How to Become a Financial Advisor

Bbecoming a financial advisor can be a rewarding career choice; they help people save for their future and make wise investment choices. To become one, you’ll need to find a business, get a license, and start building business.

If you’re considering becoming a financial advisor, here’s what you need to know.

What does a financial adviser do?

A Financial Advisor provides advice and guidance to clients on investment, insurance and other financial planning matters. They also help clients set financial goals and make plans to achieve those goals.

In addition to providing advice on investments, financial advisers help clients plan for retirement, manage their taxes and deal with life changes such as marriage or the birth of a child.

Responsibilities of Financial Advisors

Financial advisors have a wide range of responsibilities, all of which contribute to helping their clients achieve their financial goals. But one of the most important responsibilities is to study investments and strategies. This includes keeping up with current trends, understanding how different investments work, and knowing when to buy and sell.

Another key responsibility is meeting with clients. This allows advisors to get to know their clients, understand their financial situation and assess their needs. Based on this information, advisors can then help clients choose the investments and strategies that are right for them.

Types of Financial Advisors

Most financial advisors are essentially stockbrokers with some basic knowledge of finance and the required licenses that allow them to help clients choose securities and investment strategies.

However, there are also advisers with more specialized skills. These include financial planners who help clients make comprehensive financial plans, investment advisors who manage clients’ money, and analysts who study particular securities.

Some types of financial advisors to understand:

  • Certified Financial Planner (Call for proposals). To become a CFP, you must go through a rigorous certification process that requires passing difficult exams. CFPs specialize in developing comprehensive financial plans for clients.
  • Chartered Financial Analyst (CFA). This type of financial professional has been certified by the CFA Institute to help assess the securities that investors buy and sell.
  • Registered Investment Advisor (RIA). It is a company that employs individual financial advisors and is registered with the Securities and Exchange Commission (SEC) in the United States or certain states. RIA employees have the ability to make investment decisions on behalf of clients.
  • Certified Financial Advisor (ChFC). This type of advisor has been certified by the American College of Financial Services to help clients with a range of financial planning issues.

Financial advisor licenses

There are many financial advisor licenses issued by the Financial Industry Regulatory Authority (FINRA) that allow advisors to provide different services to clients. Each license has different requirements, but all involve passing an exam and meeting continuing education requirements.

Here are five licenses that can help advisors offer a wide range of services:

  • Series 7: The General Securities Representative Qualifying Exam – or Series 7 Exam – is the standard licensing exam for registered representatives. Passing Series 7 allows an individual to become a stockbroker or stock trader. You must work for a FINRA member firm to take the test and obtain this license.
  • Series 6: The Investment Company and Variable Contract Product Representative Qualifying Exam is a consolidated exam similar to Series 7 that qualifies individuals to sell mutual funds and variable annuities.
  • Series 63: The Uniform Securities Agent State Law Examination is an exam required by most US states for people who want to sell securities. This license is required in addition to Series 7 for advisors to sell securities in most states.
  • Series 65: The Uniform Investment Advisors Act Examination is required for individuals who wish to become investment advisor representatives and make investment recommendations to clients or manage investments on their behalf.
  • Series 66: The Combined Uniform State Law Exam is a combination of the Series 63 and 65 exams. Passing it qualifies a person to work as an investment advisor representative and sell securities in most states.

How to Become a Financial Advisor

Becoming a financial advisor usually involves completing certain industry-specific training, passing an exam, and obtaining licenses. If you’re ready for a career in finance, consider the requirements to be a financial advisor and follow these steps:

1. Get a job

The first step to becoming a financial advisor is to get a job with a company that will sponsor you for your licenses. Some companies hire people with no experience in the financial industry and train them to become financial advisors. However, these companies are generally looking for people with strong sales skills, so if you have experience selling products or services, include it on your resume and during your interview.

2. Pass the necessary licensing exams

For anyone wishing to enter the financial advisory industry, passing the required licensing exams is an essential first step. This typically requires passing the FINRA Series 7 exam as well as additional exams based on the types of products and services you want to sell. For example, if you want to sell securities in most states and recommend securities to clients, you will need to pass the FINRA Series 66 exam.

3. Do a background check

As part of the registration process as a new financial advisor, you will be required to undergo a background check. Your company will coordinate this process, although it may take a few weeks and you may be restricted in your activities until it is complete. For example, you may have to work under the supervision of a fully licensed broker (or be restricted from creating business volume) until your background check is processed.

4. Build a business book

Any financial advisor will tell you that building a strong business portfolio is key to success. Essentially, a book of business is your clientele, that is, the people or businesses to whom you provide financial advice and services. And like any good relationship, it takes effort to build and maintain a solid volume of business.

Here are some tips to achieve this:

  • Always provide top notch service. Your customers need to feel that they are your top priority and that you always have their best interests at heart.
  • Listen to your customers’ needs. They need to feel like they can contact you at any time and that you get back to them quickly.
  • Foster relationships with other professionals in your field. These connections can help you refer customers to others and vice versa, growing your businesses together.

5. Stay up to date with continuing education

Once licensed, financial advisors are required to comply with strict company and regulatory requirements to maintain their licenses. Some of these requirements include passing continuing education courses and passing routine exams. Although meeting these requirements can take time, it is usually not difficult and it is essential for financial advisers to keep up to date with the latest regulations and best practices.

How long does it take to become a financial advisor?

It is possible to join a company and obtain a license within 30 days. However, those seriously considering becoming a financial advisor should expect to spend months of study and preparation to obtain licenses, as well as additional months or years to obtain additional licenses or special licenses. certificates.

What to consider before becoming a financial advisor

Before becoming a financial advisor, there are several important factors to consider. The first is whether you have the temperament for the job. Financial advice can be stressful and requires the ability to handle clients who may be angry or upset. Advisors also need to be able to deal with rejection, as many clients will not follow the advice given to them.

Another important factor is whether you have the required skills and knowledge. Advisors should be familiar with financial concepts and be able to explain them in simple terms. They also need to be comfortable with industry tools, as many aspects of work are now done online.

Here are a few other things to consider before deciding if you want to become a financial advisor, including the fact that you will need to:

  • Be somewhat limited. As a licensed financial adviser, all of your written communications with the public must be reviewed and approved by your firm’s compliance department. This limits the information you can share with customers or potential customers.
  • Be sales-oriented. Most financial advisor fees are based on their sales or assets under management (AUM). You will need to agree to be paid based on your sales if you want to be an advisor.
  • Duty clients to a standard of care. When you work as a financial advisor, clients expect you to put their interests before yours. If you are unwilling or unable to make decisions or make suggestions to clients without considering your own interests, you may want to find another career.

Is becoming a financial advisor right for you?

A career as a financial advisor can be rewarding and offers the opportunity to help people make wise investment choices and plan for their financial future. However, this is not good for everyone.

Financial advisors need to be able to deal with clients who may be anxious or upset about their financial situation. They should also be comfortable with numbers and have a solid understanding of financial concepts. Additionally, financial advisors must be disciplined and organized in order to keep track of their clients’ accounts.

But if you’re interested in helping others with their finances and are willing to work hard, a career as a financial advisor may be right for you.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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