Getting a securities license is a major milestone for those working in the financial services industry. A securities license is required to market and sell securities, a common responsibility for financial advisors and insurance agents alike. The process to get your securities license starts with determining the right securities license for your position and professional goals.
There are two main types of securities licenses that you need to get: those administered by the Financial Industry Regulatory Authority (FINRA) and those from the North American Securities Administrators Association (NASAA). Both types are required for financial service professionals.
You will need to get multiple securities licenses to be able to market and sell securities.
The securities license that you get depends on the role that you have within your sponsoring company, firm, or organization. No matter what securities license you pursue, preparing with a study course will ensure that you pass the test on your first attempt.
The Investment Company and Variable Contracts Products Representative Qualification Examination, more commonly referred to as the Series 6 license, allows license holders to include mutual funds within the investment and insurance products that they offer. This exam is the more basic of the two main FINRA license exams.
You must be sponsored by a FINRA-member firm, company, or organization in order to register for the Series 6 exam. Getting a Series 6 license is often the first of the FINRA licenses that financial service professionals pursue.
The Series 6 exam consists of 50 scored questions and 5 additional unmarked and unscored pretest questions. It covers four main job responsibilities that a Series 6 license holder can be expected to perform.
Once you hold a Series 6 license, you will be on your way to being able to solicit, purchase, and sell mutual funds, variable annuities, variable life insurance, unit investment trusts, and municipal fund securities. You will need to get a NASAA securities license to be fully licensed to market and sell these products. Insurance agents often get the Series 6 and Series 63 licenses.
For a more comprehensive securities license, many financial advisors work toward the FINRA Series 7 license, also called the General Securities Representative Exam. The Series 7 supersedes the Series 6, however, the Series 6 is not a prerequisite to register for the Series 7 exam.
The Series 7 exam includes 125 scored and 10 unscored pretest questions, for a total of 135 test questions. The four job functions of a Series 7 license holder are the same as those for the Series 6.
The Series 7 allows license holders to market and sell more securities-based products. If you plan to work as a financial advisor, you will probably need to hold a Series 7 license. Securities-based products covered with the Series 7 include:
Because the Series 7 test is much more comprehensive, it includes more questions and requires a lot of preparation. A study course is the best way to prepare for and pass this challenging exam. It covers a lot of securities-based products and is considered the gold standard license within the financial services industry.
The Series 63 is a securities licensing exam that focuses on state laws and regulations. The Series 63 exam was developed by NASAA to license securities agents to take and process orders. It often goes alongside the Series 6 exam and is common for bankers, insurance agents, and other financial services professionals.
The Series 63 is especially important for life insurance agents to have in order to provide the best options for client products.
Once you register to take the Series 63, you have 120 days to take the exam. The Series 63 test is 65 questions, 5 of which are unscored pretest questions. You need to answer at least 43 questions correctly to pass the exam.
The Series 65 exam is another NASAA license test and is for those who will offer investment advisory services. It also covers state regulations, but is more comprehensive and allows license holders to give advice, rather than just make transactions related to securities.
Being able to offer financial advice related to securities can greatly increase the services you are able to offer to clients.
The Series 65 test has 140 questions, including 10 pretest questions. A passing score consists of at least 94 correct answers.
You will need to be sponsored by a FINRA-member firm, company, or organization to take both the Series 63 and 65 exams.
The Uniform Combined State Law Exam, also called the Series 66, takes the place of the Series 63 and Series 65 licenses. If you choose to take the Series 66, you will not need to take any other NASAA licensing exams. You will still need to take and pass the Series 6 or Series 7 exam to market and sell securities.
With the Series 66 license, you will be able to perform all of the functions covered under the Series 63 and Series 65, including taking and processing orders as well as giving advice on securities-related products.
The Series 66 exam has 100 scored questions and 10 unscored questions. You need to answer at least 73 scored questions correctly to pass.
Once you determine which securities license you need to get, you can begin the process of studying for your exam and completing your license application. If you are not working in the financial services industry, you can include job hunting in your process to find the best position for your professional goals.
Before you can take a licensing exam, you need to pass the Securities Industry Essentials (SIE) exam. This basic FINRA test began in October 2018 as a way to demonstrate basic knowledge of the securities industry. You do not need to be sponsored or employed as a financial services professional to take the SIE exam.
You will need to be sponsored by a firm, company, or organization that is a member of FINRA before registering for the Series 6 or Series 7 exams. If you are already working in the financial services industry, talk to your employer about registering for an exam. Many will even pay for all fees and associated costs, including a study course.
If you are not working as a financial services professional, having the SIE on your resume can help during your job search. It shows that you already have the basic knowledge of the industry and are committed to your new career.
Do not be afraid to ask for your employer or prospective employer to have a role in your securities licensing process. This can include covering exam registration costs, paying for a study course, or providing at-work time to study for your exam.
To register for an exam, you will submit the Form-U4 through FINRA’s Web Central Registration Depository, CRD. Your firm’s human resources or professional development office can help you complete all required registration forms. You will need to provide:
The application process can be completed online or by submitting a hard copy of the form. Your firm’s designated representative will need to sign your application form.
Preparation is the key to passing any licensing exam. The FINRA Series 6 and Series 7 exams cover a lot of material. While FINRA provides comprehensive content outlines for both the Series 6 and Series 7 tests, a study course will help you master everything that you need to know to pass the exam.
You should also plan time to take practice exams. This helps you gauge your preparation and become more familiar with the exam format.
Each exam covers different topics and has its own test length.
All tests are delivered on the computer at an independent test center. If you have not taken a computer-based exam before, it is important to take practice tests ahead of time. You will be given 30 minutes at the test center to go through a tutorial. However, it is best to already be familiar with the test format to be more confident on test day.
Once you are prepared and registered to take your exam, make sure to get a good night’s rest before your exam and eat a healthy breakfast on test day. You will receive guidance from the testing center with directions, check-in instructions, and a list of prohibited items.
Things not allowed at the test center include:
You can apply for accommodations, such as a wheelchair-accessible testing station or the approved use of a hearing aid, if needed ahead of registering for your exam. You will need to bring a photo ID and your test registration.
Permitted items include eyeglasses, required medications, wedding bands, and light sweaters or sweatshirts. Be prepared to turn out your pockets and push up your sleeves to show that you are not bringing in any prohibited items.
FINRA and the testing centers take cheating very seriously. It is best to only bring approved items and the confidence that you are ready to pass your exam.
You need to hold a valid securities license to market and sell securities. To determine which type of license to pursue, consider what type of securities-based products fit your business model and role. A study course is not required, but is highly recommended to adequately prepare for your securities license exam.
Before you can take your securities license exam, you will need to pay a fee to take the test.
You will need to pay additional costs and fees associated with the securities licensing process. These include a study course and the SIE exam. Talk to your sponsoring firm, company, or organization about covering some of these costs. You may even be able to include study time in your workload and be paid to prepare for your licensing exam.
The Series 7, one of the most popular securities licenses, is valid for the entire time that you continue to work at your sponsoring firm, company, or organization. If you are fired, your securities license is voided.
If you choose to leave your position or employer, your license will remain valid for two years. You will need to find new employment at a firm, company, or organization that will continue to sponsor your securities license before those two years are expired.
All of the other securities licenses follow the same protocols. As long as any gaps in employment at a FINRA-member firm, company, or organization do not exceed two years, your securities licenses will not expire.
The Series 6 license allows you to market and sell mutual funds, variable annuities, and some insurance products. For insurance agents, CPAs, and some other financial service professionals, offering these products fits their business model.
The Series 7 license is more comprehensive and necessary for bankers and financial advisors. The Series 7 exam is longer and costs more, but allows license holders to offer a wider range of products for their clients.
Information on this page has been gathered by a multitude of sources and was most recently updated on August 2020.
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