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 your state's registration requirements. The most common path is to pass the Series 7 exam (for general securities) or Series 65 exam (if you want to work independently), then register with the Financial Industry Regulatory Authority (FINRA) or your state's securities regulator. You do not need a specific degree, but most firms hire people with a bachelor's degree in any field, and many advisors have backgrounds in finance, business, or economics.

The timeline from starting to holding your first license typically takes three to six months, depending on how quickly you find a sponsoring firm and study for the exam. Some people complete it faster; others take longer if they need to retake the exam or wait for firm sponsorship. The real bottleneck is usually finding an employer willing to sponsor you, since you cannot sit for most licensing exams without a firm backing you.

Key Takeaways

  • You must pass either the Series 7 exam (to sell most securities) or the Series 65 exam (to manage money independently), and you cannot sit for either without a sponsoring firm.
  • Most firms require a bachelor's degree but do not require it to be in finance; they care more about your ability to pass the exam and sell.
  • Registration with FINRA or your state securities office happens after you pass the exam and is handled largely by your employer.
  • The entire process from hiring to licensed advisor usually takes three to six months, but finding the sponsoring firm is often the longest step.
  • You will need to pass a background check, and certain criminal convictions or financial violations can permanently bar you from the industry.

Getting hired by a firm that will sponsor you

You cannot take a licensing exam without a firm to sponsor you. This is the first real hurdle. Firms sponsor you because they want to hire you as an advisor or broker; they are not doing you a favor. Most entry-level positions are at banks, insurance companies, investment firms, or independent advisory practices. Job titles vary — you might be hired as a "financial advisor," "investment advisor representative," "broker," or "financial consultant" — but the sponsorship requirement is the same.

When you apply for these jobs, you are applying for a position that includes exam sponsorship as part of the hiring package. Firms typically pay for your exam fees (usually $300 to $500 per exam) and may provide study materials or time to prepare. Some larger firms have formal training programs; smaller firms may expect you to study on your own. The hiring process is like any other job interview — they want to know if you can sell, if you are reliable, and if you will pass the background check.

Your resume should emphasize sales ability, customer service, and reliability. A finance degree helps but is not required. Many advisors come from retail, customer service, or sales backgrounds. What matters to hiring managers is whether you can build client relationships and follow compliance rules.

Passing the Series 7 or Series 65 exam

The Series 7 exam is the General Securities Representative Exam. It covers stocks, bonds, mutual funds, options, and other securities. Most people who work as brokers or advisors at traditional firms take this exam. It has 250 questions, takes six hours, and you need a score of at least 72 percent to pass. The exam costs around $300 and is administered by FINRA through testing centers.

The Series 65 exam is the Uniform Investment Advisor Law Exam. It covers investment advisory law, ethics, and portfolio management. You take this exam if you want to manage client money directly or work as an independent advisor. It has 130 questions, takes three hours, and requires a score of at least 73 percent. It also costs around $300.

Some advisors take both exams. The Series 7 lets you sell securities; the Series 65 lets you manage money. If you work for a firm that does both, your employer will tell you which exam to take first. Most people study for four to eight weeks using study guides, online courses, or prep classes. Exam pass rates are roughly 60 to 70 percent on the first attempt, so many people study for a second attempt if they fail the first time.

You must pass the exam while employed by your sponsoring firm. If you leave the firm before passing, you lose sponsorship and cannot sit for the exam until you are hired by another firm.

Background check and registration requirements

After you pass your exam, your firm submits your registration to FINRA (if you took the Series 7) or to your state securities regulator (if you took the Series 65). This process takes two to four weeks. You will undergo a background check that covers criminal history, financial history, and employment history. The check goes back seven to ten years depending on the type of offense.

Certain things will disqualify you permanently or make registration very difficult. These include felony convictions (especially fraud, theft, or drug offenses), SEC enforcement actions, bankruptcy within the last ten years, and certain financial violations. Misdemeanors and older offenses may not disqualify you, but they require disclosure and may trigger additional review. Your firm's compliance department will tell you early in the hiring process whether your background will be a problem.

Once registered, you are a licensed financial advisor. Your license is tied to your employer; if you change firms, you transfer your registration to the new firm. If you leave the industry, your license goes inactive but can be reactivated if you return within a certain period.

Continuing education and maintaining your license

After you are licensed, you must complete continuing education (CE) requirements every year or every two years, depending on your exam and your state. The Series 7 requires 120 hours of CE every three years. The Series 65 requires 30 hours every two years. These hours cover ethics, compliance, product knowledge, and regulatory updates. Your firm usually provides these courses, and many are online.

You must also follow FINRA rules and your state's securities laws. This means disclosing conflicts of interest, keeping detailed records of client interactions, and reporting any disciplinary actions. Violations can result in fines, suspension, or permanent revocation of your license.

Different paths depending on where you want to work

The path varies slightly depending on your employer. At a bank or large brokerage, you will likely take the Series 7 and work under the bank's compliance structure. At an independent advisory firm, you might take the Series 65 and have more flexibility in how you manage client money. At an insurance company, you may take the Series 7 or a different exam (like the Series 6, which covers mutual funds and insurance products) depending on what you sell.

Some advisors start at a firm, build experience and a client base, and then move to an independent practice. Others stay at one firm for their entire career. The licensing requirements are the same, but the business model and earning structure differ. Independent advisors typically charge clients a fee based on assets under management; brokers at firms typically earn commissions on sales.

What you will earn and how compensation works

Entry-level financial advisors typically earn a base salary plus commission or bonus. Salary ranges vary widely by location and firm, but entry-level positions often start between $30,000 and $50,000 per year, with commission or bonus adding significantly to that. As you build a client base, your earnings usually increase. Experienced advisors at large firms or with their own practices can earn six figures or more, but this takes years of building relationships and managing assets.

Compensation structures vary. Some firms pay salary plus commission on sales. Others pay salary plus a percentage of assets under management. Independent advisors typically charge clients a fee (often 0.5 to 1.5 percent of assets annually) and keep that revenue. Your firm will explain the compensation model during hiring.

Frequently Asked Questions

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

Most firms require a bachelor's degree, but it does not have to be in finance or business. Many advisors have degrees in liberal arts, engineering, or other fields. Some firms may hire without a degree if you have strong sales experience, but this is less common. Check with specific firms about their requirements.

How long does it take to pass the Series 7 exam?

Most people study for four to eight weeks before taking the exam. The exam itself takes six hours. If you fail, you can retake it after 30 days. Many people pass on the first attempt, but roughly 30 to 40 percent need a second try.

Can I become a financial advisor without working for a firm first?

No. You must be sponsored by a firm to sit for the licensing exam. You cannot register as an independent advisor without first passing the exam, and you cannot pass the exam without a sponsoring firm. Some people start at a firm, build experience, and then launch their own practice later.

What happens if I fail the licensing exam?

You can retake it after 30 days. Your firm will usually support a second attempt. If you fail multiple times, your firm may decide not to continue sponsoring you, and you would need to find another employer willing to sponsor you for another attempt.

Do I need to take both the Series 7 and Series 65?

Not necessarily. The Series 7 lets you sell securities; the Series 65 lets you manage client money. Your employer will tell you which exam you need based on your job role. Some advisors take both if they do both types of work, but most start with one.