What Does a Financial Advisor Do?
A financial advisor helps clients manage their money, plan for retirement, invest for goals, and make informed financial decisions. The role combines sales, relationship building, and financial expertise.
Common Financial Advisor Responsibilities
- Assessing client financial situations
- Developing investment strategies
- Recommending financial products
- Monitoring portfolios
- Providing retirement planning
- Tax planning strategies
- Estate planning guidance
- Insurance recommendations
Step-by-Step: How to Become a Financial Advisor
Step 1: Meet Basic Requirements
| Requirement | Details |
|---|---|
| Age | 18+ (21+ for some firms) |
| Education | Bachelor's degree (usually required) |
| Background Check | Clean criminal record |
| Credit Check | Good credit history |
| U-4 Filing | Registration with FINRA |
Step 2: Get Your Education
While not always legally required, most employers want:
Preferred Degrees:
- Finance
- Economics
- Business Administration
- Accounting
- Financial Planning
Helpful Coursework:
- Investment analysis
- Financial planning
- Economics
- Statistics
- Accounting
- Business law
Step 3: Choose Your Path
There are two main paths to becoming a financial advisor:
Path A: Broker-Dealer (Commission-Based)
Work for firms like Morgan Stanley, Merrill Lynch, or Edward Jones selling investment products for commission.
Required Licenses:
- SIE (Securities Industry Essentials)
- Series 7 (General Securities Representative)
- Series 63 or 66 (State registration)
Path B: RIA (Fee-Based Advisor)
Work for a Registered Investment Adviser providing advice for fees rather than commissions.
Required Licenses:
- Series 65 (Investment Adviser Representative)
- OR Series 66 (if you also have Series 7)
Step 4: Pass Required Exams
For Commission-Based Advisors (Broker-Dealer Path)
| Exam | Purpose | Questions | Pass Rate |
|---|---|---|---|
| SIE | Foundation knowledge | 85 | ~74% |
| Series 7 | General securities sales | 135 | ~65-70% |
| Series 63 | State law (sales) | 60 | ~72% |
OR
| Exam | Purpose | Questions | Pass Rate |
|---|---|---|---|
| SIE | Foundation knowledge | 85 | ~74% |
| Series 7 | General securities sales | 135 | ~65-70% |
| Series 66 | State law + advisory | 100 | ~70% |
For Fee-Based Advisors (RIA Path)
| Exam | Purpose | Questions | Pass Rate |
|---|---|---|---|
| Series 65 | Investment adviser | 130 | ~68% |
Note: Series 65 has no prerequisites and doesn't require firm sponsorship.
Step 5: Get Hired or Start Your Firm
Option 1: Join a Large Firm
- Pros: Training, resources, established client base, benefits
- Cons: Less independence, production requirements
- Examples: Morgan Stanley, Merrill Lynch, Edward Jones, Raymond James
Option 2: Join an Independent Firm
- Pros: More freedom, higher payouts
- Cons: Less support, must build own practice
- Examples: LPL Financial, Ameriprise, Commonwealth
Option 3: Start Your Own RIA
- Pros: Complete independence, keep all revenue
- Cons: Compliance burden, startup costs, no client base
- Requirements: State or SEC registration, compliance program
Step 6: Continue Your Education
Consider additional credentials to stand out:
| Certification | Focus | Requirements |
|---|---|---|
| CFP® | Comprehensive planning | Degree, coursework, exam, experience |
| CFA® | Investment analysis | 3 exams, 4 years experience |
| ChFC® | Advanced planning | 8 courses, 3 years experience |
| CLU® | Life insurance | 5 courses, 3 years experience |
Timeline: How Long Does It Take?
| Phase | Timeline |
|---|---|
| Bachelor's degree | 4 years |
| Job search | 1-3 months |
| SIE exam prep | 2-4 weeks |
| Series 7 prep | 6-10 weeks |
| Series 63/66 prep | 2-4 weeks |
| Total from graduation | 3-6 months |
If already employed at a firm, expect 2-4 months for all exams.
Financial Advisor Salary in 2026
| Experience Level | Salary Range | Total Comp (with bonuses) |
|---|---|---|
| Entry-level (0-2 years) | $40,000-$60,000 | $50,000-$80,000 |
| Mid-level (3-5 years) | $60,000-$100,000 | $80,000-$150,000 |
| Senior (5-10 years) | $80,000-$150,000 | $120,000-$300,000 |
| Top performers (10+ years) | $150,000+ | $300,000-$1,000,000+ |
Compensation Models:
| Model | How It Works |
|---|---|
| Commission | Earn % of products sold |
| Fee-only | Charge flat or hourly fees |
| Fee-based | Combination of fees and commissions |
| AUM | % of assets under management (typically 1%) |
Different Types of Financial Advisors
By Employment Type
| Type | Description | Typical Licenses |
|---|---|---|
| Stockbroker | Sells securities for commission | SIE + Series 7 + 63 |
| Investment Adviser Rep | Provides advice for fees | Series 65 or 66 |
| Insurance Agent | Sells insurance products | State insurance license |
| Financial Planner | Comprehensive planning | CFP® + various |
| Wealth Manager | High-net-worth clients | Multiple licenses + CFP® |
By Specialization
- Retirement Planning Specialist
- Estate Planning Advisor
- Tax Planning Specialist
- Small Business Advisor
- Divorce Financial Analyst
Skills Needed to Succeed
Technical Skills
- Financial analysis
- Investment knowledge
- Tax understanding
- Regulatory compliance
- Technology proficiency
Soft Skills
- Communication
- Relationship building
- Sales ability
- Active listening
- Problem-solving
- Empathy
Day in the Life of a Financial Advisor
| Time | Activity |
|---|---|
| 8:00 AM | Review markets, check client portfolios |
| 9:00 AM | Client meeting: retirement planning review |
| 10:30 AM | Prospect calls, follow-up emails |
| 12:00 PM | Lunch with referral partner |
| 1:00 PM | New client onboarding meeting |
| 3:00 PM | Financial plan preparation |
| 4:00 PM | Team meeting, compliance review |
| 5:00 PM | Administrative work, notes |
Challenges to Consider
1. Building a Client Base
Most new advisors struggle to find clients initially. Expect 2-3 years before having a stable practice.
2. Production Requirements
Many firms have minimum production quotas. Failing to meet them can result in termination.
3. Market Volatility
When markets drop, clients call—and not to say thanks. You'll need resilience.
4. Regulatory Burden
Compliance requirements are extensive. Documentation and supervision are constant.
5. Work-Life Balance
Building a practice often requires long hours, especially early in your career.
Getting Started Today
If You're Still in School
- Major in finance, economics, or business
- Get internships at financial firms
- Study for and pass the SIE
- Network with advisors
If You're Changing Careers
- Pass the SIE (no sponsorship needed)
- Apply to firms with training programs
- Leverage your existing network
- Consider the CFP® educational requirements
If You Have No Finance Background
- Take introductory finance courses
- Read books on investing and planning
- Pass the SIE to demonstrate commitment
- Apply for entry-level positions
Resources to Get Started
- FINRA - Exam information and registration
- CFP Board - CFP® certification path
- OpenExamPrep - Free exam prep resources
- Industry associations - FPA, NAPFA, NAIFA