Those who are interested in a career as a securities trader must take and pass the series 6 and 63 license exam. The series 6 license is the minimum requirement for brokers to sell annuities and mutual funds. The larger Wall Street banks require that all of their brokers a series 6 license at a minimum. However, the larger firms also require their brokers to hold the series 7 license in combination with the series 6. This license allows brokers to sell individual stocks along with mutual funds and variable annuities.
The series 63 exam tests an individual’s knowledge with relation to securities regulations, compliance issues, ethical business practices and how a brokerage operation is required to operate based on the rules set forth by the Securities and Exchange Commission. Most states in U.S. require bank employees to hold this license if they are selling any type of security. The license is used to demonstrate the employee’s competence when it comes to best business practices.
It is important to understand who is required to hold a license and who does not need a license. Individuals who wish to purchase securities through a brokerage house or online stock trading company are not required to hold any license. They may purchase equities however they see fit. The actual trader who executes the transaction is the person who is required to hold the license based on the type of transaction. If a customer is looking to purchase a large block of mutual fund shares, the trader who works for the brokerage house must hold a series 6 license. The same holds true for customers wishing to purchase individual stock, the trader who executes the transaction must hold a series 7 license. It is often times very confusing for individual investors who believe they need a license in order to execute a purchase. The fact is, individuals who are not employed by a broker/dealer do not need a license to execute trades.
One final note of very high importance, any individual wishing to obtain any type of license must be employed and sponsored by the brokerage house. Individuals cannot take the exams unless the company that they work for gives them a sponsorship. Therefore, individuals who are looking to obtain a license, but do not work for a registered broker are unable to take the exam. The National Association of Securities Dealers provides valuable information on the guidelines behind the series 6 and 63 license exam.
The financial industry is a vital pillar supporting the US as well as world economy. Trades worth trillions of dollars are transacted every day. There is need for supervisory regulation to ensure corporate clients and individuals do not lose investments in dubious schemes. This is why the Financial Industry Regulatory Authority (FINRA) was set up to address these challenges. A securities license is the key that will open the investments door. It is not a straightforward affair as there are factors which determine the type of license required. The following guide will take you through the importance of securing a securities license and how to get one.
Importance of Licensure
To begin with, you will be able to handle financial instruments as a broker or dealer. Without licensure it would be impossible to get an opening in the financial industry. The securities license shows that you have extensive knowledge of security markets operations, securities laws, as well as financial products. An individual with such knowledge is capable of handling investments properly. This means being able to analyze financial market fundamentals and investment risk factors. Some of the investment tools you will be handling include stocks, open-end funds, options, and bonds. There are many brokerages and security firms ready to employ individuals with the right skills in addition to licensing. Salaries for new entrants hover around $50,000 every year. The annual pay package if you stick around for several years can be as high as $175,000.
How to Get a Securities License
You can only get a securities license by way of sponsorship from a broker-dealer. In addition to the sponsorship, you will have to undergo rigorous preparation before sitting for the licensing exam. Even after acquiring the license, it is advisable to keep up to date with continuous education. The majority of employers fall into two broad categories, retail and independent. Licensing requirements differ with independent broker-dealers taking a more liberal approach. FINRA oversees the administration of exams and licensing procedures. There are three main licenses that every person working with financial instruments must obtain. These are the limited-investment securities license (series 6), the general securities representative license (series 7), and series 3 license. You should also take note that FINRA does not administer all licenses. The North American Securities Administrators Association (NASAA) also offers some key licenses. These are the uniform securities agent license (series 63), series 65, and series 66 licenses. You must achieve a score of 70 percent in both FINRA and NASAA examinations to be licensed. However, the pass rate for series 63, 65 and 66 is a little bit higher. You will have to score 72 percent, 72 percent and 75 percent respectively to have any chance of receiving licensure. After passing the requisite exams, you have to register the securities license with an approved a broker-dealer.
Individuals who would like to pursue a career as stockbrokers or security traders must pass the series 63 exam. The Financial Industry Regulatory Authority (FINRA) administers this examination on behalf of the North American Securities Administrators Association (NASAA). After successfully passing the examination, you are qualified to trade securities in all states. The examination consists of 65 multiple choice questions which must be completed within 75 minutes. Since January 2010, candidates must score at least 72 percent in order to pass the exam. It is important for candidates to prepare thoroughly before sitting for the exam. The following guide will take you through the most important series 63 exam prep steps.
There is no shortcut to success other than taking up a training course to prepare you for the exam. This will help you get to grips with the question and answer format that is used. Consider a candidate who has never taken the time to undergo extensive training. It is likely that such a person will not be able to answer the multiple choice questions within the given time. Remember, you have 75 minutes to answer 60 questions. A simple calculation reveals that you have an average of one minute and 15 seconds to clear each question. Taking too much time to answer a single question will cut down the time you have for other questions. Constant practice will help you perfect strategies for handling complex and difficult question structures. NASAA was set up to protect the public against securities fraud. It would be suicidal for a candidate to ignore this factor while preparing for the exam. A closer look will reveal that series 63 exam prep should consider the following categories seriously.
• Business practices. Includes questions on fraudulent activities which account for 35 percent of the exam.
• Registration of persons. This is important because 30 percent of the exam questions are based on this segment.
• Registration of securities. You cannot ignore this section as it accounts for 25 percent of all questions.
• Administrative provisions. 10 percent of the exam will be based on this topic.
Create a Study Plan
Many people get anxious and stressed as the exam nears. This will happen if you fail to create an effective study plan way before the exam. Your study plan should take into account how much you need to cover, available time, exam format, and performance target. There are various strategies that have been used with success over the years. It is advisable to create summary notes of all topics that you have covered so far. These will help you retain a lot of information as well as stick to the key terms and concepts. You can also make flashcards to be used in memorization. This is a further reduction of your summary notes and should include important keywords, concepts, formulas, and bullet points. Using flashcards will act as a memory trigger and enhance recalling information.
Do not neglect yourself during the series 63 exam prep period. Make sure that you rest well and take plenty of fluids. You can improve your chances of passing the exam by taking a training course from ABTrainingCenter.com.
The Series 6 license is a credential in the financial and investment industries. It allows individuals to sell mutual funds, variable annuities, and insurance products. This expertise helps people to invest their money wisely and to save money for retirement. A person with the Series 6 license is an investment professional who works in a variety of companies.
Passing the Exam
The official name of the Series 6 license is the Investment Company/Variable Contracts Products Limited Representative license. For individuals who want take the licensing exam, they have to have a sponsor. In most cases the sponsoring company is the individual’s employer.
There are many ways to study for the exam. There are books, DVDs, online courses, and classroom instruction. Many sponsoring companies offer on-site training for employees scheduled to take the exam. Topics covered in the coursework are mutual funds, retirement planning, variable annuities, insurance products and taxation law. FINRA (Financial Industry Regulatory Authority) administers the exam through testing centers. The exam consists of 100 questions. A passing score is 70. Once a person passes the exam, he registers with FINRA as a limited representative. As a limited representative he is limited in what he can sell. Unlike a stockbroker, a limited representative cannot sell stocks, bonds or other securities.
A person with a Series 6 license has several job opportunities available. Since he needs a FINRA-member company to sponsor the exam, his first job as a licensed investment professional is with the company he is already working for. However, once a person has the license, he has many more options.
After studying for the exam, a representative has a better idea of what types of investments he prefers to deal with. It may be mutual funds, annuities or insurance products. The limited representative can then look for jobs that allow him to focus on selling these investment instruments.
There are several hundred mutual fund companies available. There is also a large number of insurance companies. Financial planners may employee those with a Series 6 license. Large brokerage houses that sell mutual fund or annuities are another choice. For representatives who enjoy writing, there are many investment publications that prefer to hire writers with licenses. Book publishers also seek writers with expertise to ghostwrite entire books or chapters of books.
For individuals with a Series 6 license, there are many career paths available. Many companies want licensed professionals who are knowledgeable and trained in mutual funds, annuities and insurance products.
If you are about to take your Series 63 Financial Certification Exam, you might be nervous and excited. Your career in securities starts with the test and will give you the qualifications and licensure you need to become a securities agent. If you want to pass your test you have to complete educational courses and then study for the exam several times. While crash courses are available, there are other ways you can prepare for the test to better your chances of passing. Make sure you consider these Series 63 test taking tips and learn about common test taking difficulties so you know what to expect.
Make Sure You Familiarize Yourself With Terms
All of the terminology you learned in your classes will be found in your test. Terms like agents, broker-dealers, securities, administrator, and investment advisers will be found on the test. Because candidates are only given 75 minutes to complete 60 questions, you should familiarize with all of the terms so you do not have to spend extra time interpreting the meaning of the question.
Review Test Questions Samples and Learn How to Spot Double Negative Sentence Structures
The Series 63 test is known for using complex sentence structures to confuse the test takers. When you are taking practice exams make sure you focus on questions with double negatives. As you know from math, two negatives make a positive. Long and complex sentences will usually use two negatives so you must read the questions carefully and look for words like NOT and FALSE.
Answer the Easy Questions First
You should review the structure of the exam before you take it. When you know the structure of the exam you can allocate the time you need for each section so you do not have to rush through the last 10 questions in a minute. There are more easy questions than complex questions on the exam. Answer the easy questions first and then use the time you have left to decipher the meaning of the more difficult questions.
Make sure you take some practice tests and time yourself before you test date approaches. When you practice and time yourself you will not get stressed by the time on the clock during your test. With the right training and adequate preparation, you will definitely increase your chances of passing the Securities 63 exam so you can become securities agent and make a sizable income.
To be licensed to sell mutual funds and variable annuities, you will need to take and pass the Series 6 and 63 exam. The first is mandatory; no matter what state you live in, you must take this test to be entitled to sell mutual funds and annuities. The series 63 exam is not mandatory in all states, but the common practice is that the company you work for will require you to do it.
In the series 6 course you will learn and be tested on stocks, investment banking, securities markets, taxes, retirement plans, debt securities, variable annuities, variable life insurance and Self-Regulatory Organizations. The exam itself is made of 100 multiple choice questions and has a passing score of 70%. You will be allowed 2 hours and 15 minutes to complete the exam. To take this exam you must be sponsored by a financial company that is a Self-Regulatory Organization or is a member of FINRA (Financial Industry Regulatory Authority).
To pass the series 63 exam, you must familiarize yourself with the Uniform Securities Act. You will also be required to be familiar with the Statements of Policy and Model Rules adopted by NASAA. You will have a total of 1 hour and 15 minutes to complete 65 questions of the Series 63 exam. It has a passing grade of 72%. Some states require you to take this exam in order for your Series 6 license to be activated.
When taking the exam, being careful not to make the simple mistakes could mean the difference between passing and having to take the exam again. Carefully read the questions. Be sure that you have understood what is being asked before going on to the multiple choices.
Practice, practice, practice. Take sample tests before you sit down for the real thing. With practice you will familiarize on the way the questions are structured. You will know what to look out for and how to answer the questions well.
As you study, make sure you pay the definitions close attention. Also, familiarize yourself with words that are new to you. And as you take the exam, remember not to pick an answer you have never heard of. The wording of the questions and the multiple choices can be tricky but with enough study, this should not be a problem for you.
Be wary of time. Some people are unable to finish their exam because they take too long to answer one question and leave little time to complete the rest. Time yourself as you do your practice tests.
To be entitled to sell mutual funds and variable annuities, you will be required to take the Series 6 and 63 exam. You can pass the exams the first time if you study well and practice as much as you can before the actual exam day. When you are sitting for the exam, go through the questions carefully and be mindful of how much time you have.