If you need to hire a financial advisor, or maybe you even want to become one, either way you’ll need to know the different types of financial advisor licenses and what they are required to obtain before they can start practicing.

Types of Financial Advisor Licenses

Let’s say for our purposes here that you want to become a financial advisor. First thing is, there are many types of financial advisors. You can be a banker, a stock broker, an investment advisor, an insurance salesmen, there is a whole myriad of positions open to you.  But in most cases you will have to be licensed. There are certain qualifications that go along with each type position as well.

CPA, Certified Public Accountant

If you want to become a CPA there are certain requirements, both educational and licensing, that you will have to fulfill.  First there are the education requirements. To become a CPA you will have to have a college degree. You will have to have completed 120 hours college credits, receive your bachelor’s degree with a completion of 21 hours in accounting. This could include financial accounting, management accounting, taxation, or auditing.  You will also need 9 credit hours in a business course: finance, business law, or finance.

All such college courses must be obtained at an accredited.  If you went to a 2-year college then all credits must qualify for transfer top a 4-year college.  Any financial courses taken as introductory in accounting may qualify as accepted accounting courses.

You must also be licensed by the state in which you work.  All CPAs must be licensed.  To obtain such a license there is a college exit exam, you will need to pass your CPA exam, and all fees for the state where you plan to work must be paid.

Stock Broker

All stock brokers must meet certain education requirements and must also be licensed. You do not have to have a college degree to become a stock broker, but there are certain education and licensing requirements involved with obtaining this position. To get your license you will have to pass your General Securities Registered Representatives Examination, or Series 7 as it is also known. To obtain this license you will first have to work with a licensed firm for the term of four months.

This is a national exam and will register you with the SEC, the Securities and Exchange Commission. On top of the Series 7 exam, many states will also require you to take a Uniform Securities Agents State Law Examination.  This will license you within the sate where you plan to work.  These exams prepare you for working in the stock mark and will teach you not only the basic rules and regulations but also the laws involved with being a stock broker.  Ethical standards are also a part of these courses, what is required of you ethically in this position.

After you pass the exam, you are not yet licensed but are considered a trainee.  There will be another two years of classes in your education before you can begin working on your own as a fully licensed stock broker.  You may however begin working before these two years, just that you will have to be working under the supervision of an already licensed broker to do so. Throughout your career as a stock broker you will be having to take classes to stay updated as to all the standard practices and laws.

Mortgage Lender and Broker

If you want to be working in the mortgage business, be it residential or commercial, you will also need to be licensed.  The requirements will vary from state to state, but in  all states there will be a licensing fee (for example the fee in Massachusetts is $1,100 annually for mortgage lenders and $600 for mortgage brokers).
 
Every mortgage broker or lender must also display business experience in this field.  In most states, there is not a prerequisite list of credentials, but instead it is up to the state commissioner to decide whether or not you qualify.

Also in most states it is required to have a license that if you are a mortgage lender you maintain a certain level of financial assets (in Massachusetts for example, the amount is $200,000.  No such requirement is necessary for a mortgage broker, however.)

To maintain your mortgage license most states are not what they call brick and mortar states, meaning that you do not have to maintain a physical office in that state. You must simply maintain all the requirements of that state.

Insurance agent

Getting your license to become an insurance agent is also something that is run by the sates, and can be different from state to state. Take for example Texas. In the state of Texas there are two types of license for becoming an insurance agent, Property & Casualty, Life & Health.  Property & Casualty involves coverages like auto, home, insurance, business, and bonds, while Life & Health deals with the aspects in the areas of accident, health, life, and annuities.
 
To obtain your license in the state of Texas there is no pre-licensing requirement (as their may be in other states), but it recommended that you attend some sort of licensing classes.  These classes are offered in all areas and will get you acquainted with what will be expected of you.  You will however be required to take standard test as offered by the state of Texas.  This is known as the Thompson Prometric.  Once you’ve taken and passed this test, you will actually have to have yourself fingerprinted.  This is all part of the comprehensive FBI background check you must undergo.  Most all states have some sort of background check or another.

In Texas, as in other states, there are of course licensing fees.  These can go as high as $70.  Be prepared also to pay for your fingerprinting and licensing application.  These are not too expensive however, usually around $50 apiece. In Texas, as in most states, your license is valid for a period of two years.  You will be required to take refresher courses every time you renew your license.

Investment Advisor

An investment advisor is someone who provides investment advice, as pertaining to financial holdings, for the purpose of how to best handle your money.  To be licensed there are fees of course.  Some states use the term licensed while others use the term registered.  The two of course carry the same meaning.

An investment advisor:
 

 
Such an advisor must not only be licensed in the state where he plans to work but must also meet all federal requirements as well.  In most states an advisor must:
 

 
Application for a license must be made by filing a for ADV with that particular state in which the advisor will be working.  The advisor must also pay all fees required and submit any federal forms necessary.  The position of investment advisor can fall under the jurisdiction of many different departments depending upon which types of finances and securities the advisor is going to represent.

These of course are just a few examples.  Other types of financial advisors that must be licensed include: