According to Kaplan Financial, there are more than a dozen different kinds of securities licenses, each with their own specifications. For example, you need a Series 3 license to deal in commodities futures contracts, and a Series 65 license to become a stockbroker. The different career paths have different requirements and licensing bodies.
Professionals who require a financial securities license
A FINRA license is necessary for a number of jobs in the commodities, securities, and other financial industries. Anyone who sells securities typically has a FINRA-issued license. The following jobs frequently call for obtaining a securities license:
What is a financial securities license?
A license for financial securities is a designation given by the Financial Industry Regulatory Authority (FINRA), a nonprofit organization with government authorization that regulates broker-dealers and gives professionals the ability to sell securities and provide financial advice. An individual who possesses one or more securities licenses is a registered financial professional. There are various license types available, but the particular license obtained determines the services or financial products one may provide to customers.
These licenses are frequently necessary for professionals who want to work in the securities industry as a broker, investment representative, securities salesperson, or in any other capacity.
What are the benefits of pursuing a financial securities license?
While there are numerous reasons to pursue a securities license, the following are some of the main advantages:
Pay increases
Financial professionals have the chance to increase their income by becoming eligible for payroll employee positions with competitive salaries and the potential to earn lucrative commissions by obtaining a securities license. Financial professionals can volunteer for additional responsibilities and tasks, like client work, if they have a certification. Financial employees may be able to earn a base salary and additional commissions by bringing in new clients for a fee, depending on their employer.
Career advancement
While earning a finance bachelor’s degree may help you find a fulfilling job, holding a securities license helps professionals advance in their careers. With the right education, support, and securities licenses, you can sell securities and be considered for a number of jobs. This enables you to seek out new customers, expand your business, or progress within a reputable financial institution.
Client convenience
Financial planners can provide more services to their clients by selling securities after obtaining a securities license. This development gives you the chance to take care of all of your clients’ financial needs, saving them from having to contact another financial expert. This enables you to target a wider clientele who might be looking for a professional who offers a variety of services.
What type of security licenses are available?
To sell securities at a brokerage firm, work as an independent broker-dealer or as an investment adviser, you must obtain a financial securities license. The most popular kinds of licenses are listed below:
Series 7
Advanced FINRA exams can only be taken after passing the General Securities Representative exam, which is an entry-level prerequisite certification. Entry-level professionals can obtain a Series 7 license and buy or sell a variety of securities after passing this exam. These financial instruments include municipal funds, the offerings of investment companies, as well as corporate bonds and stocks. It takes about six hours to complete this test, which consists of 250 multiple-choice questions.
Series 24
A professional can obtain a Series 24 license and manage their company’s activities in relation to investment banking transactions and other securities matters by passing the General Securities Principal exam. This test has 150 multiple-choice questions and should take no more than four hours to complete.
Series 55
Professionals who want to trade equity securities over the counter or off exchange, which is when professionals trade directly between parties and without the oversight of an exchange, can benefit from taking the Equity Trader Limited Representative test, which grants a Series 55 license. Additionally, those taking part in securities and trading activities connected to the NASDAQ Stock Market must pass this exam. This three-hour test consists of 100 multiple-choice questions.
Series 63
The Series 63 license is awarded by passing the Uniform Securities Agent State Law exam, which is advantageous for financial professionals looking to work as securities brokers. The majority of states demand this kind of license for specific financial professionals. The North American Securities Administrators Association (NASAA) created this FINRA exam. This exam lasts one hour and fifteen minutes and consists of 60 multiple-choice questions.
Series 65
To become an investment adviser, money manager, or a professional who manages funds receiving no commissions, one must pass the Uniform Investment Adviser State Law test, which awards a Series 65 license. This is a FINRA test created by NASAA that is comparable to Series 63. This exam is 130 multiple-choice questions and three hours long.
How to choose the right securities license
The following are some helpful hints for selecting the right kind of license for your profession:
1. Understand FINRA and NASAA
Two organizations, FINRA and NASAA, are in charge of giving professionals’ securities license exams. NASAA defends clients who seek investment or securities advice, while FINRA handles requirements and licensing When applying for a license, it’s crucial to do your research and comprehend how both organizations relate to securities licensing.
2. Determine whether you require the SIE exam
An entry-level exam offered by FINRA, the Securities Industry Essentials exam gauges a professional’s fundamental understanding of the securities industry. Consider conducting research to determine whether you should take this exam first since it is a prerequisite for a specific license.
3. Check standard requirements
Before pursuing a particular license, professionals may pass the SIE exam, but it’s important to note that passing the SIE exam does not automatically qualify you for a FINRA exam. People might, for instance, succeed on both an SIE and a qualification test for the kind of business they want to start. These people frequently need connections with a FINRA member firm and must pass a qualification exam.
4. Research state requirements
Since many states have specific rules for participating in the financial industry, some states have additional licensing requirements for selling securities. Consider speaking with a representative at the local government office of your state to learn about the specific requirements for each state.
5. Decide what securities licenses you require
Professionals frequently need licenses in order to sell securities, and this depends on the company that is sponsoring or hiring you. Consider asking a staff member at your company which licenses are required. When beginning work at a new brokerage, professionals frequently complete training programs that could contain this knowledge.
Tips for taking a financial securities license exam
Before sitting for a securities license exam, keep the following advice in mind:
Please be aware that Indeed is not connected to any of the businesses or certifications mentioned in this article.
FINRA Securities Licenses: Your Ultimate Guide to the Most Important Licenses ♻️ FUNDS S1•E24
FAQ
What can you sell with a securities license?
A securities license allows you to market and sell investments. You might work as a registered representative or an investment advisor, depending on the license you possess.
What is the best securities license to get?
The Series 7 license, which is managed by FINRA and is also known as the general securities representative license, entitles you to sell almost any individual security, including preferred stocks, options, bonds, and other individual fixed income investments, as well as all varieties of packaged products.
What is a financial Licence?
Series 65. The Uniform Investment Adviser Law Examination, also known as the Series 65 license, is best for financial planners, advisors, and other people who give financial advice. Additionally, those who deal with managed money accounts or stockbrokers would require this license.
