocks, bonds, mutual funds, options — on behalf of a brokerage firm. The exam has 250 questions and you have five hours and 45 minutes to complete it. You must score at least 72 percent to pass. Most people study for four to eight weeks using prep courses, textbooks, or online materials provided by their employer.

The Series 65 exam is for investment advisor representatives — people who manage client portfolios directly rather than just selling products. It has 130 questions, takes three hours, and requires a 73 percent passing score. If you work for an independent registered investment advisor (RIA) rather than a brokerage, this is usually the exam you take. Some firms require both Series 7 and Series 65.

Other exams exist for specific roles: the Series 6 for mutual fund and variable annuity sales, the Series 63 for state-level registration, and the Series 79 for investment banking. Your employer will tell you which exam you need based on the job you are hired for.

Education requirements before and after licensing

Most states require a high school diploma or GED at minimum, and many firms require a bachelor's degree from an accredited four-year college. The degree does not have to be in finance, accounting, or business — employers hire people with degrees in engineering, liberal arts, communications, and other fields. What matters is that you have the degree and can pass the licensing exam.

Before you can sit for the Series 7 or Series 65, you must also complete a pre-exam course. This is not optional — FINRA requires it. Your employer will enroll you in one, usually an online course that takes 20 to 40 hours to complete. You do not have to pass it to take the exam, but you must complete it and document that you did.

After you pass your exam and get licensed, you must complete continuing education (CE) every year. The number of hours varies by state and by exam type, but typically ranges from 12 to 30 hours per year. Your firm usually tracks this and may require you to complete CE during work hours or on your own time.

How to get hired at a financial services firm

You cannot take a licensing exam without a job offer from a registered firm. This means your first step is getting hired, not studying for the exam. Most financial services firms — brokerages, investment advisory firms, insurance companies, and banks with investment divisions — hire entry-level advisors or advisor trainees without requiring you to already be licensed.

When you apply, be clear that you are willing to get licensed. Firms expect to hire people who are not yet licensed and will sponsor them through the exam process. During the hiring process, ask directly: Does the firm pay for exam prep? Do they give you study time during work hours? How long do you typically have to pass the exam after being hired? The answers vary widely.

Some firms hire you as a trainee and expect you to pass your exam within 90 days. Others give you six months or longer. Some pay for all exam materials and study courses; others expect you to pay and reimburse you after you pass. Get these details in writing before you accept the job.

The Certified Financial Planner credential and advanced certifications

After you are licensed and working, many advisors pursue the Certified Financial Planner (CFP) credential. This is not required to work as an advisor, but it signals to clients that you have met higher education and ethics standards. To earn the CFP, you must complete a CFP-approved education program (usually 120 to 150 hours of coursework), have three years of full-time financial planning experience, pass the CFP exam, and agree to a code of ethics.

The CFP exam is administered by the CFP Board and covers financial planning, investments, taxes, insurance, retirement, and estate planning. It is more comprehensive than the Series 7 or Series 65 and takes longer to study for — most people spend three to six months preparing. The exam costs several hundred dollars and you must pay for it yourself, though some employers offer reimbursement.

Other credentials exist depending on your specialty: the Chartered Financial Analyst (CFA) for investment managers, the Chartered Special Needs Consultant (ChSNC) for advisors working with disabled clients, and various insurance-specific credentials. These are optional but can help you stand out in a competitive field.

State licensing and registration requirements

In addition to FINRA exams, you must register with your state's securities regulator. Most states use the Form ADV (if you work for an investment advisor) or register through FINRA's Central Registration Depository (CRD) system (if you work for a brokerage). Your employer handles most of this paperwork, but you will need to provide personal information, background history, and sign disclosure forms.

Some states have additional requirements. A few states require you to pass a state-specific exam (the Series 63 or Series 66) in addition to your federal exam. A handful of states require continuing education hours beyond what FINRA requires. Your employer's compliance department will tell you what your state requires.

Background checks are standard. Firms will review your criminal history, credit history, and employment history. Certain criminal convictions or financial problems can disqualify you from licensure, though not all. If you have concerns about your background, ask the firm during the hiring process whether they see any red flags.

How long the whole process takes

From job offer to licensed advisor typically takes three to six months. You get hired, complete the pre-exam course (two to four weeks), study for the licensing exam (four to eight weeks), take the exam, and then wait for your registration to process (one to two weeks). Some firms move faster; others are slower depending on how busy their compliance team is.

If you pursue the CFP credential after getting licensed, add another six to twelve months. If you want to specialize in a particular area (like retirement planning or tax-advantaged investing), you may take additional courses or certifications, which can add months or years depending on how much time you dedicate to them.

Frequently Asked Questions

Do I need a finance degree to become a financial advisor?

No. Most firms require a bachelor's degree from an accredited college, but it does not have to be in finance, business, or accounting. You can have a degree in any field. What matters is passing your licensing exam and meeting your state's requirements.

Can I study for the Series 7 or Series 65 on my own without a job?

No. FINRA requires that you be sponsored by a registered firm to sit for either exam. You must have a job offer and be employed by the firm when you take the test. You cannot register for the exam independently.

What happens if I fail the licensing exam?

You can retake it. Most firms allow you to retake the exam after a waiting period (usually 30 days). If you fail multiple times, your employer may decide not to continue sponsoring you, but this varies by firm. Ask your employer about their retake policy before you take the exam.

Do I have to work for a big brokerage, or can I work for a smaller firm?

You can work for any registered firm — large brokerages, small independent advisors, banks, credit unions, and insurance companies all hire licensed advisors. The licensing requirements are the same regardless of firm size. Smaller firms may offer different training and career paths than large ones, but the exam and registration process is identical.

How much does it cost to become a licensed financial advisor?

The exam fees themselves are a few hundred dollars each, but most employers pay these costs. Pre-exam courses and study materials may cost $500 to $2,000, though many firms provide these free or reimburse you after you pass. If you pursue the CFP credential later, that costs several thousand dollars. Ask your employer what costs they cover before you accept a job.