What You Need to Do to Become a Financial Advisor

Becoming a financial advisor requires passing a licensing exam, holding a bachelor's degree (in any field), and working for a registered firm. The most common entry point is obtaining your Series 7 license if you want to sell securities, or your Series 65 if you want to manage client money directly. You cannot sit for either exam without being sponsored by a brokerage, investment firm, or registered investment advisor — you apply to work there first, then study and test while employed.

The timeline from hiring to licensed advisor is typically three to six months. You study for the exam on your own time (most people spend 40 to 100 hours preparing), pay the exam fee yourself (around $300 per test), and must pass on your first or second attempt to stay on track. If you fail, your employer may or may not pay for retakes. Many firms hire people with no finance background and train them on the job, but you will need to demonstrate basic math competency and pass a background check.

Key Takeaways

  • You must work for a registered firm before you can take any licensing exam — the firm sponsors your candidacy and you cannot test independently.
  • Series 7 lets you sell stocks, bonds, and mutual funds; Series 65 lets you manage client portfolios; many advisors hold both.
  • A bachelor's degree is required but the major does not matter — finance, business, or any other field satisfies the requirement.
  • Background checks, drug tests, and fingerprinting are standard; felonies and financial crimes will disqualify you.
  • After licensing, most states require continuing education credits every year to keep your license active.

The Two Main License Types and What They Let You Do

The Series 7 (General Securities Representative Exam) is the most common first license. It allows you to sell publicly traded securities — stocks, bonds, mutual funds, options, and exchange-traded funds — to retail clients. You work as a broker or registered representative, and your firm earns commissions when clients buy or sell. You do not manage money; you execute trades and recommend products. Most large brokerage firms (Fidelity, Charles Schwab, Merrill Lynch) hire entry-level people into Series 7 roles.

The Series 65 (Uniform Investment Advisor Law Exam) lets you manage client money directly as a registered investment advisor. You charge fees based on assets under management, create portfolios tailored to each client, and make investment decisions on their behalf. Series 65 requires a higher standard of care and more detailed compliance documentation. Smaller independent advisory firms, wealth management practices, and robo-advisor platforms often hire Series 65 advisors. Many advisors hold both licenses — Series 7 to sell products and Series 65 to manage accounts.

A third option, the Series 6, is less common now. It covers mutual funds and variable annuities only, not individual stocks or bonds. Some insurance companies and smaller firms still use it, but most have moved to Series 7 because it is more versatile and does not cost much more to obtain.

Education and Exam Requirements

You must have a bachelor's degree from an accredited college or university before you sit for Series 7 or Series 65. The degree can be in any subject — accounting, English, engineering, communications, anything. The exam does not test your degree; it tests securities law, regulations, and product knowledge. You do not need a finance degree, and many successful advisors studied humanities or sciences in college.

The Series 7 exam is 225 multiple-choice questions taken over six hours at a testing center. You need a score of 72% to pass. Most people study 50 to 100 hours using study guides, practice exams, and online courses (many firms provide these free to employees). The exam covers securities products, trading rules, customer protection, and compliance. The Series 65 exam is 130 questions over two hours and focuses on investment management, fiduciary duty, and advisor regulations. The passing score is 73%.

Your employer typically covers the exam fee and may provide study materials. Some firms require you to pass within 90 days of hire; others give you six months. If you fail, you can retake it, but repeated failures may result in termination. Plan to study in the evenings and weekends while working your first job.

Finding a Firm That Will Sponsor You

You cannot take a Series 7 or Series 65 exam without a Form U4 filed by your employer with the Financial Industry Regulatory Authority (FINRA). This means you must be hired by a registered firm first. The firm is your sponsor; they pay FINRA to register you as a candidate, and you test under their license.

Large brokerage firms hire entry-level advisors constantly and expect to train them. Fidelity, Schwab, Merrill Lynch, Edward Jones, and Vanguard all run formal training programs. You apply online like any job, interview, and if hired, start work before you are licensed. Your first weeks involve shadowing, learning the firm's systems, and beginning exam prep. Small independent advisory firms also hire unlicensed people but may expect you to come in with some finance knowledge or a relevant degree.

When applying, emphasize customer service experience, sales ability, and willingness to study. Firms know they are hiring people who will need to pass an exam; they want people who are reliable and coachable. Your resume does not need to mention finance or investing. Many firms specifically hire from retail, hospitality, and customer service backgrounds because those skills transfer directly to client relationships.

Background Checks and Disqualifying Factors

FINRA requires a background check, fingerprinting, and drug test before you can be registered. The check covers criminal history, civil judgments, and financial records. Certain offenses will disqualify you: felonies (especially financial crimes, fraud, or theft), misdemeanor convictions involving dishonesty, and active restraining orders. A DUI or minor drug possession from years ago does not automatically disqualify you, but you must disclose it on your Form U4.

Financial red flags also matter. If you have unpaid tax liens, active collection accounts, or a recent bankruptcy, FINRA may deny registration or require you to explain the circumstances. The standard is whether you pose a risk to clients or the integrity of the industry. A bankruptcy from ten years ago that you have recovered from is treated differently than current unpaid debts. Be honest on your Form U4; lying or omitting information is grounds for permanent disqualification.

Once registered, you remain subject to background checks throughout your career. Any arrest, lawsuit, or financial problem must be reported to FINRA within 30 days. Advisors have been terminated and barred for failing to disclose.

Continuing Education and License Maintenance

After you pass your exam and are registered, you must complete continuing education (CE) to keep your license active. The requirement varies by state and license type. Most states require 12 to 16 hours of CE per year, with at least some hours in ethics or regulatory updates. Your firm typically tracks this and sends you reminders. CE courses are offered online, in person, and through webinars; many are free through your firm or cost $50 to $200 per course.

You must also pay annual registration fees to FINRA and your state securities regulator. These fees range from $100 to $500 per year depending on your license type and state. Your firm usually deducts these from your paycheck or reimburses you if you pay upfront. Failure to complete CE or pay fees results in license suspension; you cannot work as an advisor until you catch up.

Some advisors pursue additional credentials like the Certified Financial Planner (CFP) mark, which requires more education and a separate exam. The CFP is not required to work as an advisor but is valued by clients and can lead to higher pay. It typically takes one to three years of additional study after you are already licensed and working.

Typical First-Year Earnings and Career Path

Entry-level advisors at large firms typically earn a base salary of $30,000 to $50,000 per year, plus commissions or bonuses based on sales or assets managed. Your first year is usually the lowest-paid because you are building a client base. After three to five years, advisors at successful firms earn $75,000 to $150,000 or more, depending on how much client money they manage or how many products they sell.

Your first job is usually in a call center, branch office, or team environment where you handle inbound calls, follow up on leads, or assist senior advisors. You learn the business, build relationships with clients, and develop a book of business (your own clients). After 18 to 24 months, you may move to an independent desk, manage your own clients, or specialize in a product area like retirement planning or investment management.

Some advisors stay at one firm for their entire career; others move to independent practices or smaller firms after building experience. The skills you learn — client communication, product knowledge, compliance, and sales — transfer across firms. Your Series 7 or Series 65 license moves with you; you simply update your Form U4 when you change employers.

Frequently Asked Questions

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

No. You need a bachelor's degree, but it can be in any field. Many successful advisors studied liberal arts, engineering, or business. The licensing exam tests securities knowledge, not your degree major. Your employer will train you on products and regulations.

Can I study for the Series 7 exam without being hired by a firm?

No. You cannot sit for the exam without a Form U4 filed by your employer. You must be hired first, then study while working. Some people study informally to prepare, but the official exam registration requires sponsorship.

How long does it take to become a financial advisor from start to finish?

From job offer to licensed advisor is typically three to six months. You work while studying, take the exam, and are registered once you pass. Some people take longer if they fail the exam and retake it. After licensing, you continue working and building your client base; there is no fixed endpoint.

What happens if I fail the Series 7 exam?

You can retake it. Most people get a second attempt within 30 days. If you fail twice, your firm may terminate you or give you additional study time. Repeated failures usually end the hire. Plan your study time carefully and use practice exams to gauge readiness before testing.

Do I have to work for a big firm, or can I start at a small advisory practice?

Either is possible. Large firms have formal training and more resources; small firms may expect you to learn faster and be more independent. Both can sponsor your license. Small firms sometimes hire people with relevant education or experience; large firms hire people with no finance background. Your choice depends on learning style and career goals.