The path to become a financial advisor is not for everyone. It’s a long journey that requires earning an undergraduate degree, getting some solid hands-on experience in the industry, passing a series of exams, and then potentially going on to more specialized education such as a CFP, which today is almost as important as the licensing exams. In today’s article, we’ll cover the basic steps of the financial advisor career path and what to focus on in 2021.
At Bridgemark Strategies, we are leading financial advisor recruiters and consultants serving Financial Advisors, RIAs, and Broker/Dealers nationwide. If you’re considering a transition, we can leverage our vast network and experience to help you discover and vet new firms so you can make the best choice for your needs. Contact Us
Step #1: Get Your Bachelor’s Degree
There’s no specific course of study required to fulfill this qualification. Attend an accredited college or university and pursue a degree in finance or business. Economics is a good choice, and some schools are even offering financial planning as a major or minor and provides a pathway to getting a CFP. Some other ideas for minors, consider psychology, philosophy, sociology, or political science.
This is the step in the process where potential advisors should try to envision what working in the field will actually entail. Tour a few advisory practices if you can and make your intentions clear. There might be an employment opportunity at one of them for later on or an available internship for when you’re still in school. Start planning your future.
Another factor to consider here is technology. The financial advisor of the future will need to know how to employ technology to market and scale their practice. Take some classes in data analytics, social media marketing, and database management. You might want to add a marketing class or two also. They will come in handy later on in your career.
Step #2: Work Experience Prior to Certification
Education is important, but its meaningless without practical experience working in financial services. This is a step you can take while still in school. Find a local firm willing to employ you as a paid employee or intern so you can learn the business. The practical application of the principles you learn in the classroom will also help you to better understand the coursework.
For those who’ve already completed their formal education and earned a bachelor’s degree, look for local RIAs and brokerage firms that take on entry level advisors. They are not hard to find. According to Financial Advisor Magazine, 37% of advisors currently working in the field are expected to retire in the next ten years. That’s creating a need for new talent.
You don’t need to be employed to take a Series 65 or Series 66 exam, but you will need a FINRA-registered sponsor to take the Series 7. In this era, it’s critical to have both, so you’ll need to go to work for someone else when you first come out of school.
Step #3: Study and Sit for Your Exams
Your primary purpose when working on that first job is to study for and pass your exams. The Series 63 is the bare minimum that you’ll need. It’s a 75-minute exam on the Uniform Securities Act. You’ll need it in most states to transact business as a financial advisor.
If you’re planning on doing business as a fee-only (non-commission) advisor, you’ll need a Series 65 license. This test is longer (180 minutes) and gets into investment vehicles, disciplines, economics, ethics, and analysis. It’s also a prerequisite for the Series 7 exam.
In December of 2018, the North American Securities Administrators Association (NASAA) introduced a new exam called the Series 66. It’s a 150-minute combination of the Series 63 and Series 65. This test can be substituted for the Series 65 to fulfill the Series 7 requirement.
The Series 7 is the big one. It’s the longest (225 minutes) and a passing grade of 72 gives you a license to sell options, bonds, fixed income investments, and other commissionable products. Once you complete this last step, you will be a fully licensed financial advisor.
Step #4: Additional Education and Certification
There are other licenses you can test for, including licenses to sell life insurance, real estate, or commodity futures. You can also further your education and get certified as a Certified Financial Planner (CFP) or Certified Financial Analyst (CFA).
This is where understanding the current business environment is important. The 2020 pandemic triggered a new wave of virtual advisory services across the country. Those firms do business across state lines, so competition in the space is more intense.
Certification as a financial planner or financial analyst gives you credibility when speaking with new prospects. Clients choose their financial advisor based on the knowledge they have and the comfort level they feel. Follow the career path laid out here and you’ll be able to provide both.
What’s Your Next Move?
At Bridgemark Strategies, we are leading financial advisor recruiters and consultants serving Financial Advisors, RIAs, and Broker/Dealers nationwide. Whether you’re changing broker-dealers, starting or joining an RIA, or looking for M&A opportunities, we can leverage our vast network and experience to help you discover and vet new firms so you can make the best choice for your needs. Learn more below, and contact us today to schedule a consultation.