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How to become a Licensed Financial Advisor? | Certifications and Licenses

What is a Financial Advisor? How to become a Licensed Financial Advisor? The world of finance is always changing and it’s never been easier to get into the field in fact many people are already making their way into the world of financial advisors and getting hired as personal finance specialists. If you want to take your career as far as possible and earn some serious bucks then this article is for you.

What is a Financial Advisor?

A financial advisor is someone who helps clients understand their finances and make smart financial decisions. They will guide their clients through the decision-making process and help them decide what kind of investments to make in order to get the most out of their money. A good financial advisor will provide unbiased advice that considers all aspects of an individual’s financial situation. The key difference between a financial advisor and someone who just offers general advice is that they specialize in one area or another, such as retirement planning. 

A financial advisor helps you make financial decisions such as how to invest your money or what kind of insurance you should get. They also help you manage your finances and keep track of your overall spending so that you don’t overspend.

How to become a Financial Advisor?

Financial advisors have one major qualification to be licensed. They must have a bachelor’s degree in finance or economics from an accredited college or university. To obtain this degree you’ll need to complete at least 60 credits of courses that cover topics such as investment and retirement planning, taxation, accounting, and more. You will also need to take a course on the securities industry and write a paper on the relationship between securities law and other areas of law. Once you’ve completed these requirements and received your bachelor’s degree you can begin seeking out licensing requirements for the states in which you wish to practice. Most states require applicants to pass exams that test their knowledge of the laws relevant to financial advice. The exams are available online or through local testing centers. Depending on the goods or services they offer, financial advisors need to obtain particular licenses.

How they’re compensated for those services?

Below are several common licenses advisors can earn series 6 license. Financial advisors are permitted to sell packaged, securities and investment products including mutual funds and variable annuities. Thanks to the series 6 license often known as the securities license. Advisors must register with the financial industry regulatory authority or FINRA and pass a 100-question exam in order to obtain a series 6 license. Key work duties, business development, laws and regulations, account administration, and customer referral are some of the subjects covered in this test. 

Series 7 license 

Financial advisors may market practically any kind of investment product with a series 7 license often known as the general securities license. This includes trading in stocks, bonds, futures, options, and bundled securities. Advisors must pass a FINRA exam with 250 questions in order to obtain a series 7 license. Financial advisors often study for the 3-hour portions of the series 7 exams in advance. 

Series 63 license 

To operate inside a state’s boundaries financial advisors must get the series 63 license. Advisors must pass an exam and they respond to inquiries on extremely specific state rules and regulations in order to earn a series 63 license. There are 60 questions in this FINRA test. To practice in any state, a financial advisor must hold both a series 6 or 7 and a series 63 license. 

Series 65 license

Financial advisors must obtain a series 65 license in order to practice in their state if they are paid in fees rather than commission. Advisors obtain the series 65 license like the series 63 by passing an exam on numerous financial rules and regulations. More specifically the 140 questions on the series 65 exam cover subjects like broad investment principles, laws, regulations, and rules against unethical business practices. 

Series 3 license 

Financial advisors can sell real estate, life insurance, and commodities if they have the series 3 license commonly known as the national commodities futures examination. There are 120 questions in the FINRA-administered series 3 licensure exam.

How to complete Financial Advisor Licensing requirements?

To earn specific licenses financial advisors have to complete the following steps.

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1- Take the securities industry essentials exam or SIE 

Take the FINRA-administered securities industry essentials test to get started. People who are just starting out in the field are probably going to start with the SIE because you can pass it without a sponsor. The exam includes common subjects from the series 6 and 7 tests. The SIE test might assist you in locating a sponsor for the subsequent licensing stages 

2- Find a sponsor for series 6 or 7 exams

You must first secure a sponsorship with a FINRA-linked business or self-regulatory body in order to be eligible for the series 6 or 7 licensure test. Ask a few of the broker-dealers in your network whether they would be willing to sponsor you. Make sure to pass the SIE exam if you’re new to the field or have little experience so potential sponsors will know you’re eligible.

3- Consider the series 3 license option 

A series 3 license issued by FINRA is required if you want to market commodities, life insurance, or real estate. You must successfully complete an additional exam to obtain a series 3 license because the laws and regulations change based on what you’re selling. Before starting the subsequent round of exams take this choice into account if applicable 

4- Take the series 63 or series 65 exams 

Next, pass the FINRA-administered series 63 or series 65 licensure test developed by the North American securities administrators association or NASAA. All states with the exception of Colorado, Florida, the District of Columbia, Louisiana, Maryland, Ohio, new jersey, and Puerto Rico need the series 63 test. Although similar the series 65 license test which is necessary for fee-based advisors concentrates on overall financial proficiency.

5- Explore additional certifications

After earning the licenses necessary to conduct business in your state explore additional certifications to further your career and become a more competitive advisor. The two most common certifications are certified financial planner or CFP and Certified public accountant or CPA. 

Certified Financial Planner (CFP)

You must hold a bachelor’s degree fulfills the CFP educational requirements and work for at least three years in the field in order to become a CFP. This qualification demonstrates that you are knowledgeable and skilled enough to offer reliable financial advice.

Certified Public Accountant (CPA)

A certified public accountant or CPA  bachelor’s degree and at least two years of related experience are requirements for becoming a CPA. A future career in accounting may offer higher-paying prospects as well as an opportunity to grow and broaden your clientele. 

Should you be a full-time or part-time Financial Advisor?

This is a question that comes up a lot. The short answer is it depends on your goals and how much time you want to commit to the job you can’t just go into the business of being a financial advisor and expect to get rich, but if you have a passion for helping people it’s possible to make a decent living doing it. If you’re looking for full-time work then you’ll want to make sure that your clients trust you enough to be able to say yes when they need help with their finances.

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To do this it helps if you have experience in the industry or if you have friends who are licensed financial advisors because they know what they’re talking about and they’ll be able to recommend an expert who can help them out. If you’re looking for part-time work where you can come in once or twice a week then it’s probably not worth getting licensed as an advisor at this point in your career, but if there are opportunities available where your skill set is needed but where they’re only looking for part-time employment. Maybe someone who can work as an assistant on occasion then there’s nothing wrong with getting started here. We hope you found this article informative what are your thoughts on it comment below.



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