What you need to do to become a financial advisor

Becoming a financial advisor requires passing a licensing exam, completing a background check, and finding a firm to sponsor you. Most people start by getting a Series 7 license (which lets you sell securities) or a Series 65 license (which lets you give investment information). You cannot sit for either exam without a sponsoring firm — a brokerage, investment company, or registered investment advisor — willing to employ you and submit your process to the Financial Industry Regulatory Authority (FINRA).

The path takes roughly three to six months from hiring to license in hand, though the timeline depends on how quickly you study, how fast your firm processes paperwork, and how soon FINRA schedules your exam. You will need a high school diploma or equivalent, a clean background check, and to be at least 18 years old. A college degree is not required by law, though most firms prefer it and many advisors have one.

Key Takeaways

  • You must work for a licensed firm (brokerage, investment company, or registered investment advisor) before you can sit for any licensing exam.
  • The Series 7 exam lets you sell stocks, bonds, and mutual funds; the Series 65 lets you give personalized investment information without selling products.
  • Most people study for four to eight weeks and pay $100 to $300 for exam fees, plus study materials that cost $50 to $500 depending on the provider.
  • A background check is required and will disqualify you if you have certain criminal convictions or financial violations on your record.
  • After you pass the exam and get your license, you still need to complete continuing education every year to keep it active.

The two main licensing paths: Series 7 versus Series 65

The Series 7 is the General Securities Representative exam. It covers stocks, bonds, mutual funds, options, and other securities. If you pass, you can sell these products to clients and earn commissions. Most people who work at traditional brokerages (like Fidelity, Charles Schwab, or regional firms) hold a Series 7. The exam has 125 questions, takes three hours and 45 minutes, and covers product knowledge, regulations, and how to handle client accounts.

The Series 65 is the Uniform Investment Adviser Law exam. It covers investment theory, portfolio management, and the rules that govern advisors who give personalized information. If you pass, you can tell clients which investments to buy and sell, and you typically charge a fee based on the assets you manage rather than earning commissions per trade. Many independent advisors and fee-only firms require a Series 65. The exam has 130 questions, takes three hours, and focuses more on regulations and ethics than product details.

Some advisors hold both licenses. A Series 7 takes longer to study for (most people spend six to eight weeks) because there is more material. A Series 65 typically requires four to six weeks of study. Neither exam has a passing score published by FINRA, but both require you to answer roughly 70 percent of questions correctly to pass.

Finding a firm to sponsor you and getting hired

You cannot sit for a Series 7 or Series 65 without a firm to sponsor you. This means you need a job offer from a brokerage, investment company, registered investment advisor, or bank before you study for the exam. The firm submits Form U4 (Uniform process for Securities Industry Registration or Transfer) to FINRA on your behalf, which includes your background information and triggers the background check.

Most financial advisory firms hire people without licenses and train them on the job. You will typically interview like any other job candidate — they want to see sales ability, client service skills, and willingness to learn. Some firms hire recent college graduates into formal training programs; others hire people mid-career from sales, customer service, or other fields. Your resume and interview matter more than your license at the hiring stage.

Once you have a job offer, your firm will tell you which exam to take. They may require you to pass before your start date, or they may hire you and give you 120 days to pass (the standard grace period). During this time, you study on your own, usually with materials your firm provides or recommends. You pay for the exam fee yourself — typically $100 to $300 depending on the exam and testing center.

Studying for the exam and taking the test

Most people use a combination of textbooks, online courses, and practice tests. Popular study providers include Kaplan, STC (Securities Training Corporation), and Knopian, though your firm may have partnerships that give you discounts or free access. Study materials range from $50 for a basic book to $500 for comprehensive online courses with video lessons and tutoring. Many people spend $150 to $300 total.

The exam is computer-based and administered at Pearson Vue testing centers nationwide. You schedule your test date through your firm's FINRA account. On test day, you bring a government-issued ID, arrive 15 minutes early, and answer questions on a computer. You get your pass or fail result when ready. If you fail, you can retake the exam after 30 days, and most people who fail on the first attempt pass on the second.

Study time varies by person. If you have a finance background or have worked in banking, you might need four weeks. If you are new to finance, six to eight weeks is more typical. The key is consistent study — 10 to 15 hours per week is a common pace — rather than cramming the night before.

The background check and Form U4

When your firm submits Form U4, FINRA runs a background check that includes criminal history, credit history, and regulatory records. Most misdemeanors do not disqualify you, but certain felonies (especially financial crimes, fraud, or theft) will. Unpaid tax liens, recent bankruptcies, or a history of regulatory violations can also cause problems. You will be asked to disclose any arrests, convictions, civil judgments, and financial issues on the form itself.

The background check takes two to four weeks. If there are issues, FINRA may ask for more information or a written explanation. If you have a criminal record or financial problem, it is worth talking to your firm's compliance officer before you explore — they can tell you whether it will be a barrier. Honesty on Form U4 is critical; lying or omitting information is itself a violation that can result in permanent disqualification.

Continuing education and keeping your license active

Once you pass your exam and get your license, you must complete continuing education (CE) every year to keep it. The requirement is 30 hours per year for most advisors, with at least four hours in regulatory and ethical topics. Your firm typically provides these courses or reimburses you for them. They are usually online and take a few hours to complete.

You also need to renew your registration every two years. Your firm handles this renewal, and it costs money (the fee varies by firm and state). If you leave the firm, your license becomes inactive within 180 days unless you move to another sponsoring firm. If you want to return to the industry later, you may need to retake your exam or complete additional training, depending on how long you have been away.

Education and background that helps but is not required

A college degree is not legally required to become a financial advisor, but most firms prefer it. A degree in finance, economics, business, or accounting gives you an edge in hiring and makes studying for the exam easier. Some firms have formal training programs that recruit from specific colleges or require a bachelor's degree as a condition of employment.

If you do not have a degree, you can still become an advisor, but you may face more competition for entry-level jobs. Some firms value sales experience, customer service skills, or a track record in a related field (insurance, real estate, banking) as much as a degree. The best approach is to look at job postings from firms you are interested in and see what they actually require versus what they prefer.

Certifications like the Certified Financial Planner (CFP) mark come later in your career, after you have work experience and pass additional exams. You cannot sit for the CFP exam until you have three years of financial planning experience, so it is not a starting point.

Frequently Asked Questions

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

No, a degree is not legally required. However, most firms prefer it, and some require it as a condition of employment. If you do not have a degree, you can still find firms willing to hire you, especially if you have sales experience or a strong background in a related field like banking or insurance.

How much does it cost to become a financial advisor?

Exam fees are $100 to $300, and study materials range from $50 to $500. Most people spend $200 to $400 total out of pocket. Your firm may cover some or all of these costs. You do not pay to sit for the exam until after you are hired and your firm sponsors you.

What happens if I fail the licensing exam?

You can retake it after 30 days. Most people who fail pass on the second attempt. Your firm will typically give you additional study time or resources. Failing does not disqualify you from the industry, though some firms may terminate you if you do not pass within the grace period they set.

Can I study for the exam before I get a job?

You can study the material on your own, but you cannot officially sit for the exam until a firm sponsors you and submits Form U4. Some people study beforehand to be ready when they get hired, which can speed up the process.

What is the difference between a financial advisor and a financial planner?

A financial advisor typically sells investment products or manages money for clients. A financial planner creates a comprehensive plan covering investments, insurance, retirement, taxes, and estate planning. Many advisors call themselves planners, but the CFP certification is the formal credential for financial planning. You can work as an advisor without being a planner.