What is Series 6?
The Series 6 is a securities license that allows the bearer to register as a firm representative and offer certain kinds of insurance, variable securities, and mutual funds. Holders of a Series 6 license may not sell options, direct participation plans, or corporate or municipal securities.
A Series 6 allows a financial advisor to buy and sell certain mutual funds, unit investment trusts (UITs), variable life insurance, municipal fund securities, and variable annuities.
Understanding Series 6
Professionals in the financial services sector want to get the Series 6 license. Financial counselors, retirement plan experts, investment advisors, and private bankers are among the professions that use the Series 6 license. Candidates must pass the Investment Company/Variable Contract Products Limited Representative (Series 6) test to qualify for the Series 6 license. The Series 6 test requires passing the Securities Industry Essentials (SIE) exam. Firm sponsorship is not necessary for the SIE.
The Financial Industry Regulatory Authority (FINRA) administers the Series 6 test. It addresses subjects including stocks, variable annuities, mutual funds, tax laws, retirement plans, and insurance goods. To get a passing mark, one must adequately answer 35 out of 50 questions in 90 minutes. There are 55 questions overall, five of which are unscored. The computer-based exam costs forty dollars and cannot be taken using reference materials.
The Series 6 exam was formerly administered to candidates in person at Prometric testing facilities. But in 2020, FINRA started providing exams online, including the Series 6 exam. Prometric likewise administered the online exams. On the other hand, applicants or their employers had to install cameras and specific computer software.
However, remember that unless there are exceptional circumstances, such as a military deployment, a Series 6 expires two years after employment.
What Are Your Possibilities With Series 6?
One may serve as a registered representative and sell unit investment trusts (UITs), variable annuities, and mutual funds with a FINRA Series 6 license. These investment products are straightforward, making them ideal for individual investors trying to diversify their holdings or put money down for future financial objectives like retirement.
Selling other securities, such as stocks, bonds, and options, is prohibited for anybody possessing a Series 6 license. A separate securities license, such as the FINRA Series 7 license, would be required if someone wanted to sell these kinds of securities.
A Series 6 license holder may be in charge of processing transactions, keeping accurate records of their operations, and advising customers on investments, but only about the securities that fall within the purview of this license. In addition to working for brokerage firms, banks, insurance companies, and other financial institutions, Series 6 license holders may be expected to uphold specific legal and ethical standards throughout their employment.
Sequence 6 against Sequence 7
There is a standard comparison between the Series 6 and Series 7 exams. The Series 6 features a shorter exam that covers less content and is much less expensive. Nonetheless, some financial counselors, investment advisors, and retirement planners only need a Series 6 license. If these advisers provide insurance, annuities, and certain mutual fund products—rather than individual stocks—they may only need a Series 6 license.
However, holders of Series 6 are prohibited from selling bonds, exchange-traded funds (ETFs), or stocks. This is a significant disadvantage since ETFs are becoming the preferred investing vehicle for regular investors instead of mutual funds, often offering cheaper costs. Financial advisers and retirement planners must get a Series 7 license to offer ETFs, which entails passing a more expensive, time-consuming test.
The Series 7 license is considered more thorough and valuable than the Series 6 license, which may lead to greater career chances in the securities business. Nonetheless, some people who want to offer UITs, variable annuities, and mutual funds but don’t need to sell other kinds of securities could find that a Series 6 license is enough.
Conditions for Series 6
Candidates must have a self-regulatory organization (SRO) or FINRA member sponsor them to take the test. The Securities Industry Essentials (SIE) test is a requirement for Series 6 but not a prerequisite for the exam. The SIE corequisite was not included in the 100-question exam version administered before October 2018. The Series 6 test has fifty questions today.
To trade approved securities after obtaining a passing grade, applicants must subsequently register with FINRA via their sponsoring business. Series 6 holders are considered limited representatives of the company that sponsors them. They can market certain mutual fund types, variable annuities, and variable life insurance as a limited representative.
Sections of the Series 6 Exam
There are fifty multiple-choice questions in the test, which has a 90-minute time restriction.
- Seventy percent is the pass mark. Four distinct areas are covered in the Series 6 test, according to FINRA’s framework.
- There are 12 questions on this topic, “Seeks Business for the Broker-dealer from Customers and Potential Customers,” which makes up 24% of the test.
- Including eight questions, “Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives” makes up 16% of the test.
- With 25 questions, or 50% of the exam, the section “Provides Customers with Information About Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records” comprises half of the test.
- The five questions in the “Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes, and Confirms Transactions” section account for 10% of the test.
- Continuing Education Education To maintain their Series 6 licenses, licensees must complete continuing education requirements and get sponsorship from a FINRA-registered business.
- FINRA’s continuing education program’s two components are the regulatory and firm components. According to regulations, licensees must finish a computer-based training course within 120 days of their second registration anniversary according to FINRA. After that, FINRA further mandates a computer-based training session every three years. Broker-dealers must create and manage a continuing education program to comply with the company element.
Which exam is more complicated, Series 6 or 7?
Most agree that the FINRA Series 7 test is more complex than the Series 6 exam. A better comprehension of the financial markets and securities business is necessary for the Series 7 test, which covers various subjects.
What Is the Price of the Series 6 Exam?
The Series 6 test will cost $75 in early 2022.
How Much Time Is Allowed to a Series 6?
As long as you continue to be registered and in good standing with FINRA, your FINRA Series 6 license will be valid for employment with a FINRA member firm. Your Series 6 license will expire unless you quit the company or if your registration stays current.
A Series 6 license holder must accrue a minimum amount of continuing education (CE) credits to renew every two years. The exact regulations of the state where the license is held determine how many CE credits are needed for renewal. Generally speaking, continuing education is necessary to guarantee that registered representatives maintain their knowledge and abilities and remain current on the most recent advancements in the securities sector. Earning CE credits may also assist people in keeping up with regulatory requirements and maintaining their professional licenses.
The Final Word
A securities license such as the FINRA Series 6 enables a person to offer mutual funds, variable annuities, and unit investment trusts (UITs) and function as a registered representative. The Financial Industry Regulatory Authority (FINRA) administers the Series 6 test, which candidates must pass to get a Series 6 license. Topics like investing hazards, regulatory bodies, and securities kinds are covered in the Series 6 test. Those who want to offer these kinds of financial goods and are just beginning their careers in the securities sector usually enroll in them.
Conclusion
- The Series 6 is a securities license that allows the bearer to register as an agent of a corporation and offer insurance, variable annuities, and certain mutual fund products.
- A candidate seeking a Series 6 license must pass the test, which requires passing the Securities Industry Essentials (SIE) exam as a prerequisite.
- Candidates must have a self-regulatory organization (SRO) or FINRA member sponsor them to take the test.
- Before 2020, Series 6 tests were only available in person at test locations; then FINRA started giving them online.
- Their biggest drawback is that holders of a Series 6 license cannot offer exchange-traded funds (ETFs).
