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If you think it would be meaningful to seek work helping others to manage their personal finances, you might be wondering which credentials you’d need to become a financial advisor. The details vary depending on your location. In the USA, some of the requirements vary depending which types of investments you plan to help your clients add to their portfolios; there are also different requirements depending on the employer you want to work with as well as which state you work in and which state(s) your clients live in.
Education and Training Necessary for Becoming a Financial Advisor in the United States
A bachelor’s degree is the minimum academic requirement for becoming a financial advisor. It’s helpful to major in finance or a closely related topic such as accounting, economics, law, business or mathematics. Graduate degrees can open up better-paying opportunities in this career path. Some employers require their personal financial advisors to undergo supervised training on the job.
Licensure Needed to Become a Financial Advisor in the USA
You’ll need licenses to give advice to others regarding investments or to sell certain types of investments including bonds, stocks, mutual funds, commodities and insurance policies.
In order to become licensed, a financial advisor must have a thorough understanding of each type of investment product s/he will be selling. It’s also essential for the candidate to understand all the applicable laws relating to that type of product. Because both the laws and product options can be complex, it is typical for financial advisors to specialize in only one of these areas. There are specialized commodities brokers; there are financial advisors who focus only on insurance sales. If you want to become a financial advisor, it’s worthwhile to research each of these types of investments and decide if you want to focus your efforts exclusively on one of them.
To become licensed, you’ll need to pass one or more exams depending on the specifics of your situation, according to the Financial Industry Regulatory Authority.
Financial Advisors, State Registrations and SEC Registration
The federal National Securities Markets Improvement Act of 1996 is a law governing securities policy in the USA. This law determines which authorities financial advisors must register with. Experts at the Bureau of Labor Statistics explain that financial advisors working with large firms need to register with the Securities and Exchange Commission, while financial advisors working with small firms need to register at the state level.
Financial Advisor Certification
Certified Financial Planner certification is a way to impress potential clients, and it can help you maximize your opportunities as a financial advisor. You’ll have to pass the CFP exam to be eligible for this certification. You’ll also have to complete your bachelor’s degree at a regionally accredited school that has CFP-approved curriculum.
Related Resource: What is a Commercial Banker?
Hopefully you now have a better idea of the amount of preparation and effort that goes into launching a career as a financial advisor. If you think you have the interpersonal and analytical skills required to succeed in this occupation, it could be rewarding to pursue this career path. Now that you’re updated on the credentials, licenses and registrations required, you’re empowered to decide if you want to invest the time it would take to become a financial advisor.
