- If you didn’t attend college, take advantage of financial advisor certification programs offered or approved by licensing organizations such as CFP and CFA.
- FINRA’s Series 7 license is the most popular licensing choice as it allows you to sell almost all types of securities. But, you’ll need to pass the SIE exam first.
- It’s possible to become a CFA Institute Charterholder without a bachelor’s degree, but you’ll need around two years of working experience to qualify.
In a 2022 study by intelliflo, nearly 3 in 5 Americans surveyed said they wanted financial advice but were unsure where to get it. And, a series of Northwestern Mutual surveys have revealed that the percentage of people working with financial advisors is increasing rapidly, from 22% in 2020 to 26% in 2021, and 35% in 2022. This change is especially prevalent among millennials, with 40% of respondents saying they already work with a financial advisor.
Thus, there is a growing trend of people searching for help with personal finance. And, with a respectable salary of $94,170 per year and a strong job outlook of 5% growth per year, according to the Bureau of Labor Statistics (BLS), now is a great time to consider becoming a financial advisor.
But, how do you become a financial advisor if you don’t have a bachelor’s degree?
This is the question I’m here to answer, as I’ll be discussing the steps required to enter this lucrative field without spending a fortune on a finance degree.
This is what you’ll learn:
- What does a financial advisor do?
- Is a financial advisor required to have a degree?
- What skills does a financial advisor need?
- What financial advisor certificates should you aim for?
- What securities licenses does a financial advisor need?
- What career paths are available for financial advisors who didn’t attend college?
- What are the steps to becoming a financial advisor without a degree?
What does a financial advisor do?
A financial advisor is a professional helping people save and invest their money. This involves working with individuals or businesses to create a financial plan and set investment goals, as well as providing advice on how to achieve those goals best.
Here is a quick rundown of the daily job responsibilities of a financial advisor:
- Meeting with clients to discuss their financial goals – To give their clients actionable advice, financial advisors must start by assessing the financial goals of their customers. Here, a financial advisor uses soft skills (such as clear communication) and hard skills (an understanding of different financial products and services) to get a clear understanding of what the client wants to achieve.
- Analyzing the financial situation of clients – This analysis includes looking at aspects like credit history, savings, investments, and debt. This is important for developing a realistic plan for how clients can best save and invest their money. If the financial advisor works with an organization, the analysis will also look at the company’s financial statements.
- Developing financial plans and investment portfolios – Once the financial advisor understands the goals and current financial situation of their client, they can start to develop a plan for how best to save and invest money. This usually involves creating an investment portfolio tailored to the individual client or company.
- Making recommendations for financial products – Once the financial advisor has a clear understanding of the client’s goals and financial situation, they can start to make recommendations for specific financial products (such as stocks, bonds, or mutual funds) that will help the client reach their goals.
- Monitoring clients’ progress – Financial advisors regularly check in with their clients to see how they progress towards their financial goals. This involves reviewing the client’s investment portfolio and making appropriate changes if needed.
This is not an exhaustive list by any means. Depending on their specialization, work experience, and the client, a financial advisor can have many other responsibilities in addition to the ones listed above. Ultimately, though, the job of a financial advisor boils down to advising clients on how to improve their financial health.
Is a financial advisor required to have a degree?
No, you do not need a degree to become a financial advisor. Most job availabilities for financial advisors do not require a degree and neither do FINRA or NASAA, the two most prominent financial licensing bodies in the United States.
That said, a degree still has plenty of merits when trying to break into an industry full of overqualified applicants. Having one will give you an edge in the job market and the amount of experience you need to sit for licensing exams such as the Series 7 is also vastly reduced by having a bachelor’s degree.
Furthermore, in the realm of personal finance, individuals are highly trusting of those with degrees and formal credentials. Trust is the most important asset personal financial advisors have, and without a college education, building that initial sense of trust becomes much harder.
How much a college diploma will benefit you in becoming a financial advisor also depends on where you’re from. Our research into financial advisor job listings showed that there are vast differences between various states in the United States when it comes to employers’ expectations.
In California, for instance, more than 60% of financial advisor job listings required applicants to have at least a bachelor’s degree to qualify for the position. The same was true for over 50% of financial advisor job postings in North Carolina.
On the other hand, in states like Texas, Florida, New York, and others, employers’ expectations regarding education were much lower, with only around 40% of job postings requiring a degree. Based on our findings, the overall average for the United States is around 53% of financial advisor jobs being available to no-degree applicants.
Here’s a table showing the absolute numbers and percentages of no-degree financial advisors jobs in the 10 most populous states in the United States:
|Nº of no-degree jobs||Total jobs||% of no-degree jobs|
And, here’s a visualization of those same numbers:
What skills does a financial advisor need?
Even though a degree is not an official requirement for financial advisors, these professionals still need a unique set of skills to perform in this role successfully.
Some of the main skills that are needed for this job include:
- Analytical skills – Financial advisors need to understand and analyze complex financial data to make recommendations to their clients. These professionals regularly work with data obtained from financial statements, investment portfolios, and credit reports. For this reason, many financial advisors also possess skills in data analysis, accounting, and business.
- Communication skills – Financial advisors need to clearly explain their recommendations to their clients in a way that is easy to understand. This requires breaking down complex financial concepts into layman’s terms. In addition, financial advisors are bound to work with clients who cannot formulate their financial goals. Thus, financial advisors need to be good, empathic listeners to get to the bottom of the specific needs and goals of all their clients.
- Risk management – An amount of risk is always a variable in finance-related matters. For example, even the most conservative retirement plan can still be subject to market fluctuations that are beyond the control of the financial advisor. Financial advisors need to be well aware of all the risks related to the financial products they recommend to their clients. They also need to be able to manage the expectations of their clients regarding these risks effectively.
- Research skills – Every client of a financial advisor is slightly different. This is especially true for financial advisors that work with businesses. For example, the economic reality of a funeral parlor is very different than that of an establishment in the hospitality industry. These two establishments react completely differently to fluctuations in the economy. As a financial advisor, you will need to be able to assess the specific industry of your clients to make recommendations that are relevant to their particular situation.
- In-depth knowledge of various financial products – This skill is a given. A financial advisor cannot do their job if they are not knowledgeable about the various financial products available on the market. This includes investment vehicles, insurance policies, and retirement plans. Financial advisors need to keep up with the latest changes in the world of finance to make sure that they can provide their clients with the best possible advice.
- Tax optimization – All financial advisors should know the ins and outs of tax laws and regulations in their country of operation. For many clients, tax optimization is one of the first things they think of when they hear the term “financial advisor”. This is because many individuals and organizations are overwhelmed with the complexities of various tax laws and regulations. They know there are ways to save on taxes, yet they do not want to risk breaking any laws. This is where professional financial advisors come in – they help their clients save time and money by ensuring that they are taking advantage of all the tax breaks and incentives, and other “loopholes”, that they are entitled to.
- Financial modeling – Financial models are used to simulate the impact of various financial scenarios on an individual or an organization. Building financial models is something all financial advisors should know how to do. Financial modeling is a valuable tool because it allows financial advisors to show their clients what the potential outcomes of certain decisions might be. In addition, financial modeling allows the advisors to stress test their recommendations before presenting them to their clients.
What financial advisor certificates should you aim for?
As established, there are no specific educational requirements for this job. However, no one will take financial advice from someone who does not have concrete proof of their expertise in the field. You may well be the next Warren Buffet, but unless you have some credentials to back up your claims, no one will take you seriously.
This is where certification programs come in – there are several certification programs offered by very respectable institutions in the finance industry. Credentials from such institutions can perk up your resume even if you do not have a formal degree in finance or economics.
In the following, let’s take a detailed look at 4 certifications that offer the greatest return on investment for aspiring financial advisors. All of the following credentials can be obtained without a degree.
- Certificate in Investment Performance Management (CIPM). The CFA Institute offers CIPM and it is one of the most respected investment certification programs in the world. CIPM credential holders are expected to have a good understanding of investment performance measurement, attribution analysis, and global portfolio management. The program is rigorous and lengthy, taking an average of 18 months to complete in full. This certification can still be obtained faster than a bachelor’s degree in finance. And, a CIPM is arguably just as attractive to prospective clients and employees.
- Enrolled Agent – This credential can be obtained directly from the IRS. Being an enrolled agent means you have the right to represent taxpayers before the IRS. And, as previously mentioned, tax optimization is one of the most common tasks handled by financial advisors. To obtain this credential, you must pass a three-part examination that tests your expertise on individual and business tax returns. Once you become an enrolled agent, you are allowed to represent your clients before all administrative levels of the IRS.
- Financial Modeling and Valuation Analyst Certification – This certification program from the Corporate Finance Institute can be obtained without a degree and covers everything from financial analysis and modeling to valuation. It is a highly practical certification program that prepares students for a career in finance. Upon completion, students can choose between receiving a digital or a physical certification.
- Chartered Retirement Planning Counselor – Retirement and taxes are something that nearly every financial advisor must deal with at some point. Getting a good understanding of retirement planning as soon as possible will be very useful for financial advisors. The College for Financial Planning offers an opportunity to learn the ins and outs of retirement planning with their Chartered Retirement Planning Counselor credential. Here, aspiring finance professionals will learn about tax laws, employee benefits, and investment strategies related to the retirement of an individual.
There are many more worthwhile certificates available for financial advisors. These 4 are just some of the examples that are most relevant for those who want to start their career without a formal degree.
What securities licenses does a financial advisor need?
Certifications are needed to know your field and demonstrate your proficiency in finance. Technically, you do not need any certifications as a financial advisor. What you do need are licenses – each state has different regulations for people who want to work as financial advisors. Depending on the type of products and services you want to offer, you will need different licenses.
In the following, let’s look at some universally important licenses and how to obtain them.
- Series 6 license from FINRA – Financial Industry Regulatory Authority (FINRA) is a body responsible for regulating the securities industry in the United States. The Series 6 license is a license that allows you to sell certain types of securities products, such as mutual funds and variable annuities. To obtain this license, you must pass an examination administered by FINRA. The exam covers investment company products, variable contracts, and federal securities regulations.
- Series 7 license from FINRA – The Series 7 license is a general-securities representative license. This license allows financial advisors to sell nearly every type of security, including stocks, bonds, and options. The Series 7 examination is administered by FINRA and covers topics such as equity securities, debt securities, and derivatives.
- Series 63 license from NASAA – The North American Securities Administrators Association (NASAA) is a body that regulates the securities industry at the state level. The Series 63 license, also known as the Uniform Securities Agent State Law Examination, allows financial advisors to sell securities products in their home state. To obtain this license, you have to pass an examination administered by NASAA. The exam covers state securities regulations and ethical practices in the securities industry.
- Series 65 license from NASAA – The Series 65 license, also known as the Uniform Investment Adviser Law Examination, allows financial advisors to give investment advice to clients and get a commission from the sale of securities products. To obtain this license, you need to pass an examination administered by NASAA. The exam covers investment strategies, portfolio management, and ethics.
- Registered Investment Advisor (RIA). A registered investment advisor, or RIA, is a business authorized by the federal or state government to give investment advice. They have a fiduciary duty to their clients, and they have to register with a regulator such as the SEC. At a later point in your career, you may want to consider becoming a registered investment advisor, but it is not a requirement to start working as a financial advisor.
All of these licenses have a reputation of being somewhat difficult to obtain. However, if you have diligently studied for the exams and have mastered the relevant theory, you should be able to pass them. The only tricky part is obtaining enough working experience to qualify for the exams if you don’t have a college diploma.
What career paths are available for financial advisors who didn't attend college?
As with most jobs, there are plenty of specialization paths available to financial advisors, and whether you graduated from college or not plays little role in the options available to you.
Common career paths for financial advisors include:
- Investment advisor. Investment advisors typically work within investment companies and advise companies, governments, and individuals on completing mergers and acquisitions and initial public offerings (IPOs). They also help companies raise money by issuing and selling securities. The average yearly salary of an investment advisor is $73,745.
- Asset manager. Asset managers are responsible for the investment portfolios of individuals and institutions. They make decisions about what assets to buy and sell stocks, ETFs, and other equities to achieve the financial goals of their clients. The differences between asset management and wealth management can be subtle, so if you’re interested in this career path, be sure to do your research beforehand. The average yearly salary of an asset manager is $74,592.
- Personal financial advisor. Personal financial advisors is a catch-all job title that typically encompasses providing financial services to individuals. They help clients make investment decisions, manage their portfolios, and assist with any other matters that deal with personal finance. The average yearly salary of a personal financial advisor is $74,760.
- Tax advisor. Tax advisors provide tax advice, tax planning, and tax preparation services to individuals and businesses. They help their clients save money by legally minimizing their tax liability and they can be some of the most sought-after financial advisors during tax season. The average yearly salary of a tax advisor is $62,502.
- Financial planner. Financial planners differ from financial advisors in that they focus on the long-term. Financial planning involves setting up a holistic plan that considers all aspects of an individual’s or family’s finances. This can include everything from budgeting and saving to investing and retirement planning. The average yearly salary of a financial planner is $65,613. If you’re interested in
- Estate planner. Estate planners help individuals and families plan for the transfer of their assets after they are deceased. They recommend how to minimize estate taxes, create trusts, and make other financial arrangements. The average yearly salary of an estate planner is $106,570.
- Insurance advisor. Insurance advisors work with clients to help them choose the right insurance policies. They assess their needs and sell insurance with the type and amount of coverage that would be most beneficial to the client’s needs. The average yearly salary of an insurance advisor is $88,884.
What are the steps to becoming a financial advisor without a degree?
Follow these steps to become a financial advisor without a college degree:
1. Choose a career path.
One of the benefits of not having a finance degree is that you can carve out your career path from the start. You don’t need to sit through hundreds of lectures on topics you don’t care about and write college essays on subjects that won’t help you in your chosen field. Instead, you can choose the area of the financial services industry that interests you the most and start building your career from there.
But, to make this work, you need to establish early on what career path you plan to pursue as a financial advisor. There’s a more exhaustive list of the various career paths in a prior section of this article, so I won’t reiterate all of the options here. However, some of the most popular choices for financial advisors include investment advisors, asset managers, personal financial advisors, tax advisors, and financial planners.
While there are many other areas you can specialize in, don’t overthink it for now. Try instead to make a general decision as to which type of financial advisor you want to be. This will allow you to tailor your hunt for jobs and licensing more easily later.
2. Plan your certification and licensing goals.
Once you have a general understanding of the type of financial advisor you strive to be, you can start planning your certification and licensing goals. This is a crucial step to consider early on as licensing plays a big role in the financial services industry. And, it’s especially true if you don’t have a college degree because your licenses will be scrutinized more than someone with a bachelor’s or master’s degree.
As far as certification programs go, they are not a requirement by any means and it’s possible to learn all the necessary skills through self-teaching. However, self-teaching requires strong self-discipline, time planning skills, and a keen eye to find the best resources. Poor-quality finance resources are abundant, and if you feel that you lack any of those previously mentioned skills, I recommend pursuing a certification program instead of trying to self-teach everything.
Now, as for licenses, you have plenty of options and I covered the most sought-after licenses and their specifics earlier in this article. However, the primary options available to you are the Series 6 and Series 7 licenses from the Financial Industry Regulatory Authority (FINRA), and the Series 64 and Series 65 licenses from the North American Securities Administrators Association (NASAA).
Unless you’re aiming for a specific career path that does not involve the typical assets like stocks, bonds, options, and futures, I suggest aiming for the Series 7 Exam. It’s one of the most popular licenses among financial advisors and it will allow you to sell various securities products, including stocks and bonds, funds, trusts, municipal securities, and more. But, more on that later.
3. Earn a financial advisor certification.
If you’re trying to become a financial advisor without going to college, the importance of getting certified is magnified. Earning a financial advisor certification will help demonstrate your commitment to the industry, give you the knowledge and skills you need to pass the relevant licensing exams, and improve your chances of getting hired or starting a successful finance consulting business by a very large margin.
A certification program provides a set curriculum designed by experts in the field. This can save you time by not having to search for resources yourself and ensures that you’re learning from reliable sources. The CIPM Program, in particular, allows you to take the CIPM Level I and II Exams, and apply for a CFA Charterholder status. Remember, though, that if you don’t have a bachelor’s degree, you must have a considerable amount of working experience to qualify for CFA Charterholder status and pass the Level II Exam.
Additionally, if you’re interested in financial planning, I recommend looking through the CFP-approved education programs. More often than not, these programs are led by the same universities that offer finance degrees. But, instead of a college degree, you’ll obtain a certificate, which is enough to meet the Certified Financial Planner (CFP) exam requirements.
4. Pass the Securities Industry Essentials (SIE) Exam.
The Securities Industry Essentials (SIE) Exam, offered by FINRA, is a relatively new qualification exam, and it’s compulsory to pass this exam to be eligible for the Series 7 and 6 exams. The only requirement for taking the SIE is that you are 18 years old, and unlike the Series exams, you don’t need to get a FINRA-member firm or SRO to sponsor you if you want to take the SIE.
Whichever license you’re aiming for in the long term, I strongly recommend making the SIE Exam your short-term priority, as it will open up a wider range of job opportunities, and you can take it without a college degree or any prior working experience. Plus, the exam is not as complicated as the Series 7 or Series 6 exams, so there’s no reason to avoid it.
While passing the SIE exam will not give you the right to sell securities, it’s still sought-after by employers because it tests your basic knowledge of the securities industry. Plus, if you paid for and passed the SIE by yourself, it also means that the employer will not have to fund your SIE exam fees, so it’s a win-win situation for them.
5. Get a job or internship within a FINRA-member firm.
Getting hired as an advisor by a brokerage firm is difficult if you do not have credentials or a formal degree. And, getting the necessary credentials often requires working experience, so it’s a bit of a chicken-and-egg situation. The good news is, that there are plenty of entry-level jobs and internships available. Especially if you completed the previous step and passed the SIE exam.
For now, you will not be working under the job title of “financial advisor” as you don’t hold the necessary licenses yet. But, to start, aim for jobs or internships as an assistant in insurance companies, banks, or investment firms that are part of FINRA.
The best case scenario for you is to get an internship within a FINRA-member firm or SRO because of sponsorship possibilities. Sponsorship is important because it allows you to take the Series 6 and 7 exams from FINRA, and that is why an internship within a FINRA-member firm or SRO is often better in the long term than a full-time paying job at a non-member firm. Acquiring a license is your end goal, and taking a pay cut by accepting an internship is a sacrifice worth making if it means you’re one step closer to your goal.
6. Acquire one of the Series Licenses from FINRA.
By this point, you have completed a certification program, passed the SIE exam, and started gaining some initial working experience (ideally within a FINRA-member firm). You’re ready to start selling stocks, bonds, futures, and options, but there’s just one thing left that’s stopping you: licensure.
In the United States, a securities license is required to market and sell investments professionally, and there are no exceptions to this rule. This means that sooner or later, you’ll have to pass one of the Series exams from FINRA. The Series 6, Series 7, Series 63, and Series 65 exams are all great options to aim for, but as a rule of thumb, Series 7 tends to be the gold standard, so I recommend going for that. It’s also the most difficult to obtain, though, so you could also start with the Series 6 or 63 and then upgrade to the Series 7 later on.
To be eligible for the Series 7 exam, you must:
- Be age 18 or older.
- Pass the SIE Exam.
- Get sponsored by a FINRA-member firm or SRO.
A college degree is not among the requirements for taking the Series 7 Exam, so don’t sweat it if you didn’t attend college. However, this does not mean that the exam will be a cakewalk. Well, the exam may be (it has a 65% pass rate), but fulfilling the prerequisites is a different story.
The most difficult part of the requirements tends to be obtaining the sponsorship, as the firm or SRO must be willing to hire you as an employee or intern before they can sponsor you. Most often, these sponsors are banks or brokerage firms. Banks, in particular, are notorious for being difficult to get into if you don’t have a degree, so obtaining sponsorship will be a challenge if you didn’t attend college.
Nevertheless, don’t give up – if at first, you don’t succeed, try again. Keep applying to entry-level jobs and internships, and eventually, you’ll find someone to sponsor you. And, once you get sponsored and acquire the Series 7 license, you have finally reached your goal of becoming a financial advisor without a college degree. You now have the right to sell stocks, bonds, futures, and options, and you can start working with clients to help them optimize their spending and improve their financial growth. Congrats!