Becoming a Financial Advisor Is Probably Easier Than You Think: 5 Easy Steps

by Sarah Lybrand

A person studying financial advisor requirements at desk

Whether working for individuals or corporations, financial advisors are a suite of highly-specialized professionals—planners, specialists, consultants, and/or analysts—that work to preserve, allocate, and grow the savings of their clients. Not only do professional advisors make good money, with median salaries over six figures—the field is expected to grow by as much as 15% by 2026.

Not bad for a skilled job that, while reliant on talent and experience over the long-term, starts out with surprisingly few requirements. Depending on your focus and expertise, there are still certifications and training required, of course, and the field is not without stiff competition. If you’re thinking of starting a career as a financial advisor, know that the path requires a fair bit of work, and, depending on the qualifications you’re looking to acquire, could mean years of study and work before getting to add a lettered credential to your name.

But, if you’re ready for the commitment and ready to make the jump, here are five steps to put you on your way:  

1. Get It Straight: CFP v. CFA

To make the best educational and career choices, it’s important to first understand the distinction between a Certified Financial Planner CFP®and a Chartered Financial Analyst (CFA). At its most basic level, a CFP® advises on personal portfolios and helps individuals plan for the future (leading to jobs in general accounting, investment strategy, estate and retirement planning, tax planning, cash flow, and insurance), while a CFA primarily works in corporate finance (preparing you for roles such as portfolio managers, financial analysts, business advisors, consultants, and risk managers).

Even under this divide, however, there are several different kinds of credentials to demonstrate your area of specialty, and level of expertise. For example, a Chartered Financial Consultant (ChFC) is similar to a CFP, but handles more complicated financial matters such as early retirement and small business consulting. And, a more prestigious kind of CFA is a Certified Public Accountant (CPA), a certification which denotes a higher level of expertise in public accounting and/or large portfolio management for roles such as chief level executives, auditors, risk managers, or corporate analysts.

Considering these differences, it’s important to think about your own particular preferences and fit—and, to find out the exact financial advisor qualifications and licensing requirements of the state you plan to practice in. However, for almost any advisor role in accounting or finance, the following additional career steps can help.

2. Focus Your Education  

A bachelor’s degree is almost universally required to both qualify and succeed as a financial advisor, and many that work in the field start out majoring in a business or finance program (whether economics, statistics, or a higher degree such as an MBA). So, no matter which certification you seek or whether you’re looking to join a financial firm, an investment brokerage, or work as a solo advisor—getting a solid background in finance can be a step in the right direction.

Still, as long as you have a bachelor’s degree from an accredited college or university, you can attain a CFP® or CFA. It’s possible to receive those certifications without studying business or finance as an undergrad, you just may face a steeper learning curve getting up to speed on finance basics.

3. Find an Internship and/or Entry-Level Job

You don’t exit a college or graduate program with CFP® or CFA certification in hand—it takes at least a few years of work experience to quality for the certifications. So, to get a hands-on, first-person account of the day-to-day job of a financial advisor, and what specialty roles exist in the field, it’s best to aim for at least one accredited internship, post-college apprenticeship, and/or an early-career, entry-level job to round out your resume.

Not only will you get the valuable (and required) work experience under your belt to qualify for certain certifications, you’ll gain something even more critical: the contacts, mentors, and networking opportunities that can lead to the jobs you’ll be seeking later on.  

4. Get Certified as a Financial Advisor

Numerous certifications, designations and charters are available to all levels of financial advisor. Most require an accrued three or more years of work experience to qualify, and are comprised of specialty coursework, an exam, and continuing education classes. The National Association of Personal Financial Advisors (NAPFA) recommends holding at least one or more of the following credentials:

  • Certified Financial Planner (CFP®)
    • To get a CFP® certification, one must hold a bachelor’s degree, have at least three years of experience in financial planning (or two years as an apprentice financial planner), and complete the a one- to two-year course, and pass the CFP exam.
  • Chartered Financial Analyst (CFA)
    • CFA certification requires a bachelor’s degree, at least four years of work experience, and passing three competitive levels of exams (typically a six hour exam for each level, only offered once or twice a year).
  • Chartered Financial Consultant (ChFC)
    • ChFC is similar to a CFA course and exam, but it includes retail and wealth management, financial planning, and some investment consulting for small businesses. This charter has additional coursework and requires three years industry experience.
  • Certified Public Accountant (CPA)
    • A CPA certification is for corporate accounting roles such as consultants, financial analysts and strategic decision-makers, as well as for tax-related services to businesses and individuals. The requirements vary by state, but generally you’ll need a bachelor’s degree and to successfully pass your state’s CPA exam.
  • Personal Financial Specialist (PFS)
    • PFS is earned by CPAs who want to display deep expertise in tax related matters and all aspects of financial planning. It involves an additional 75 hours of personal financial planning education and two years of experience in the field.
  • Additional licensing
    • For many areas of financial planning, there will be additional specialty applications and licensing required. For example, if you want to sell insurance you’ll also need to become a licensed insurance advisor in your state, while those who focus on investments must register with the Securities and Exchange Commission (SEC).

5. Get to Work

Whether you go on to work for a money management company, a financial corporation, or become your own independent financial advisor, setting your career in motion means first learning the steps, plotting the course, and gaining the right experience and education. But for those who do, becoming a financial advisor can be a rewarding, respected, and lucrative career.

There are many career options open to the various certifications available, each with its own pros and cons. But if you’re looking to be a financial advisor in a private practice helping individuals, you’re going to need to learn how to run a business and market it. Make sure you’re up-to-date on the latest compliance rules and start to consider a clientele you’re well suited for. If often makes sense to work for another firm first to gain experience and build a network before you go out on your own.

Maintaining your certification also requires completing continuing education requirements. CFPs, for example, must complete an additional 30 hours of education every two years, while a PFS must finish 60 hours every three.

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