What you need to do to work as a financial advisor

Becoming a financial advisor requires you to pass a licensing exam, complete a background check, and work for a registered firm. The exact path depends on what type of advice you want to give — whether you'll manage investments, sell insurance products, or both — because different activities require different licenses. Most people start by getting a Series 7 or Series 65 license, finding employment at a brokerage or advisory firm, and then building a client base.

The timeline from starting to your first client usually takes three to six months, though this varies based on how quickly you complete exam preparation and how long your employer takes to process your registration. You do not need a specific degree, but you do need to be at least 18, have a high school diploma or equivalent, and pass a background check that includes a criminal history review and a check of your financial records.

Key Takeaways

  • You must pass a licensing exam (usually Series 7 or Series 65) and work for a firm registered with the SEC or FINRA before you can advise clients on investments.
  • Your employer files your registration paperwork with regulators, so you cannot work independently until you have passed your exam and been approved by a registered firm.
  • A background check will review your criminal history, credit report, and any previous employment disputes, and certain convictions or financial problems can disqualify you.
  • Most advisors spend two to four months studying for their licensing exam, and exam fees range from $100 to $300 depending on which license you pursue.

The two main licensing paths: Series 7 versus Series 65

The Series 7 license lets you sell stocks, bonds, mutual funds, and other securities on behalf of a brokerage firm. You work as a broker-dealer, which means you execute trades and earn commissions when clients buy or sell. This is the traditional path if you want to work at a large brokerage like Fidelity, Charles Schwab, or Merrill Lynch. The exam covers securities regulations, trading rules, and product knowledge, and it is one of the harder licensing exams — the pass rate is typically around 60 to 65 percent.

The Series 65 license lets you give investment advice directly to clients and manage their money without executing trades through a brokerage. You work as an investment advisor representative, usually for a registered investment advisor (RIA) or advisory firm. This path is common if you want to build a fee-based practice where clients pay you a percentage of assets under management rather than commissions per trade. The Series 65 exam is shorter and covers fewer topics than the Series 7, with a pass rate around 65 to 70 percent.

Some advisors hold both licenses. If you work at a large firm that does both brokerage and advisory work, your employer may require or encourage you to get both. If you start with one and later want to switch firms or change your business model, you can sit for the other exam.

Steps to take before you sit for an exam

First, decide which license fits your career goal. If you want to work at a traditional brokerage and earn commissions, pursue the Series 7. If you want to work at an advisory firm or eventually run your own fee-based practice, start with the Series 65. Talk to people already working in each role — your network, online forums, or informational interviews — to understand the day-to-day work and which appeals to you.

Second, find a job at a registered firm before you take the exam. Most firms will not hire you without a license, but many will hire you as a trainee or associate and pay for your exam preparation and exam fees while you study. This is the most common path. You apply to firms, interview, and once hired, they enroll you in their exam prep program. The firm then sponsors your registration with FINRA (the Financial Industry Regulatory Authority) or the SEC, depending on your license type.

If you already have a job offer, ask your employer which exam they want you to take and whether they provide study materials. Most large firms use online prep courses like Kaplan, STC, or Wiley, which cost $300 to $600 and include practice exams and video lessons. Some smaller firms may reimburse you for outside prep courses if they do not provide their own.

Taking the exam and what happens after you pass

The Series 7 exam is 250 questions over six hours. The Series 65 exam is 130 questions over three hours. You take the exam at a Prometric testing center, and you receive your score immediately. You need a score of at least 72 percent on the Series 7 and 73 percent on the Series 65 to pass. If you do not pass on your first attempt, you can retake it after 30 days.

Once you pass, your employer files your Form U4 (Uniform Application for Securities Industry Registration or Transfer) with FINRA or the SEC. This is the official registration that makes you a licensed advisor. The form includes your background check, exam scores, and employment history. FINRA or the SEC reviews it, usually within two to four weeks, and either approves or requests more information. During this waiting period, you cannot advise clients or handle their money, but you can study your firm's procedures, shadow experienced advisors, and prepare to launch your practice.

After approval, you are officially registered and can begin taking clients. Your firm will assign you a unique CRD number (Central Registration Depository number), which is your regulatory identifier. Clients can look up your registration and disciplinary history on the FINRA BrokerCheck website or the SEC's Investment Advisor Public Disclosure website.

Background check requirements and what can disqualify you

Your background check covers criminal history, civil judgments, and financial records. Certain convictions — felonies, securities fraud, theft, or crimes involving dishonesty — will disqualify you. Misdemeanors may also disqualify you depending on the crime and how long ago it occurred. You must disclose all arrests, charges, and convictions, even if they were dismissed or expunged, because FINRA and the SEC have access to records beyond public databases.

Financial problems can also block your registration. If you have unpaid tax liens, unpaid judgments, or a history of defaulting on loans, regulators may deny your registration or require you to explain the circumstances. Bankruptcy does not automatically disqualify you, but you must disclose it and show that you have resolved the underlying issues. If you have been fired from a previous job for dishonesty or regulatory violations, that will be flagged during your background check and may require explanation.

If you are unsure whether something in your history will be a problem, contact your prospective employer or a compliance officer at a firm you are interested in. They can give you a sense of whether regulators are likely to approve your registration. Some issues can be resolved with a written explanation or evidence that you have addressed the problem.

Building your client base and ongoing requirements

After you are licensed, your job is to build relationships with clients and grow assets under management or commission revenue. Most firms provide leads, marketing support, or a book of existing clients to work with, but this varies widely. Some firms expect you to cold-call prospects or build your own network. Others assign you to a team where you learn from experienced advisors before going solo.

Once you have clients, you must follow strict rules about how you communicate with them, what you recommend, and how you document your advice. You must put all advice in writing, keep records of client conversations, and disclose any conflicts of interest — for example, if you earn a commission when a client buys a particular product. Your firm's compliance department reviews your communications and client files regularly to make sure you are following regulations.

You must also complete continuing education. The SEC and FINRA require advisors to take a certain number of hours of training each year on new regulations, products, and ethics. Your firm usually provides this training, and it is often done online. Failing to complete continuing education can result in your license being suspended or revoked.

Certifications that can help your career

After you are licensed and have some experience, you can pursue additional certifications that signal expertise to clients and employers. The most common is the Certified Financial Planner (CFP) credential, which requires you to pass an exam, have at least three years of financial planning experience, and meet education requirements. The CFP exam is more comprehensive than the Series 7 or Series 65 and covers tax planning, estate planning, retirement planning, and insurance. It typically takes six months to a year of study after you are already licensed and working.

Other certifications include the Chartered Financial Analyst (CFA), which focuses on investment management and is more technical, and the Chartered Special Needs Consultant (ChSNC), which focuses on planning for people with disabilities. These are optional but can help you specialize and attract certain types of clients.

Frequently Asked Questions

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

No. The SEC and FINRA do not require a specific degree. You need a high school diploma or equivalent, pass your licensing exam, and pass a background check. Many advisors have college degrees, and some firms prefer it, but it is not a legal requirement for licensing.

Can I work as a financial advisor while I am studying for my exam?

No. You cannot advise clients or handle their money until you pass your exam and are registered with FINRA or the SEC. However, you can work at a firm as a trainee, assistant, or in a support role while you study. Once you pass and are registered, you can begin advising clients.

How much does it cost to become a financial advisor?

Exam fees range from $100 to $300 depending on which license you pursue. Study materials cost $300 to $600 if you purchase them yourself. Most employers cover these costs as part of hiring you as a trainee. Background check fees are usually paid by your employer as well.

What is the difference between a broker and an investment advisor?

A broker (Series 7) executes trades and earns commissions when you buy or sell securities. An investment advisor (Series 65) gives advice and manages your money, usually for a fee based on assets under management. Some advisors hold both licenses and do both activities.

How long does it take to get licensed after I pass my exam?

After you pass your exam, your employer files your registration paperwork with FINRA or the SEC. Approval usually takes two to four weeks. During this time, you cannot advise clients, but you can prepare and study your firm's procedures.