How to Become a Financial Investment Advisor

Three Parts:Getting EducatedGaining ExperienceBecoming Licensed and Certified

Financial advisors provide guidance to their clients regarding investing and financial strategies, and sometimes can also invest money for them. Many advisors choose to become registered investment advisors (RIAs) as a way to legitimize their practice. However, this certification doesn't come for free; RIAs need education, experience, and demonstrated skills before they can begin practicing. If you're in school or considering making a career change, use the steps below to enter the rewarding field of financial advising.

Part 1
Getting Educated

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    Decide whether financial advising suits you. Working as a financial adviser can be rewarding, but it is also challenging due to the amount of skills required and the long hours you have to work for. Think of the interest you have in finance and investment. The more interest you have in financial matters, the more efficient you are likely to be as a financial investment adviser.
    • Being a successful financial advisor also depends greatly on your ability to work with people. The best advisors will be part salesman and part financial markets specialist.[1]
  2. 2
    Know your options. Financial advisors typically take one of two routes: either become a stockbroker licensed by the Financial Industry Regulatory Authority (FINRA) or become registered with the Securities and Exchange Commission (SEC) as an investment advisor. Investment advisors are able to avoid much of the strict regulation that comes with being a stockbroker.[2]
    • The remainder of this article will discuss becoming an investment advisor. For more on becoming a stockbroker, see how to be a stock broker.
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    Get a college degree. While not technically required, most banks and investment firms will not hire financial advisors without a bachelors degree. However, the field in which you get your degree is much less than important than the fact that you have one. You can enter the field with any type of major, but most financial advisors get a degree in economics, business, finance, or accounting. If you don't pursue one of these majors, be sure to at least take several relevant classes in accounting or finance so that you have a basic understanding of the industry.[3]
  4. 4
    Consider graduate school. In a tough job market, some graduates may find that landing a good job as an investment advisor is easier with a graduate degree. However, many banks or investment firms eventually send their employee back for a Master's degree after a few of work to hone their skills. Consider this possibility before jumping right from college to graduate school.[4]
    • Working for a few years after college may also give you more of an idea of what you might want to specialize in when you go to graduate school.

Part 2
Gaining Experience

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    Seek out financial advisor internships. An internship is a valuable way to earn experience, and it is how many financial advisors get their start. Even though many of these internships are not paid, the experience that they provide can make the expense well worth it. If you're currently working elsewhere, you may be able obtain an internship working at night.[5]
    • It may be easier for you to obtain an internship if your college or university has links to existing banks or firms. Talk to your career development office to find these internships.[6]
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    Look for chances to work with clients. When searching for an internship or first job, avoid working for a brokerage firm or insurance company. In a lot of cases, you will be required by these firms to solicit your family and friends for sales leads. After this, if you can't produce a steady stream of business quickly, you will be fired. Some beginners may thrive in this atmosphere, but if that doesn't sound like you, consider working for a bank or investment advisory firm. At these companies, you have a mentor to show you the ropes and introduce you to clients.[7]
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    Search for a training program. There are a number of large investment firms that offer detailed training programs for financial investment advisers. Such firms can help you gather the required work experience and prepare you for licensing examinations. Although the programs are competitive, they are worth the task involved in offering financial investment advice if you get into them. They also offer you an opportunity to show that you have a passion for financial investment work.
    • Alternatively, you can work with smaller companies which guarantee one-on-one mentoring and offer an opportunity for you to broaden your knowledge by undertaking different tasks for clients with various needs.
    • A majority of trainees enter training programs from other lines of work.[8]
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    Add to your knowledge. Deep knowledge is also required for financial planning, especially with respect to investments in education, mortgages, retirement plans and so forth. If possible, take classes or work within related fields like real estate or tax preparation to gain unique experience that can allow you to specialize. Having additional knowledge will also separate you from your peers and make you a more valuable hire.[9]

Part 3
Becoming Licensed and Certified

  1. 1
    Pass the Series 65 exam. To become a licensed RIA, you will need to take the Series 65 exam, which is administered by FINRA. For this exam, you do not have to be sponsored by employer, so you can technically take this exam while still in school or before getting a job (provided you are knowledgable enough to pass it, that is). In comparison to other professional certification tests, the Series 65 is relatively light, at three hours and 140 questions.
    • Questions cover federal financial law and investment advice-related topics.
    • You must score at least a score of 72 percent to pass. 10 of the 140 questions are test questions and do not count for or against your score.[10]
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    Register with the government. To work as an RIA, you must be registered with your state or or the SEC. Those advisors with more than $100 million under management have to register with the SEC and those below this threshold only must register with their state. In addition, advisors to companies must always register with the SEC, regardless of company size.
    • Registration is done through the Investment Advisor Registration Depository (IARD). RIAs must open an account with this system and then file Forms ADV and U4 with the appropriate body (SEC or state).
    • Approval with generally take 30-45 days. Once approved, you are now a registered RIA.[11]
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    Consider adding further certifications. While you only have to pass the Series 65 to practice as an RIA, most firms and clients require that you have another, higher certification. These generally involve specialized or different aspects of investment advisory.[12] Specifically, they are:
    • Certified Financial Planner (CFP), which focuses on financial planning for investments, taxes, insurance, and estates.[13]
    • Chartered Financial Analyst (CFA), which involves deeper and more complicated financial analysis of markets and securities.[14]
    • Personal Financial Specialist (PFS), which is similar to a CFP but also requires certified public accountant (CPA) certification.[15]
    • Chartered Financial Consultant (ChFC), which requires three years of industry experience and qualifies individuals for providing investment advice.[16]
    • Chartered Investment Counselor (CIC), which builds off the CFA certification and qualifies advisors to handle larger accounts like mutual funds.[17]
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    Earn your certifications. To earn these specializations, you will need to qualify first. Some of them require you to have other certifications. For example, the CIC requires that you have a CFA certificate. Others require that you have a certain number of years of industry experience, usually three to five years. For all certifications, you will have to pass an associated exam that will be much more involved than the Series 65.
    • The CFP test, for example, is a massive undertaking. It is a two-day, 10-hour exam, covering all aspects of financial planning. Because of this, more than 40 percent of test-takers fail the first time and have to take it again.[18]

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