How do I Become a Certified Financial Advisor?

Justin Riche

To become a certified financial advisor, first decide the area of finance in which you would like to specialize. There are a number of certifications or designations that you can get after completing specific training and passing dedicated exams. Also, some training programs associated with some certifications tend to focus more on one specific area of finance than others, although most will cover the other areas as well to ensure that candidates have in-depth and well-rounded financial knowledge. Included among these certifications are designations such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA). To be eligible to apply for any certification, you must meet certain requirements that are set by the organization offering it.

Some certified financial advisors may work for financial organizations, such as banks.
Some certified financial advisors may work for financial organizations, such as banks.

Typically, one can become a certified financial advisor if he or she holds designations such as CFP, CFA, CPA and others. To get the CFP designation, for instance, an individual will be required to have solid knowledge of many financial topics, including stocks, bonds, retirement planning, estate planning and tax planning. The knowledge of these topics can come from education received in college, work experience and/or specified CFP pre-exam training. An individual can be granted the CFP certification after passing the dedicated exam, and he or she also is required to agree to adhere to the ethic code, the financial planning standards and other requirements as specified by the administering body.

To get a CFP designation, a financial advisor should have solid knowledge of stocks and bonds.
To get a CFP designation, a financial advisor should have solid knowledge of stocks and bonds.

CFP programs are offered in many countries around the globe. In the United States, for example, it is administered by the Certified Financial Planner Board of Standards. The body that administers the CFP certification in Canada is called the Financial Planners Standards Council, and the one in the United Kingdom is called the Institute of Financial Planning. In many other countries, the program is supervised by the Financial Planning Standards Board.

CFA holders are highly esteemed in the financial advisory field and other areas of professional finance generally. This certification is granted by the CFA Institute in many countries. To become a certified financial advisor with a CFA designation, one will need to meet the CFA Institute's requirements, which include passing three rigorous exams. The exams test the candidate's knowledge in security analysis, portfolio management, economics, accounting and other areas. Also, the candidate has to understand and agree to follow the CFA Institute's ethical and professional standards.

A CPA holder will be mainly versed in taxation matters, but he or she can be very knowledgeable in many other areas as well. The CPA designation is mainly offered in the U.S., but many countries, such as the United Kingdom, have an equivalent designation called a Chartered Accountant (CA). An individual also can become a certified financial advisor with a designation such as Certified Fund Specialist (CFS), and the advisor with this title will specialize in giving clients advice regarding investing in mutual funds.

In addition to having any one of these professional certifications, the financial advisor might be required to get a license before he or she can begin giving financial advice to clients. Having a license will depend on local laws. For example, many states in the U.S. require financial advisors to pass an exam called the Series 65, after which they are granted a license to provide their services. Getting any one of the certifications is highly favorable in the financial advising business, but one needs to check local laws to see whether they need an additional license before opening for business.

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