Or does that only occur when characters buy advances?

Nothing says that they cannot.

jh

But I believe the spells cost more advances if they are over the wizards rank. A rank 1 wizard would pay 2 advances for a rank 2 spell and 3 advances for a rank 3 spell. You could use that at creation as well, demanding two action cards to be spent to buy one rank 2 spell.

There is also the rule in Winds of Magic that makes it harder to cast spells of a higher rank than your character... 1 purple dice for each difference in rank I seem to remember (someone correct me if I'm wrong). This also increases the chances of miscast and corruption....

Of course if you don't have WoM then that rule doesn't exist for you!