How to Become a Financial Advisor

Financial advisors help individuals manage their finances, from saving and investing to planning for retirement.

In this career, you can help your clients plan for their futures and achieve financial security. At the same time, you can benefit from strong earning potential and a promising job outlook.

In this guide, we’ll explore what financial advisors do, the steps to become one and how much you can expect to make in this role.

Financial advisors analyze clients’ personal finances and offer advice that meets their needs and long-term goals. These professionals help clients make informed decisions about managing their money and investments and give them insight into their long-term financial outlook.

Advisors often specialize in specific areas, such as retirement planning, tax strategy, or risk management. They may work independently or as part of a firm.

You typically need just a bachelor’s degree to enter the field. However, a master’s degree or additional certifications can help you stand out in a competitive job market.

To succeed in this role, you’ll need strong analytical, math, and interpersonal skills. According to R.J. Weiss, a certified financial planner, you’ll need strong communication skills since you’ll be working closely with clients on complex topics such as tax strategies.

“One thing that’s consistent across all the different types of financial advisor roles is communication skills. You’re going to be communicating a lot,” Weiss says.

As a financial advisor, your main duties may include:

Below, we’ll discuss the general steps you need to take to become a financial advisor:

While a bachelor’s degree isn’t strictly required to be a financial advisor, it is typically useful to enter the field — it’s also preferred by many employers.

Earning a bachelor’s degree in finance or a related field (such as business administration or accounting) can get you ahead in a competitive job market.

Also, while employers don’t usually require a specific major or courses, it’s helpful to have some knowledge in areas such as investments, taxes, estate planning, and risk management.

Many employers prefer candidates with prior work experience. With this in mind, consider completing internships while you’re still in college or right after you graduate to gain hands-on experience and learn valuable skills.

An internship can help you land an entry-level financial advisor role. These typically include associate or paraplanner, support planner or advisor, and financial analyst.

Note that your first year in a financial advisor role will likely involve training by a more senior advisor, which can be key to your long-term success.

According to Weiss, there are two types of licenses: those required to do your job legally and those that are more educational in nature.

If you plan to buy or sell stocks, bonds, insurance policies, or offer investing advice, you may need to register with state regulators or the U.S. Securities and Exchange Commission (SEC).

Depending on your role and responsibilities, you may need to pass licensing exams such as a state insurance exam, the SIE and Series 7 (for selling securities) or the Series 65 (for providing fee-based investment advice).

On the other hand, you may also want to start working towards your Certified Financial Planner (CFP) certificate, which requires a mix of work experience, coursework, and exams. This isn’t a requirement, but it can help improve your reputation as a financial advisor.

Weiss says that, while the CFP isn’t required, it highlights your work as a fiduciary. “That means you’re legally required to act in your client’s best interest. That’s a much higher standard than just recommending something that’s ‘suitable,’ which is what some other licenses require.”

As a financial advisor, you can choose to specialize in various areas, such as retirement planning, wealth management, or risk management. Each of these has a unique focus and allows you to hone your skills in specific aspects of financial advising.

For example, as a retirement planning advisor, you can help clients plan for life after work, which can involve aspects like social security withdrawal strategies, tax-efficient withdrawals from retirement portfolios and healthcare planning.

Wealth managers, on the other hand, primarily focus on managing larger and more complex investment portfolios, in addition to estate planning.

You should also consider whether you want to work for a financial firm, insurance company, or bank or if you prefer to work independently.

Larger institutions can provide support and a structured environment, but working independently lets you establish and manage your own practice as you see fit.

According to Weiss, “Being independent does give you a lot more flexibility, and in some cases, more potential, but it can take time. There’s a lot of work involved in establishing a client base either way, but with a firm, you’re getting more assistance.”

Continuing your professional development can improve your skillset and keep you at the top of your game.

You can do so by staying up-to-date on finance and business news and trends as well as laws and regulations. You should also continue networking with other financial professionals to keep up with career opportunities.

Additionally, consider taking professional courses, attending conferences, or earning further certifications.

Getting your master’s degree in finance or business administration can also help you advance your career and earn a higher salary.

Considering the steps outlined above, becoming a financial advisor can take around 4-6 years.

This timeline includes the four years it usually takes to earn a bachelor’s degree and the time needed to gain experience through an internship. It also considers the time it takes to earn any necessary licenses or certifications.

You can speed up the process by completing an accelerated bachelor’s degree and getting work experience while still in college.

You could also look into entry-level roles that don’t require having a bachelor’s degree, just passing a licensing exam. For example, obtaining a life and health insurance license can qualify you to sell many insurance products and passing the Series 65 exam allows you to provide investment advice as an investment advisor representative.

The required licensing exams, in this case, can often be completed in a matter of weeks, making this a faster entry point into the financial services industry. Yet, most larger corporations do prefer candidates with degrees.

According to the Bureau of Labor Statistics (BLS), the median pay for financial advisors in May 2023 was $99,580 per year, or $47.88 per hour. This was around 50% higher than the median annual wage for all American workers that same year, which was $48,060.

BLS data also shows that the lowest 10% of financial advisors made less than $48,730 in 2023 while the highest 10% made over $239,200. Those who work in the finance industry tend to earn the highest salaries, while the ones working in professional, scientific, and technical services tend to make the least.

Working closely with clients and offering them financial advice can be demanding and stressful. But when it comes to becoming a financial advisor, the juice can be worth the squeeze.

According to the BLS, the projected job growth for financial advisors between 2023 and 2033 is 17%. This is a much faster projected job growth rate than the national average of 4% for other occupations.

Additionally, this career pays a lot more than the national average median wage, as discussed in the section above.