The Financial Industry Regulatory Authority (FINRA) is the regulatory body responsible for maintaining and administering all of the licenses associated with the securities industry. Any job that requires the sale of securities also requires acquiring a FINRA license. Two common FINRA licenses are the Series 6 and Series 63 securities licenses, which are popular among insurance sales professionals.
What Are the Series 6 & 63 licenses?
The Series 6 and 63 licenses are often mentioned together because they are the two necessary licenses required to sell insurance policies tied to investments. While any securities professional can benefit from having a Series 6 license, this is a license specifically tailored for insurance professionals. Sales professionals need a securities sales license to do business because the vast majority of insurance/financial products are packaged with securities.
Series 6 Securities License
The Series 6 Securities Sales License is known more formally by FINRA as the Limited-Investment Securities License. It covers groups of securities that are sold together as a single unit. Examples of these types of securities are mutual funds, variable annuities, and indexed life insurance. Since the majority of life insurance products are grouped with securities, the Series 6 license is required for all insurance sales professionals throughout the United States who wish to sell those types of policies.
Series 63 Securities License
FINRA is the primary licensing body for securities sales professionals, but it is not the only administrative body in the industry. The North American Securities Administrators Association (NASAA) is the other licensing entity and it is responsible for the Series 63 license.
The Series 63 is an administrative license that deals primarily in the securities laws that affect securities sales in each state. In order to sell securities or variable insurance in any state in the US, you will need both the Series 6 and Series 63 licenses
Note: If you have aspirations of being a sales manager in a securities or insurance firm, then you will also need to earn your Series 26 license, along with your Series 6 license. The Series 26 is required by anyone who supervises Series 6 professionals, such as managers and firm principals.
Are There Any Prerequisites to Taking the Series 6 and 63 Exams?
On October 1, 2018, FINRA will change the co-requisite or pre-requisite a candidate must meet to take any of the Series exams. A new exam called the Security Industry Essentials (SIE) exam will be implemented, which will eliminate the duplication of content in all of the Series exams. The SIE could be required before you can take the qualifying exams to become a licensed securities professional.
The SIE will be an exam open to anyone over the age of 18 who wants to enter the securities or insurance sales industries. It is anticipated that most agencies that require the sale of life insurance or other securities will expect a new hire to already have an SIE certificate. Since it is an open exam, it can be taken, at any of the qualifying FINRA testing facilities, without FINRA sponsorship.
To take your Series 6 exam, you may finish the SIE exam first and be sponsored by an accredited securities or insurance sales organization. The SIE exam will allow the Series 6 exam to focus more on securities-specific questions instead of background material, but the SIE will have no effect on the content found in the Series 63 exam.
For more information on the upcoming SIE exam, check out our article: What is the Securities Industry Essentials Exam?
What Can You Do With Series 6 and 63 Licenses
The Series 6 license allows you to sell packaged securities as part of a comprehensive investment program. For example, the investment side of a whole life insurance policy might be a mutual fund, which is made up of a variety of different securities.
Some of the securities products you can sell include:
- Mutual funds (closed-end funds on the initial offering only)
- Variable annuities
- Unit Investment Trusts
- Variable life insurance products
- Municipal fund securities (e.g. 529 savings plans, local government investment pools) (LGIPs)
Some of the securities products that you cannot sell include:
- Individual stocks
- Individual bonds
If you only have a Series 6 license, then you cannot sell individual company securities or options. You are not licensed to take stock orders from customers, and you are not allowed to trade options. These products fall under the Series 7 and other licenses and are generally not associated with insurance products.
The Series 63 is a state-required license, and will allow you to use your Series 6 license, but does not open any more products to market or sell.
The Purpose of the Series 63
The Series 63 license is specific to the securities laws of each state, which is why it is a necessary addition to the Series 6 license. In order to use your Series 6 license in your state, you must pass the state's version of the Series 63 license exam. If you move from one state to another, you must take your new state's Series 63 exam to begin working in the securities or insurance industries in that state.
What Is the Difference Between a Series 6 and a Series 7 License?
The Series 6 license is a limited securities sales license that is required for insurance sales professionals. However, the Series 7 is a broader securities sales license that is required for stockbrokers.
A Series 6 sales professional can only sell securities products that are packaged together with other products, such as life insurance. A Series 7 sales professional can sell all types of stocks, stock options, bonds and any other related securities products. Any Series 6 licensed sales professional is allowed to take the Series 7 exam, should they want to broaden their ability to sell a variety of securities.
How To Get the Series 6 and 63 Licenses
Starting October 1, 2018, aside from being sponsored by a FINRA-Accredited Firm, you must also take SIE Exam as a co-requisite for the Series 6 Exam. In contrast, Series 63 does not require SIE Exam.
Getting the Series 6 License
To take the Series 6 license exam, you must first register to become a member of FINRA by using the online form that is available through the FINRA website. After you have registered, you will have 120 days to sign up for the Series 6 exam.
Getting a Series 63 License
While the NASAA creates and maintains the Series 63 exam, the exams themselves are administered by FINRA.
You can register to take your Series 63 exam online in the same way you would register for a Series 6 exam.
Check out our Series 6 & 63 Exam Guide. It's extremely in-depth and will help you pass the first time.
What Other Licenses Do Insurance Sales Professionals Need?
The licensing requirements for each state to become an insurance sales professional are different. But, in general, you need more than a Series 6 and Series 63 license to sell insurance in your state. The other licenses required to sell insurance in most states include:
Property and casualty licenses are not generally associated with insurance products that require a FINRA license, but they are a great addition to any insurance agent’s repertoire.
What Kinds of Jobs Can I Get With Series 6 And 63 Licenses?
When you pass your SIE, Series 6, and Series 63 exams, along with the proper state insurance licenses, you are eligible for a job at almost any level in the insurance industry. You can become a sales representative, a broker, or opt for insurance marketing. If you will be managing other agents with Series 6 and 63 licenses, then you will also need to obtain your Series 26 license.
What Is the Average Salary of Series 6 And 63 License Holders?
Providing the complete details of an average salary for any securities job is difficult, as the positions held, location, experience, company, and other variables can make huge impacts on the salary of an individual. The below numbers are a general average of licensed individuals, but the range could include extremes on the higher, or the lower side.
As of March 2018, the salaries for a financial advisor in the United States range between $57,000 and $166,000.
If you are interested in insurance sales and want to enter into the highly lucrative world of life insurance, then the Series 6 and 63 licenses are a necessity. These, in addition to your state’s insurance licenses, are the gateway to getting started in your new career.