If you’re just starting to branch into the financial services industry, you’re likely overwhelmed with the number of licenses that are available to obtain. Why are there so many licenses, and which ones are right for you?
Before taking any exams, you must first determine what path you want your career to take. Which financial securities do you want to provide to your client? Do you want to go with more conservative investments, like life insurance? Or do you want to provide higher-risk assets, like stocks or options? Do you want to be a financial or investment advisor? How about a retirement specialist?
Suppose you want to focus on products that are generally more secure and involve minimal levels of speculation, like mutual funds and variable products. In that case, you will need to pass the Series 6 Exam.
What is a Series 6 License
The Series 6 License, also referred to as a registration or qualification, allows you to become a company’s registered representative who sells certain products, like mutual funds, variable products (e.g., annuities and life insurance), unit investment trusts, and municipal fund securities (e.g., 529 plans). If you have a Series 6 securities license, you have started on a career path in the financial services industry. Some of these roles may be as a financial planner, retirement plan specialist, or mutual fund representative.
A person with a Series 6 license is not permitted to sell individual securities such as stocks, exchange-traded funds, bonds, or options.
Why You Need a Series 6 License
A Series 6 License is used by many as the first stepping stone to a successful financial career. For those starting with a job in the mutual fund industry, it’s the first license you’ll need to obtain before moving on to other licenses. You might think of this license as one that offers an entry into the financial services industry, providing you with an understanding of the products used by many to build assets for retirement.
Reasons to Take the Series 6 Exam
Taking the Series 6 exam can be a valuable investment in your career in the financial industry. Top four reasons would include:
Career advancement: It is a widely recognized credential that is a kick-off to your career and demonstrates your knowledge of mutual funds and variable contracts and the ability to recommend these products. Various financial institutions, including brokerage firms, insurance companies, mutual fund companies, and banks, employ individuals with a Series 6 license.
Increased earning potential: Many financial firms offer higher salaries or commission rates to individuals who hold professional licenses such as the Series 6. Passing the exam can therefore increase your earning potential in the industry.
Expanded product offerings: Passing the Series 6 exam allows you to sell certain types of securities products such as mutual funds, variable annuities, 529 plans, and unit investment trusts. This can broaden your product offerings and make you more valuable to your clients.
Professional credibility: Holding a Series 6 license can enhance your professional credibility with clients and colleagues. It demonstrates your commitment to the industry, your dedication to providing high-quality financial advice and services and elevates you to a different position within your firm.
Before Taking the Series 6 Exam
Before taking the Series 6 exam, you must be sponsored by a member of a self-regulatory organization or by a Financial Industry Regulatory Authority (FINRA) member to take the exam. After taking and passing your exams, you must register with FINRA through your sponsoring company to be able to recommend and sell securities.
The Series 6 license is a corequisite for the SIE Exam, also known as the Securities Industry Essentials Exam. The SIE is different in the fact it does not require a sponsor. A passing score on both exams is a requirement for obtaining the Series 6 license. In addition, most states require you to pass the Uniform Securities State Law Examination (Series 63) before offering securities in their state. If you intend to offer variable annuities or variable life insurance you will also need to obtain a life insurance license.
Preparing for the Series 6 Exam
The exam is not just a formality. Passing the Series 6 Exam does take some preparation. The average student studies for 40-50 hours before taking the test. This involves understanding the topics covered in FINRA’s Series 6 Content Outline.
How to Obtain a Series 6 License
In order to obtain a Series 6 license, you need to pass the Series 6 exam, which is also known as the Investment Company and Variable Contracts Products Representative Exam. This exam has four different sections:
Section 1 (covers 24% of the exam, 12 questions): Seeks Business for the Broker-dealer from Customers and Potential Customers
Section 2 (covers 16% of the exam, 8 questions): Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives
Section 3 (covers 50% of the exam, 25 questions): Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records
Section 4 (covers 10% of the exam, 5 questions): Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions
The Series 6 Exam is administered through FINRA. It is a multiple-choice exam with 55 questions (50 scored and five unscored). To pass, you need to score a 70% or above, answering a minimum of 35 questions correctly. The cost of the exam is $75. You’ll have 90 minutes to complete the exam.
If you do not pass on your first try, you must wait 30 days until you can retake the test. If you do not pass this second time, you must wait another 30 days. If you do not pass on your third attempt, you must wait 180 days.
Tests may be taken remotely or at a local test center. Both of these options go through Prometric, the vendor used by FINRA. More than one exam may be taken at a time. For example, you can take your SIE and Series 6 on the same day.
How Long is a Series 6 License Valid
The Series 6 license is valid as long as you remain registered and in good standing with FINRA for the duration of your employment with your sponsoring firm. If you leave the firm or your registration lapses, your Series 6 license will no longer be valid.
After having the license for one year, you must satisfy FINRA’s Regulatory Element of continuing education. This will cover content specifically tailored to your registration category and must be completed annually by December 31.
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