Can you be a financial advisor with a felony? Form U4 and background checks
In some cases you can become a financial advisor with a felony or other criminal record, and in others the record stops you.
Under the rules of FINRA, which oversees brokerage firms, a felony conviction in the past 101 years bars you from any role at a FINRA member firm unless a firm applies to sponsor you and FINRA approves it. The years count from the date of conviction. An older felony is not a FINRA bar, but you still have to disclose it, and the firm and your state can still weigh it. FINRA's eligibility page sets out the rule.
FINRA calls that bar a statutory disqualification. Only a firm that wants to hire you can sponsor you through FINRA's eligibility proceeding, and FINRA decides. Disclosure is a separate test. The Form U4, the registration application your hiring firm files, asks whether you have ever been charged with or convicted of a felony, with no time limit. It asks about misdemeanors only when they involve things like fraud, theft, bribery, false statements or investments, though the firm also sees your FBI fingerprint result. Bad credit on its own is neither a bar nor a question on the form, though a firm may check it. Insurance licenses and advisory-only registration apply their own separate tests.
This page sets out the rules. It is not legal advice and cannot say how a firm, FINRA or a state will decide any one case. If you have a record, read the form's own questions and ask the regulator or a securities attorney before you apply.
Quick facts
- Felony convictions that disqualify
- Any felony, for 101 years from the date of conviction
- Misdemeanors that disqualify
- Only those on the Exchange Act list, for the same window from conviction
- How far back Form U4 asks about felonies
- No limit. It asks if you have ever been charged or convicted.
- Insurance license with a felony involving dishonesty
- Needs written consent from an insurance regulator, under Section 1033 of the federal criminal code
- Registering as an IAR, an investment adviser representative
- Your state applies its own denial grounds, separate from FINRA's list
- Can you sit the exams with a record?
- Yes. The SIE, FINRA's entry-level exam, and the Series 63 and Series 65 need no firm. Passing is not a license, and the record review comes when you apply to register.
- Bankruptcy and debt settlements Form U4 asks about
- The past 102 years
- Does FINRA require a credit report?
- No. The required search covers criminal, bankruptcy, judgment and lien records.
- Who files your Form U4
- The hiring firm. You cannot submit it yourself.
- Fingerprints due
- Within 303 days of the Form U4 filing
- FBI results reach the firm
- Typically within 484 hours
- Firm must verify your Form U4
- Within 305 calendar days of filing
What disqualifies you, and what do you only have to disclose?
Two tests apply, and they are easy to mix up. Form U4 sets what you disclose. The Securities Exchange Act sets what disqualifies you. Much of what you disclose does not disqualify you.
| Event | Disclosed on Form U4? | Statutory disqualification? |
|---|---|---|
| Felony conviction in the last 101 years | Yes, Section 14A, which also asks about guilty and no contest pleas | Yes, until that window closes |
| Felony conviction older than that | Yes, Section 14A asks if you have ever been convicted | No. The firm and each state still read it |
| Felony charge that was dismissed, is pending or ended in acquittal | Yes, Section 14A asks if you have ever been charged | No. FINRA's list covers convictions |
| Misdemeanor involving investments, fraud, false statements, wrongful taking of property, bribery, perjury, forgery, counterfeiting or extortion | Yes, Section 14B, charges and convictions | Yes, for the same window from conviction, if the offense is on the Exchange Act list (see the misdemeanor section below) |
| Any other misdemeanor | Not under Section 14B | No |
| Misdemeanor failure to file income tax, or misdemeanor gambling | No, per FINRA's interpretive guidance | No |
| Arrest with no formal charge | No | No |
| Bankruptcy, or settling a debt for less than you owed, in the last 102 years | Yes, Section 14K | No |
| Unsatisfied judgment or lien against you | Yes, Section 14M | No |
| A bond denied, paid out or revoked | Yes, Section 14L | No |
| Low credit score, late payments or collection accounts with no judgment or settlement | No Section 14 question asks about them, though you consent to a creditworthiness check | No |
| Court injunction tied to investment or securities activity | Yes, Section 14H | Yes, however old it is |
| Bar, expulsion or license revocation by a securities regulator or a self-regulatory organization (SRO) such as FINRA | Yes, Section 14C to Section 14E | Yes |
| Final order of a state securities, banking or insurance regulator, or a federal banking regulator, that bars you or is based on fraudulent, manipulative or deceptive conduct | Yes, Section 14D | Yes |
| A false answer on a registration application | Not a question. You certify your answers are true, under administrative, civil or criminal penalties | Yes, a finding that you willfully made a false statement in an application is on FINRA's list |
Not having to disclose something does not mean the firm will not see it. As part of registering you, the firm gets your FBI fingerprint result and runs a public records search. A statutory disqualification is the bar FINRA's rules set. Everything else is weighed by the firm and by every state where you register, each under its own law, and this page does not predict how any of them will decide.
What if your felony conviction is recent?
The window runs from the date of conviction, not from the end of a sentence or probation.
Exchange Act Section 3(a)(39) makes a conviction for a listed offense, or any other felony, within 101 years of the application a statutory disqualification, and FINRA's By-Laws apply that to anyone joining or working for a member firm.
Inside that window, the only way in runs through a firm.
A firm decides whether to sponsor you
You cannot apply on your own. The firm either files an eligibility application (MC-400) to sponsor you or, if you already work there, ends your association by filing a Form U5, the notice that ends a registration.
You wait
A disqualified person generally may not associate with a member firm in any capacity until FINRA approves the application in an eligibility proceeding under the Rule 9520 Series.
The firm reports promptly
If a disqualifying event happens while you work at a firm, the firm must amend your Form U4 within 101 days of learning of it.
FINRA's statutory disqualification page lists every disqualifying event, including injunctions of any age, regulator bars, false statements in filings and certain state final orders. Read it before you rely on any summary, this one included.
Can you get an insurance license or register as an IAR with a felony?
FINRA's rules cover broker-dealer registration, meaning work at a brokerage firm. Insurance licenses and advisory registration answer to other regulators, and each applies its own test.
| License or role | Who applies the test | The rule |
|---|---|---|
| Insurance producer, including advisors who sell annuities or life insurance | Your state insurance regulator | Federal law (Section 1033 of the federal criminal code) bars anyone convicted of a felony involving dishonesty or breach of trust from the insurance business unless an insurance regulator gives written consent. The statute sets no time limit |
| Investment adviser representative (IAR), the person who gives advice for a fee, usually after the Series 65 | The SEC and the state securities regulator | Investment Advisers Act Section 203(e) and (f) let the SEC deny, suspend or bar an adviser or associated person convicted within 107 years of a listed felony or misdemeanor, or of any other crime punishable by a year or more in prison. States decide under their own securities laws, and FINRA's window does not limit what a state may consider. Minnesota's law, for example, lets the state deny a registration, when it finds that is in the public interest, to anyone who "has been convicted of a felony", with no time limit on that clause |
| CFP certification | CFP Board | Separate fitness standards that sort conduct into an absolute bar, current ineligibility or a petition for review. See CFP certification requirements |
Your state's securities and insurance regulators are listed on the state-by-state guides.
Can you be a financial advisor with a misdemeanor?
A misdemeanor is a FINRA bar only if it is a listed kind and the conviction falls inside the same window that applies to felonies.
Other misdemeanors are not a FINRA bar, though a firm or a state may still weigh them. Two lists decide this, one for what you disclose and one for what disqualifies you, and they are close but not the same.
| List | What is on it | What it does |
|---|---|---|
| Form U4 Section 14B | Misdemeanors involving investments or an investment-related business, fraud, false statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these | Sets what you disclose. Covers charges as well as convictions, with no time limit |
| Exchange Act Section 15(b)(4)(B) | Securities offenses, false oaths and false reports, bribery, perjury, burglary, offenses arising from the business of a broker, dealer, adviser, bank or insurer, larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, misappropriation, and federal mail, wire, bankruptcy and other fraud and false statement crimes | Sets which misdemeanor convictions disqualify, for the same window as a felony, counted from conviction |
Three definitions from FINRA's Explanation of Terms change answers.
- Charged means accused of a crime in a formal complaint, information or indictment. An arrest alone is not a charge.
- Felony, in a jurisdiction that does not split felonies from misdemeanors, means an offense punishable by at least 18 year in prison or a fine of at least $1,0008.
- A general court martial counts as a felony.
Do you have to disclose a pardoned, set-aside or expunged conviction?
FINRA's interpretive guidance answers these directly, and it judges a court order by what it does, not by what it is called. Expungement and record sealing are state law and vary widely.
| Situation | What FINRA says about reporting |
|---|---|
| Pardon | Still reported. A pardon releases you from punishment but does not remove the conviction |
| Conviction set aside | FINRA says a copy of the court's order should go to its Registration and Disclosure staff, who review each order. If the order puts you back where you would have been with no conviction, FINRA treats the conviction as not reportable. If it only restores civil rights, the conviction still is. The charge may be reportable either way |
| Expunged or sealed record | FINRA's answer does not name sealing. It separates an order that expunges or otherwise removes the conviction from one that only restores rights, and its staff review each order |
| Pre-trial diversion | Reported if formal charges were filed |
| Military court | Felony and listed misdemeanor charges and convictions are reported. Summary courts-martial are not |
| Dishonorable discharge | Not reportable on its own. The charge behind it may be |
Veterans have more on discharge and court-martial reporting in from military service to financial advisor.
Can you be a financial advisor with bad credit or a bankruptcy?
Yes, as far as FINRA's rules go.
Neither is on FINRA's list of statutory disqualifications, but both can show up on your Form U4. Form U4 asks whether you settled with creditors or filed for bankruptcy in the past 102 years (Section 14K), whether a bonding company ever denied, paid out on or revoked a bond for you (Section 14L), and whether you have unsatisfied judgments or liens today (Section 14M). The hiring firm sees those answers and decides what it accepts.
Does the background check include a credit check?
Not by FINRA's rule, though a firm may run one.
- The required search. As part of verifying your Form U4, the firm must search reasonably available public records (FINRA Rule 3110(e)). FINRA's notice on the rule says those records include, at a minimum, criminal records, bankruptcy records, judgments and liens, and that the requirement "does not require firms to obtain a credit report".
- Your consent. Signing the Form U4 authorizes employers and others to share information about you, including your creditworthiness, and allows an investigative consumer report. So a firm may pull a credit report even though the rule does not require one.
FINRA's interpretive guidance settles details that change your answers.
| Situation | What FINRA says |
|---|---|
| You settled one debt with one creditor for less than you owed | A compromise with a single creditor is enough to trigger Section 14K |
| You sold a home in a short sale | Reportable under Section 14K if the lender forgave some or all of what you owed. Any unpaid judgment that follows goes under Section 14M |
| You changed a loan's repayment terms without reducing what you owe | Not a compromise with creditors |
| You pay court-ordered child support and are current | Not reported under Section 14M. Only unsatisfied judgments or liens are |
| A judgment or lien goes unpaid and you then pay it within a few weeks | Still reported, within 309 days of learning of it, even if paid before then |
What are the Form U4 disclosure questions?
Form U4 is the uniform application a firm files to register you with FINRA and the states.
Section 14 holds the disclosure questions, and every yes answer needs a Disclosure Reporting Page with the details. The full wording is in the Form U4 itself, and the answers turn on its defined terms, so read the form, not a summary.
| Form U4 question | Topic | What it asks, in plain words |
|---|---|---|
| Section 14A | Felonies | Ever convicted of, pleaded guilty or no contest to, or charged with any felony, in a domestic, foreign or military court. Also organizations you controlled |
| Section 14B | Listed misdemeanors | The same for misdemeanors in the Section 14B categories |
| Section 14C | SEC and CFTC actions | Findings of false statements, violations or orders against you |
| Section 14D | Other regulators | Federal, state and foreign regulator findings, license denials, suspensions or revocations, and state final orders based on fraud |
| Section 14E | SROs | Findings, expulsions, suspensions or bars by FINRA or another self-regulatory organization |
| Section 14F | Professional licenses | An authorization to act as an attorney, accountant or federal contractor revoked or suspended |
| Section 14G | Pending matters | Written notice that you are the subject of a regulatory proceeding or investigation |
| Section 14H | Civil court | Court injunctions or findings tied to investment-related activity |
| Section 14I | Customer complaints | Sales practice complaints, arbitrations and lawsuits |
| Section 14J | Terminations | Leaving a job after allegations of investment rule violations, fraud, wrongful taking of property or failure to supervise |
| Section 14K | Bankruptcy and creditors | Compromises with creditors and bankruptcy petitions in the past 102 years |
| Section 14L | Bonds | A bond denied, paid out or revoked |
| Section 14M | Judgments and liens | Any unsatisfied judgments or liens now |
You answer every question. Section 14A, Section 14B and Section 14K to Section 14M ask about events that do not depend on a securities career. Section 14D also applies if a state or federal regulator, including an insurance department, ever acted on a license you held (from insurance agent to financial advisor covers that move), and Section 14F if you held an attorney, accountant or federal contractor authorization (from accountant to financial advisor). Most of the rest turn on investment-related activity. The form also asks about other business you do outside the firm, and it is not a one-time filing. You agree to keep it current whenever an answer changes.
Form U4 vs Form U5. A firm files the Form U4 to register you and to update your record. It files the Form U5, the Uniform Termination Notice for Securities Industry Registration10, when your registration with that firm ends.
What does the financial advisor background check cover, and who sees it?
The background check for a financial advisor runs in a set order under FINRA's rules, from the firm's own check to your fingerprints to state approval.
If you are still in another job, none of it happens while you study for exams. It starts when a firm decides to hire you.
The firm checks you first
Before it applies to register you, the firm must investigate your good character, business reputation, qualifications and experience (FINRA Rule 3110(e)).
The firm files your Form U4
FINRA's Form U4 page says individuals cannot start or submit a Form U4. You can work on a draft only if the firm turns that on, and you certify that you reviewed and approved what the firm files, including every disclosure.
A filing with a disclosure costs the firm FINRA's $1556 disclosure processing fee on top of the $1256 registration fee, per FINRA's fee schedule as read October 20261,6.
You get fingerprinted for FINRA registration
Federal law, Exchange Act Section 17(f)(2), requires broker-dealer employees who sell securities to be fingerprinted, through the FINRA Fingerprint Program. Prints must reach FINRA within 303 days of the Form U4 filing, or your status becomes Inactive Prints and you must stop doing business until they are processed.
Prints submitted before, and prints taken for any other job or purpose, cannot be reused.
The FBI result goes to the firm
The FINRA fingerprint FAQ says results are posted in CRD, FINRA's registration database, for the firm's authorized users, typically within 484 hours.
The firm verifies your answers
Its written procedures must check your Form U4 for accuracy and completeness within 305 calendar days of filing, including a search of public records.
What becomes public
Under FINRA Rule 8312, FINRA releases information reported on your most recently filed Form U4 to the public while you work at a member firm and for 1011 years after you leave. A reported criminal conviction or guilty or no contest plea stays public after that. Private details such as your Social Security number and home address are not released.
How to get sponsored for the Series 7 covers the hiring side of this.
Common mix-ups
Articles on this question, recent ones included, still repeat these.
| What you may read | What the rules say |
|---|---|
| A felony, even a financial crime, keeps you out for life | The FINRA bar for a conviction lasts 101 years from conviction, and inside it a firm can still apply to sponsor you, with FINRA deciding. Insurance consent and state denial grounds can reach further back |
| Once the bar ends, the felony no longer matters | You still disclose it, because Section 14A asks if you have ever been convicted or charged. The firm still reads it, and a state may weigh it under its own law, which can carry no time limit |
| A sealed or expunged record never has to be reported | FINRA's guidance does not say that. It depends on what the court's order does (see the pardon and expungement table above) |
| Every advisor must pass the Series 7, so FINRA is the only check | Advisors who give advice for a fee often take the Series 65 instead and register with their state, which runs its own review. See which licenses financial advisors need |
Questions people ask
Can you be a financial advisor with a felony?
In some cases, and in others the record stops you. A felony conviction in the last 101 years is a statutory disqualification under FINRA's rules, so you cannot work at a member firm unless a firm files an eligibility application for you and FINRA approves it. An older felony is not a disqualification, but Form U4 asks if you have ever been charged or convicted, so you disclose it and the firm and each state review it. Insurance work also needs regulator consent for a felony involving dishonesty or breach of trust.
What is a statutory disqualification?
It is a status set by Exchange Act Section 3(a)(39) that bars a person from a FINRA member firm unless FINRA approves them through an eligibility proceeding. It covers felony convictions and certain misdemeanor convictions for a set window from conviction, securities-related injunctions of any age, regulator and SRO bars, willful false statements in filings, and certain state final orders. Credit problems and bankruptcy are not on the list.
Can you take the SIE or Series 65 with a criminal record?
Yes. FINRA says association with a firm is not required to take the SIE, which is open to anyone 1812 or older, and NASAA says no sponsor is needed for the Series 63 or 65. NASAA lists a background check among the state licensing steps that come after the exam, not before it. Your record comes up when you apply to register, so you can take these while still in another job. Passing an exam is not a license and does not mean you will be registered. The order of exams is in which licenses financial advisors need, and exam prep is on Advisor Train.
Can you be a financial advisor with a DUI?
Neither list in the misdemeanor section above names drunk or impaired driving, so a DUI charged as a misdemeanor falls outside both as they are written. A DUI charged as a felony is different. It is a Section 14A question, and a felony conviction inside FINRA's window is a statutory disqualification. How your own case was charged is in the court record, the firm still sees your FBI fingerprint result either way, and if you are unsure how the lists apply to you, ask the regulator or an attorney.
Sources
FINRA GPO NASAA Minnesota Office of the Revisor of Statutes Show sourcesHide sources
FINRA
- General Information on Statutory Disqualification and FINRA’s Eligibility Proceedings, Page as read October 29, 2026.finra.org, accessed October 29, 2026
- Form U4, Uniform Application for Securities Industry Registration or Transfer, Form U4 Rev. 05/2009.finra.org, accessed October 29, 2026
- Fingerprints FAQ, Q34, as read October 29, 2026.finra.org, accessed October 29, 2026
- Fingerprints FAQ, As read October 29, 2026.finra.org, accessed October 29, 2026
- FINRA Rule 3110(e), Responsibility of Member to Investigate Applicants for Registration, Rule as read October 29, 2026, paragraph (e) effective July 1, 2015.finra.org, accessed October 29, 2026
- Fee Schedule (Classic CRD), as read October 29, 2026.finra.org, accessed October 29, 2026
- Form U4 and U5 Explanation of Terms, As read October 29, 2026.finra.org, accessed October 29, 2026
- Form U4 and U5 Interpretive Questions and Answers, Answers dated 1998 to 2020 as posted, read October 29, 2026.finra.org, accessed October 29, 2026
- Form U5 (Rev. 05/2009), Form revision 05/2009, as read October 29, 2026.finra.org, accessed October 29, 2026
- FINRA Rule 8312, FINRA BrokerCheck Disclosure, Rule as read October 29, 2026.finra.org, accessed October 29, 2026
- Securities Industry Essentials (SIE) Exam, FINRA SIE exam page, as read October 29, 2026.finra.org, accessed October 29, 2026
- Form U4.finra.org, accessed October 29, 2026
- Regulatory Notice 15-05, SEC Approves Consolidated FINRA Rule Regarding Background Checks on Registration Applicants.finra.org, accessed October 29, 2026
- Fingerprints.finra.org, accessed October 29, 2026
GPO
- 15 U.S.C. 80b-3(e) and (f), Investment Advisers Act Section 203(e) and (f), United States Code 2024 Edition, read October 29, 2026.govinfo.gov, accessed October 29, 2026
- 18 U.S.C. 1033, Crimes by or affecting persons engaged in the business of insurance.govinfo.gov, accessed October 29, 2026
- 15 U.S.C. 78o, Registration and regulation of brokers and dealers.govinfo.gov, accessed October 29, 2026
- 15 U.S.C. 78c, Definitions and application.govinfo.gov, accessed October 29, 2026
NASAA
- Exam FAQs.nasaa.org, accessed October 29, 2026
Minnesota Office of the Revisor of Statutes
- Minnesota Statutes 80A.67, Denial, revocation, suspension, withdrawal, restriction, condition, or limitation of registration.revisor.mn.gov, accessed October 29, 2026