Why series 7

So, you've decided to sell investments. Whether you want to be a registered representative RR or an investment advisor , the first step in either process is obtaining the proper securities license. The license needed is determined by several factors, such as the type of investments to be sold, method of compensation, and the scope of services that will be provided. In this article, we'll examine the different types of licensing and show you how to determine which license is right for you.

This self-regulatory organization administers many of the exams that must be passed to become a licensed financial professional. It also performs all relevant disciplinary and record-keeping functions. FINRA offers several different types of licenses needed by both representatives and supervisors. Each license corresponds to a specific type of business or investment.

While there are several licenses geared toward specific types of securities, there are three general licenses that the majority of representatives and advisors usually obtain:. The Financial Industry Regulatory Authority FINRA supervises all securities licensing procedures and requirements and also administers many of the exams necessary to obtain the licenses. The Series 6 license is known as the limited-investment securities license. It allows its holders to sell "packaged" investment products such as mutual funds, variable annuities , and unit investment trusts UITs.

The Series 6 exam is minutes long and covers basic information regarding packaged investments, securities regulations, and ethics. This license is also required for insurance agents that sell variable products of any kind because securities constitute the underlying investments within those products.

Principals who supervise representatives holding a Series 6 license must obtain the Series 26 license in addition to having already obtained the Series 6. The Series 7 license is known as the general securities representative GS license. It authorizes licensees to sell virtually any type of individual security. This includes common and preferred stocks ; call and put options ; bonds and other individual fixed income investments ; as well as all forms of packaged products except for those that also require a life insurance license to sell.

The only major types of securities or investments that Series 7 licensees are not authorized to sell are commodities futures , real estate , and life insurance.

The Series 7 exam is by far the longest and most difficult of all the securities exams. It lasts for minutes and covers all aspects of stock and bond quotes and trading; put and call options ; spreads and straddles ; ethics; margin , and other account holder requirements; and other pertinent regulations. Those who carry this license are officially listed as "registered representatives" by FINRA, but they are generally referred to as stockbrokers.

Many insurance agents and other types of financial planners and advisors also carry the Series 7 license to facilitate certain types of transactions inherent in their businesses.

Principals of general representatives must also obtain the Series 24 license. The Series 3 license authorizes representatives to sell commodity futures contracts , which are generally considered the riskiest publicly traded investments available. Representatives that carry the Series 3 license tend to specialize in commodities and often do little or no other business of any type. The Series 3 exam is approximately minutes long and covers all forms of commodities transactions, options , hedging , margin requirements, and other regulations.

An offshoot of this license is the Series 31 license, which allows representatives to sell managed futures pooled groups of commodities futures similar to mutual funds.

The Series 63 license, known as the Uniform Securities Agent license, is required by each state and authorizes licensees to transact business within the state.

All Series 6 and Series 7 licensees must carry this license as well. The provisions of the Uniform Securities Act are tested on the minute exam. While this test is much shorter and covers less material than the FINRA exams, it is known for asking "trick" questions that force the candidate to definitively know the difference between which transactions and situations are permitted and which are required by the rules. The Series 65 license is required by anyone intending to provide any kind of financial advice or service on a non-commission basis.

Financial planners and advisors that provide investment advice for an hourly fee fall into this category, as do stockbrokers or other registered representatives that deal with managed-money accounts. The exam for this license is a minute exam that covers the rules and regulations pertaining to registered investment advisors, as well as various investment vehicles and disciplines, economics, ethics, and analysis.

Schedule an appointment for the licensing exam with Prometric Testing Centers at www. You are able to schedule two or more different exams on the same day. However, you must make a separate appointment for each of the exams. Also, plan for homework questions each night and two to three days of review before taking your licensing exam. Take your test within five days of completing the class, and go into the exam with confidence!

Get Started We've outlined the steps you need to take to earn the Series 7 license. Begin Preparing for the Series 7 Exam. Premium Package Live and Online Options. View Package Details. Essential Package Self-Study Option. As regulators change the rules ever more swiftly, the study material you use needs to be less than a year old. Keep an eye out for crowd-funding questions and topics around making suitable investment recommendations.

They want to see that you know how particular clients would want to construct a portfolio and what types of products would be appropriate for them. Confidence is key and the bigger your margin for error, the better. Photo by Joshua Earle on Unsplash. Contact: sbutcher efinancialcareers.

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