Anthony Termini, Financial Expert
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APA Termini, A. (2022, February 9). How to Become a Financial Advisor. Retrieved May 25, 2022, from

MLA Termini, Anthony. "How to Become a Financial Advisor.", 9 Feb 2022,

Chicago Termini, Anthony. "How to Become a Financial Advisor." Last modified February 9, 2022.

Depending upon a financial advisor’s specialization, there are different educational requirements, as well as different types of licensing and certification. The amount of time it takes to become a financial advisor varies based on the type of advice, the manner in which it is offered, and the way the advisor is compensated. No two paths are exactly the same.

How a given financial advisor approaches the business and the specific functional role he or she plays in the advisor-client relationship determines much of this.

According to the Securities Exchange Commission (SEC), financial professionals fall into one of two categories, based on who they work for. They can be employed either by broker-dealers or investment advisors.

The SEC defines the differences as follows:
  • Brokers conduct transactions in securities on behalf of others.
  • Dealers buy and sell securities for their own accounts.
  • Investment advisors advise others on securities.

In the simplest terms, financial advisors employed by broker-dealers sell investments and earn commissions. Those employed by investment advisors sell their knowledge and experience and earn fees.

What a Financial Advisor Does

Financial advisors counsel people on how to save, grow, and spend their money. To make that advice meaningful and specific to each client, advisors typically draw from a process that includes seven steps.

The 7 Step Financial Planning Process
  1. Understanding the client’s personal and financial circumstances
  2. Identifying and selecting goals
  3. Analyzing the client’s current course of action and potential alternative courses of action
  4. Developing the financial planning recommendations
  5. Presenting the financial planning recommendations
  6. Implementing the financial planning recommendations
  7. Monitoring progress and updating

This seven-step process is the basis of any sound consultative relationship, regardless of the type of advice being offered. This process is as appropriate for the agent selling insurance as it is for the attorney building an estate plan. This is why both professionals would be considered financial advisors, to some degree.

Financial Advisors from Various Professions

There are many different types of financial advisors from a wide spectrum of professions.

In fact, any of the following could qualify as a financial advisor:
  • Certified Public Accountants (CPAs)
  • Estate Planning Attorneys
  • Financial Planners
  • Independent Broker-Dealers
  • Insurance Salespeople
  • Investment Advisor Representative (IAR)
  • Money Managers
  • Registered Investment Advisors (RIA)
  • Registered Securities Representatives (formerly known as stockbrokers)
  • Wealth Managers

What differentiates these financial advisors from one another is the main focus of their business and the manner in which they are compensated. People interested in a career in the financial advisory profession should consider these factors and do a self-assessment to determine which profession is most appropriate for their personality and skill set.

Things to Consider About Becoming a Financial Advisor

Before embarking on a career as a financial advisor, a person should think about his or her comfort level with various tasks. Someone put off by selling would be ill-advised to become an insurance salesperson, investment advisor representative or registered securities representative. These positions typically require an advisor to build a book of business from scratch, often by cold-calling complete strangers.

Someone with a high aptitude for mathematics, economics or financial accounting might be well suited to enter the financial advisory profession working as a CPA, financial planner, money manager or wealth manager. College graduates with degrees in liberal arts such as political science might consider entering the profession as an attorney.

Regardless of how a person enters the business, an undergraduate degree will be required by most employers, if not all. A candidate with a postgraduate degree like a master’s degree in Business Administration (MBA) or a Juris Doctor degree (J.D.) would be more suitable prospects for major investment banks that have a Private Client Group or Private Banking operation.

The route taken to enter the profession also has an impact on how a financial advisor is compensated. Generally, accountants and lawyers are paid an hourly fee. Money managers and wealth managers typically earn a fee based on a percentage of their clients’ investment assets. Financial planners can earn a hybrid of fees and commissions, while people in sales are generally paid strictly by commission.

Personal financial advisors employed by investment brokerage firms or insurance companies earn an average of $87,850 a year. Top performers at such firms can earn as much as $208,000 annually. Other professionals can earn even more depending upon the firm and their specific job.

Evolution of the Investment Advisory Business

The role of a financial advisor has changed considerably in the last 20 years. In the past, financial advice was provided almost exclusively from sales representatives, or stockbrokers, at the brokerage arms of big investment banks.

Before the advent of discount brokers and robo-advisors, individual investors could not buy stocks or bonds without using a full-service, full-commission broker, who also had a tight grip on market information. To get a quote on a stock, an investor had to call a broker.

This tight grip on the market meant that investors had to rely on a salesperson for advice. Typically, that advice was centered around investment return and buying the products that could deliver it – even if those products were proprietary to the firm and loaded with fees and an inherent conflict of interest. The broker’s job was to sell, not really advise.

Today, many investors get advice from independent advisors who don’t compete on investment return, but on service and comprehensive planning. Typically, these advisors don’t sell anything. Their main objective is to look out for the client and only recommend investment vehicles that are in the client’s best interest.

From a career perspective, this creates different paths for job seekers that recognize their particular strengths.

Someone interested in the market and generating investment returns — over a more holistic approach to financial advice — might choose to work for a brokerage firm. This would also be a good place for an aggressive salesperson eager to make as much money as possible.

Those who view the financial advisor’s role as a steward of their client’s overall wealth and well-being might consider becoming a financial planner or wealth manager.

Whichever route one takes, the time to get there is a function of a number of things.

How Long Does It Take to Become a Financial Advisor?

The first time commitment would-be financial advisors must make is four years in college. This is the most common requirement of any employer looking for new financial advisors. This is also the case regardless of the type of firm, broker-dealer or investment advisor.

The most prestigious firms will require their new recruits to also have advanced degrees, such as an MBA or J.D., so tack on an additional two years for business school and three more for law school. After that, the licensing and certification process takes time.

Financial advisors that sell securities must be registered representatives. But it is also very common for investment advisory firms to require employees to likewise be registered.

The most common licenses are:
  • Series 3 license to sell commodity futures contracts
  • Series 6 license to sell mutual funds, variable annuities and unit investment trusts
  • Series 65 license to offer financial or investment advice or work with managed-money accounts
  • Series 66 license (combines the Series 63 and Series 65)

Studying for and taking each of these tests won’t add much time to the potential financial advisor’s wait to get started. Each of these exams typically can be completed within the first six months of employment.

In many cases, broker-dealers will require that their representatives also obtain licenses to sell various forms of insurance, such as annuities. Here too, studying for and passing these licensing exams can typically be completed within the first six months of employment.

Prospective financial advisors looking for a career as a financial planner would be well served obtaining the CFP® (Certified Financial Planner) credential. Financial advisors must complete 12 to 18 months of coursework before they can sit for the exam.

In addition to successful completion of the test, an advisor must have three years of experience in the profession before he or she can be accredited. So those financial advisors looking to become Certified Financial Planners will take up to an additional four to five years to achieve that professional accreditation.

For financial advisors working for investment advisory firms, the Certified Financial Analyst (CFA®) Charter is often a mandatory professional designation. It takes three to five years to complete the educational and testing requirements of that designation.

Another important certification for those serious about the fiduciary role of a financial advisor should consider the Certified Financial Fiduciary® (CFF) designation. This certification requires no additional time but is more appropriately sought after one becomes established in the profession. It is important to note that this certification — as is the case with most securities licenses — will require that the applicant pass a thorough background check.

Why Become a Financial Advisor?

Being a financial advisor is a rewarding vocation that helps others in a profound and long-lasting way. Financial advisors can be responsible for protecting not only clients’ assets, but also their hopes, goals, wants, and dreams. A financial advisor’s greatest added value is to help clients not outlive their money.

All money gets consumed. It can be spent by the client, his or her heirs, or the federal government in the absence of a thoughtful plan. The role of a good financial advisor is to help make sure that a client’s money is spent according to his or her wishes.

A career as a financial advisor can also be very financially rewarding. Advisors who care deeply about their clients’ outcomes seem naturally inclined to grow their practices into important businesses. Meeting clients’ financial goals creates additional financial opportunities for the advisor. But it also creates opportunities in the community. As a firm grows, it brings in new employees and helps create an enterprise that can finance the goals and dreams of its employees for decades.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: February 9, 2022

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