How to Become a Financial Advisor: What You Need to Know

By Joseph
March 28, 2022

The financial advisor career is lucrative for people who know how to spend, save and invest wisely. According to US News, financial advising was ranked as the fourth-best job in 2021, with a median salary of about $90,000 per year. If you’re interested in getting into financial planning in Denver, here are a few things you need to know. 

What Do Financial Advisors Do?

Financial advisors have a broad understanding of the business industry, including saving, investing, tax, and insurance strategies. They can offer personalized financial planning services that help individuals and businesses achieve certain financial goals. Financial advisors also handle all aspects of the client’s financial responsibilities, including debt management and tax requirements. One thing that sets financial advisors apart is their ability to spot changes in market trends and identify potential investment opportunities or changes in regulations that might affect the client’s financial position. 

Advisors regularly monitor the financial position of their clients to develop better financial plans that address the current issues and ensure future goals are achieved. A common tool financial advisors use with their clients is the financial health questionnaire. The client indicates their financial details on the questionnaire, including assets, current income sources, pension projections, financial obligations, and other relevant information. Using this information, the financial advisor can help the client better understand their financial position, thus developing a financial plan tailored to your needs. 

A financial advisor also provides financial education to clients. They are meant to help you achieve your financial goals and equip you with the knowledge to handle your finances independently in the future. The topics taught include budgeting, investment, tax, and insurance. 

Steps to Becoming a Financial Advisor

To become a financial advisor, you’ll need to follow the important steps below:

1. Get a Degree

It is not a requirement to have a degree to become a financial advisor. However, according to the US Bureau of Labor Statistics, more than 75% of financial advisors are hired in companies that require a relevant degree. Therefore, having a degree can be an advantage if you want to join the long list of successful financial advisors. Most common bachelor’s degrees that financial advisors hold include business administration, finance, accounting, and economics. Financial advisors also take additional courses that help them advise and get employment in high-paying companies. These courses include tax laws and regulations, investing, and real estate planning. 

2. Get a License 

Most financial management companies require their advisors to have a license before practicing. Licenses are mandatory for financial advisors trading in stocks and giving advice pertaining to investments and insurance. Here are the required licenses for potential financial advisors in Denver:

Investment Adviser Representative License

Investment advisors and firms are registered and regulated by the Colorado Department of Regulatory Agencies Division of Securities. To become a licensed investment advisor, you need to register with the Financial Industry Regulatory Authority (FINRA) and sit for a series of examinations. 

Stockbroker License

Financial advisors who wish to trade for clients in the stock market must first register with the FINRA-managed Central Registration Depository to get a trading license from the Colorado Division of Securities. One must pass a series of exams, including the series 63 or series 66 state exams and one of the FINRA exams decided by the broker-dealer firm the advisors will be working for based on their investment products. 

License to Sell Life Insurance and Fixed Annuities

Life insurance and fixed annuities are the most common tools financial advisors use in retirement planning for their clients. One must get a license from the Colorado Division of Insurance, which requires completing courses in different areas of study, including legal insurance concepts, life insurance-specific topics, and ethics. 

3. Become a Certified Financial Planner

Getting certified as a financial advisor early on in your career can set you up for success. The type of certification you get will depend on the field you would like to specialize in and what you can afford since a lot of fees are involved. Here are common certification courses for financial advisors:

Certified Financial Planner (CFP)

Requires a bachelor’s degree plus three years of experience to enroll. 

Chartered Financial Consultant (ChFC)

Requires 27 semester credit hours in specific financial courses plus three years of experience. 

Personal Financial Specialist (PFS)

Requires 75 hours of financial planning education, a CPA, and 2 years experience to qualify. 

Chartered Financial Analyst (CFA)

One must have four years of professional or university experience to qualify. 

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