Hi guys, welcome to the most sought-after piece you can get on Financial Advisor Courses and Certifications.
We guarantee you that going through this piece will help you get a fuller understanding of the courses, experience and license requirements to become a Certified Financial Advisor.
In this article on financial advisor course, we’ll discuss:
That being said, let’s dive right in!
Introduction to Financial Advisor Course
Are you considering becoming a Financial Advisor?
The prospect of taking on a new career can be intimidating, and choosing to become a Financial Advisor may be at the peak of daunting considering the plethora of certifications needed to acquire the skills for success.
What do Financial Advisors do?
Although you might already have an idea of what a financial advisor does, let us get you acquainted with all the nitty-gritty bits.
A financial advisor is a professional who uses their finance expertise to give clients financial advice on achieving their financial goals.
The day-to-day duties of a financial advisor involve creating a comprehensive financial plan for clients by engaging clients on topics such as how they bank, the amount of money they are saving, or the kind of insurance they need to have.
Additionally, advisors are responsible for regularly checking in on clients to evaluate their current financial position, where they stand with meeting their financial goals, and finding alternative courses of action when the initial plan to meet financial goals does not work.
While financial advisors can act as generalists, it is best to narrow down your area of specialization to be competitive in your field.
Financial advisors can choose to become either personal financial advisors or business financial advisors, specializing in personal financial planning, retirement planning, investment planning, or estate planning.
Making an informed choice when choosing a specialization for becoming a financial advisor will be easier if you understand the various financial advisor courses available.
What to Study to Become a Financial Advisor?
While an individual may become a financial advisor without a degree, most firms will only hire a financial advisor who holds a minimum education requirement of a bachelor’s degree.
Choosing which degree to obtain will stem from your intended area of expertise, retirement, insurance, social security, portfolio management, tax planning, and so forth.
However, to make understanding the degree options available to financial advisors easier, here are some college degrees that will prepare you for your career in financial services.
An Economics degree
Studying global and broad micro and macroeconomic concepts covered during coursework for an economics degree equips financial advisors with the know-how to help clients better maneuver any economic climate.
Other concepts mandatory to becoming a financial advisor and studying within an economics degree are international trade, labor economics, and financial advising.
Majors within an economics degree will vary per academic institution but seek to choose something that incorporates finance to provide an introduction to allocating financial resources.
Business degree with a major in Finance
For individuals wanting to become financial advisors, pursuing a business degree with a major in finance is ideal.
Studying a business degree broadens your knowledge in business operations such as banking and investment, some topics which are vital for understanding financial planning.
Since a business degree generally covers a wide array of topics when choosing a major, consider which area of expertise you would like to work master.
A major in finance, for instance, will make candidates more knowledgeable on topics such as financial markets, business valuation, and other financial products.
The fact is, anything related to business and economics is beneficial, but in the case that you want to become a financial advisor after already attaining an unrelated degree, do not fret – no major is required, as stated repeatedly throughout this article.
And if you do happen to have been a psychology major – then you hit the interpersonal part of financial advising right in the bud.
Degrees in Communication, Psychology, or Liberal Arts
Apart from understanding financial concepts, financial advisors need interpersonal skills, like communication, to attract and form long-term relationships with clients.
A degree in communication, psychology or liberal arts can offer interpersonal, analytical, and decision-making skills.
And also, whether having a business or non-business-related degree, you still have the option to pursue a relevant postgraduate qualification.
While it is not mandatory, a postgraduate qualification in financial planning or accounting planning is a popular choice for financial advisors who want to improve their career prospects.
Financial Advisor Certifications
Apart from degrees, you must have at least one license, certification, or designation to become a certified financial advisor.
These are the top 2 certifications to consider in the financial advisory industry.
Certified Financial Planner (CFP) certification
While there may not be specific certification requirements for financial advisory professionals at all levels, if you aspire to be recognized in the financial planning profession, the CFP license is what you need.
By completing the Certified Financial Planner certification, you guarantee your competency in the areas of financial planning, estate planning, retirement planning, and insurance.
The Certified Financial Planner Board of Standards, Inc. administers the Certified Financial Planner (CFP) program, proving your financial planning expertise.
The CFP Board requires individuals interested in attaining a CFP certificate to have graduated from a local accredited college and undergone coursework that includes retirement savings, insurance planning, estate planning, risk management, and standards of professional conduct.
Depending on the academic institution that you enroll with, a CFP certification education program can take anywhere between 18-24 months to complete.
Certified Financial Analyst (CFA)
Although a CFA certification is difficult to earn, the certification can prove beneficial for your career if you put in your time and effort.
The CFA Institute requires that you pass a three-level exam, obtain work experience, and produce a recommendation from an employer to become a CFA.
To register to the CFA Institute, you need to complete a professional conduct statement and become affiliated with a local chapter.
After earning this certification, you may want to consider a master’s degree in Business Administration, Accounting, or a related field to put yourself ahead of your colleagues.
Whether you opt to traverse in earning qualifications or not, the next step to conducting business as a financial advisor is to obtain licensing.
For your benefit, we will go over the different licenses financial advisors may want to hold.
What licenses should a Financial Advisor have?
You might be thinking, well, I already have a qualification, so why do I still need professional licensing?
A license enables financial advisors to conduct transactions related to financial products, making you a fully functioning and competent advisor to your clients.
Based on the unique products you plan to sell when becoming a financial advisor, here is a look at the customary licenses that certified financial advisors need to have and the steps to acquire them.
Take the Security Industry Essentials (SIE) exam
The first step to acquiring licensing to become a financial advisor is to take the SIE exam administered by the Financial Industry Regulatory Authority (FINRA).
FINRA created the SIE exam as a co-requisite to the Series 6 or 7 exam.
Unlike a Series 7 exam, applicants do not need a sponsor to enroll for the SIE; hence, an individual not affiliated with an organization can take this exam.
To register for an SIE exam, you need to enroll on FINRA’s website.
Upon enrollment, FINRA requires that you pay the $60 exam fee.
An SIE exam consists of 75 multiple choice questions and is 1 hour 45 minutes long.
A score of 70 is required to pass an SIE.
The results of an SIE exam are valid for four years, within which you should take on any of the representative level top-off exams.
While passing an SIE exam proves an individual posses basic knowledge to engage in the securities business, a representative level top-off exam, appropriate for a financial advisor, like the Series 7 exam, is required.
Find a sponsor for your Series 6 License
FINRA’s Series 6 License allows financial advisors to offer limited services such as selling packaged securities like variable annuities and mutual funds – it is the first stepping stone to conduct business.
A financial advisor with a Series 6 license may not sell individual stocks or bonds.
If the individual wishes to enroll for the Series 6 exam, a FINRA member or a self-regulatory organization (SRO) should sponsor them.
As of 2020, candidates have the option to take the Series 6 exam in person or online.
The passing score is 35 of 50, with candidates having 90 minutes to complete the exam.
In addition to the set of 50 questions, five unscored questions are added to the exam.
Taking a Series 6 exam costs $40.
A go-to option for many financial advisers is to get a Series 6 license and then get a job as a learning experience before tackling the comprehensive Series 7 License.
Find a sponsor for your Series 7 License
If your goal is to become a financial advisor who is the cream of the crop, then a Series 7 License should be your focus.
FINRA administers the Series 7 License that allows financial advisors to sell almost every investment product there is.
A financial advisor holding a Series 7 License can sell bonds, stock, options, futures, municipal securities, and mutual funds.
An advantage of a Series 7 license is that an advisor may still sell packaged securities regardless if they have a Series 6 license or not.
However, it does not include selling life insurance products or real estate.
Taking a Series 7 exam requires you to attain sponsorship from a member of FINRA, who will need to fill out a form U4, known as the Uniform Application for Securities Industry Registration or Transfer.
The cost to take a Series 7 exam is $245
Commonly, the firm sponsoring you will cover the Series 7 exam fee.
Passing the Series 7 exam requires candidates to score 72% correct answers from a 125 question multiple-choice exam.
You will receive 3 hours and 45 minutes to complete the Series 7 exam.
On your second anniversary of being a Series 7 or 6 Licensee for two years, you will need to complete continuing education within 120 days to maintain the validity of your license.
Get your Series 63 License
In addition to passing your Series 6 or Series 7 exam, almost every state (excluding Colorado, District of Columbia, Louisiana, Maryland, Ohio, and Puerto Rico) requires that a future financial advisor attains a Series 63 License to conduct business within its borders.
FINRA administers the exam, and the North American Securities Administrators Association (NASAA) creates the Series 63 exam.
The Series 63 License exam’s difficulty level is less than the Series 6 or 7; nonetheless, ensure that you are well familiar with ethical practices and fiduciary obligations tailored to each state’s unique security regulations.
You must answer 43 out of 60 multiple-choice questions correctly within 75 minutes to pass this exam.
Fee compensated Financial Advisors need a Series 65 License
The NASAA Series 65 exam is administered by FINRA and is required by most states to work as an investment advisor, subject to the type of financial advisor you would like to become.
Financial advisors who get compensated for their services with fees rather than commission need to get a Series 65 License or formally known as the Uniform Investment Advisor Law Examination.
Individuals are also allowed to register themselves; however, you should fill out a U10 form rather than a U4.
A sponsor who is a FINRA member can register a candidate to take the exam by filling out a form U4 and paying an examination fee of $175
Series 65 is made up of 130 multiple choice questions and is taken within 3 hours.
The score required to pass the Series 65 exam is 94 out of 130, equivalent to 72.3%.
This exam covers state and federal securities acts, fiduciary obligations, ethical practices, and rules for investment advisors.
The Series 66 License exams
Due to Series 7 and 65 containing similar questions, NASAA recently created Series 66 to eliminate redundancies.
However, you still need to take the Series 7 exam to be eligible to take the Series 66 exam.
The Series 66 License consists of 100 multiple choice questions, with candidates expected to score 73 out of 100 to pass.
Candidates are allowed 2 hours and 30 minutes to complete the exam.
The Series 3 may also be an option
If you want to work as a financial advisor selling real estate or life insurance, you must take the National Commodity Futures Examination to obtain a Series 3 license.
The Commodities Futures Trading Commission (CFTC) and the National Futures Association (NFA) jointly created the Series 3 examination.
It comprises market and regulatory knowledge.
Administered by FINRA, candidates are expected to obtain a 70% score from an exam that consists of 120 questions.
The exam is 150 minutes long.
So far, we’ve discussed financial advisor courses, degrees, certs, and licenses; let’s take it a notch further by exploring the experience requirements for financial advisors.
Financial Advisor experience requirements
As mentioned before, the financial industry holds high professional standards for financial professionals.
It is unlikely a financial advisor will conduct business without at least a couple of years of work experience.
To this effect, many firms expect newcomers to have had experience in either a business or sales setting.
Amongst other skill sets, advisors are expected to have acquired interpersonal skills viable when attracting clients.
A financial advisor should also have some entrepreneurial qualities since once a financial advisor starts thinking like a business owner, their entrepreneurial spirit sets them apart from other financial advisors.
If you have just completed acquiring qualifications, licenses, and certifications, as hard as it may seem, try and obtain an internship to increase your skillset and employability.
Becoming a licensed financial advisor is no walk in the park – this you must know by now.
There are several financial advisor requirements that you have to meet to be a recognized finance professional.
Along with having certifications, licenses, and other qualifications, financial advisors need interpersonal skills to build long-term relationships with clients and real-world experiences to increase their chances at future success stories.