Becoming Registered Investment Advisor (RIA) is a process that takes time and dedication. There are three requirements that must be met in order to become an RIA:
- You must have at least 2 years of experience as a registered representative or investment advisor.
- You must pass the Series 65 exam for sales representatives and Series 66 exam for investment advisors. This test will test your knowledge of securities law, state laws, and other relevant topics.
- You must obtain an insurance license from your state attorney general’s office, which will require you to take additional courses and exams online or in person at your local community college or university’s business school.
How To Become Registered Investment Advisor
Pursuing a career as a registered investment advisor can be a rewarding opportunity for those interested in helping individuals and organizations maximize the returns on their investments. Many registered investment advisors possess valuable skills like effective communication, an understanding of the stock market and analytical thinking. Understanding the steps and qualifications necessary to pursue this career may contribute to your success. In this article, we define registered investment advisors, discuss their duties, skills, salary and job outlook and provide comprehensive steps to help you become a registered investment advisor.
Related: Top Job Paths for a Career in Investment Banking
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What is a registered investment adviser?
A registered investment advisor (RIA) consults with high-net-worth individuals and businesses to help them manage their investment portfolios. RIAs are finance professionals who specialize in investing and have a registration with the Securities and Exchange Commission. RIAs have a fiduciary duty to their clients, meaning they must always provide investment advice that’s in the best interest of the individuals and organizations for which they provide consulting services. RIAs may work independently or as a part of an investment advisory firm and often possess an advanced understanding of high-value investing and finance management.
Related: Investment Advisor vs. Broker-Dealer: Definitions and Differences
What does a registered investment advisor do?
The daily responsibilities of an RIA may vary, but often include the following duties:
- Discuss investment and financial goals with clients
- Monitor stock market trends and stay updated on current economic events
- Advise clients regarding investment options
- Conduct security analysis on portfolios
- Network for new client opportunities
- Provide tax advice to clients
- Schedule meetings to discuss portfolio standings with clients
- Maintain and file the proper paperwork and portfolio documentation
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Registered investment advisor skills
There are several skills, traits and competencies that may contribute to your success as an RIA, including:
Communication
It’s important for RIAs to possess advanced written and verbal communication skills in order to correspond with their clients regarding complex fiscal matters. As an RIA, it’s likely you’ll need to possess communication skills that allow you to explain intricate investment ideas in simpler terms for your clients to understand. You’ll also need to communicate important, specific information about portfolios and investment opportunities to a wide range of individuals and decision-makers.
Stress management
Many RIAs consult with individuals and businesses investing large sums of money. Many of your decisions as an RIA can impact the financial stability and success of your clients. In order to successfully navigate this level of responsibility, it may be beneficial to develop stress management skills and techniques. The stock market is a rapidly changing system and being able to adapt to new challenges, barriers and problems while remaining calm under pressure is an important part of succeeding in this role.
Analytical thinking
The ability to think analytically can contribute to your success as you evaluate and monitor stock market trends and changes in investment portfolios. Using data-driven analytics can help you make informed decisions and provide comprehensive, accurate advice to your clients.
Related: Working With a Financial Portfolio: Definition and Tips
Organization
As an RIA, you may work with multiple clients, portfolios and investment accounts at once. It’s important to develop strong organizational skills in order to ensure that you meet all deadlines, respond to all correspondences and complete important milestones on time. It’s also important to be able to maintain an organized record of all portfolios and investment activity.
Mathematical skills
A career in finance often involves advanced mathematical skills. As an RIA, you may need to evaluate intricate numerical systems, economic data and fiscal equations. Developing an understanding of the math necessary to complete your tasks as an RIA is an essential step in pursuing this career.
Registered investment advisor salary and job outlook
The national average salary for investment consultants is $78,889 per year. This number is likely to be similar to the salary of RIAs. The salary of an RIA may depend on their level of experience and location.
According to the U.S. Bureau of Labor Statistics, employment of personal financial advisors may grow by 4% from 2019 to 2029, about the same rate as all occupations. This may also be the case for RIAs and other types of financial advisors or consultants.
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How to become a registered investment advisor
Consider the following steps to become a registered investment advisor:
1. Pursue an education
While there is no industry standard of education requirements for RIAs, many hold a bachelor’s degree in finance, accounting or economics. While not always necessary, a master’s degree may be beneficial in differentiating yourself from the competition. These types of programs help prepare students for a career as an RIA through courses on financial systems, stock market policies, fiscal equations and the legal requirements of investing.
If you haven’t already completed a degree program in one of the aforementioned fields of study, consider enrolling in a local or online university to acquire the necessary knowledge and training to succeed as an RIA.
2. Take the Series 65 Exam
After receiving the appropriate education, you may take the Series 65 exam through the Financial Industry Regulatory Authority (FINRA). FINRA is a self-regulating, private institution that writes and enforces rules for registered brokers and broker-dealer firms in the U.S. In order to legally practice as an RIA, you’ll need to take and successfully pass the Series 65 exam.
The exam comprises 140 multiple-choice questions that cover topics like federal securities laws and investment advice. Exams occur in person and take around three hours to complete. Consider accessing FINRA’s official website for testing locations and dates.
3. Obtain certification
While there are no legal requirements for RIAs to obtain certification, it’s likely that clients will prefer to work with an RIA that holds an industry-specific certification. Consider seeking the following certifications to enhance your qualifications and provide proof of your competency as an RIA:
- Certified Financial Planner (CFP)
- Chartered Financial Analyst (CFA)
- Chartered Investment Counselor (CIC)
- Chartered Financial Consultant (ChFC)
- Personal Financial Specialist (PFS)
4. Register with SEC
Another legal requirement of working as an RIA includes registering with the U.S. Securities and Exchange Commission (SEC). This government organization has differing registration requirements for RIAs, depending on your location, the size of your portfolios and your level of certification. Consider referencing SEC’s official website for information about your particular registration requirements.
The registration process requires the completion and digital upload of a variety of documents, including Form ADV, which covers conflicts of interest, code of ethics and affiliated parties.
