In the world of finance, obtaining the right certifications is key to building a successful career. Whether you're aiming to become a registered representative, stockbroker, investment banker, or financial advisor, having the appropriate FINRA license can significantly elevate your credibility, salary, and career prospects.
This guide will walk you through the essential FINRA licenses, what they mean, how to obtain them, and how they can help you climb the financial services ladder.
What is a FINRA License?
A FINRA (Financial Industry Regulatory Authority) license is a certification required to operate in various financial sectors, especially in the securities industry. FINRA is a self-regulatory organization that manages the testing, qualification, and oversight of licensed professionals in the securities market. Without a FINRA license, individuals cannot legally sell securities or offer certain types of investment advice in the U.S.
There are a wide variety of FINRA licenses, each catering to different financial roles. Some common licenses include the Series 6, Series 7, Series 65, and Series 79, all of which allow professionals to specialize in different aspects of the finance world. Each FINRA license is specific to the type of securities or investment products that an individual can sell or advise on, and obtaining one of these certifications is a gateway to numerous opportunities in the finance sector.
Key FINRA Licenses Explained
Series 7 - General Securities Representative License
The Series 7 license is perhaps the most widely recognized and sought after. It allows professionals to sell a broad range of securities, including stocks, bonds, mutual funds, and options. Commonly referred to as the "stockbroker license," this certification is essential for those looking to engage in full-service brokerage services.
Exam length: 3 hours and 45 minutes, consisting of 125 questions.
Passing score: 72%.
Career roles: Stockbroker, investment advisor, financial planner.
Series 6 - Investment Company and Variable Contracts Products Representative
The Series 6 license is ideal for those who want to focus on selling mutual funds, variable annuities, and other packaged investment products. It is more limited in scope than Series 7 but is often sufficient for retirement planners and financial advisors.
Exam length: 2 hours and 15 minutes, with 50 questions.
Passing score: 70%.
Career roles: Financial advisor, retirement planner, insurance agent.
Series 65 - Uniform Investment Advisor Law Exam
The Series 65 license is designed for those who provide financial advice on a fee-only basis, typically as investment advisors who do not earn commissions on the sale of securities. It covers a broad array of financial topics, including fiduciary responsibilities and ethics.
Exam length: 3 hours, 130 questions.
Passing score: 72%.
Career roles: Investment advisor, financial planner.
Series 63 - Uniform Securities Agent State Law Exam
This license is mandatory for all professionals who hold a Series 6 or Series 7 license and wish to operate in multiple states. The Series 63 exam tests knowledge of state laws and regulations.
Exam length: 1 hour and 15 minutes, 60 questions.
Passing score: 72%.
Series 79 - Investment Banking Representative
For those pursuing a career in investment banking, the Series 79 license is a must-have. It allows professionals to advise on mergers, acquisitions, private placements, and debt and equity offerings.
Exam length: 2 hours and 30 minutes, 75 questions.
Passing score: 73%.
Career roles: Investment banker, financial advisor.
Series 57 - Securities Trader Representative
For entry-level securities traders, the Series 57 license is essential. It permits individuals to execute trades on behalf of clients in a variety of securities, including stocks, bonds, and equity derivatives.
Exam length: 2 hours and 30 minutes, 50 questions.
Passing score: 70%.
How to Obtain a FINRA License
The process of obtaining a FINRA license typically involves several steps:
Securities Industry Essentials (SIE) Exam: Before taking most FINRA exams, candidates must pass the SIE exam, which covers foundational concepts such as securities products, market structure, and basic regulatory principles. The SIE exam is available to anyone over the age of 18 and is often taken by individuals before they enter the securities industry.
Find a Sponsoring Firm: For many FINRA licenses (such as Series 7 or Series 6), candidates must be sponsored by a FINRA-member firm or a self-regulatory organization (SRO). This firm acts as a backer for the candidate as they prepare for the exam.
Register and Schedule the Exam: Once you have a sponsoring firm, you can register for the relevant exam through FINRA's Central Registration Depository (CRD). After registration, schedule the exam at an approved testing center.
Prepare and Study: Study for the exam with a structured plan, dedicating at least 80 to 100 hours depending on the complexity of the exam. There are numerous resources, including FINRA study guides and practice tests, available online to help candidates prepare.
Take the Exam: On the day of the exam, candidates must complete the test at a FINRA-approved testing center. Upon passing, candidates can begin their career as a licensed financial professional.
Benefits of Having a FINRA License
Obtaining a FINRA license is a major step toward career advancement in the financial services sector. Some of the key benefits include:
Higher Earning Potential: Licensed professionals often command higher salaries. For example, in 2021, the median salary for securities sales agents was $62,910, with financial advisors earning a median salary of $94,170. Licensed professionals are typically more competitive in salary negotiations.
Career Flexibility: With a FINRA license, professionals can diversify their career paths, moving into different roles such as stockbroker, investment banker, or financial planner. Many licenses are interchangeable across various financial services.
Credibility and Trust: Holding a FINRA license signals to clients and employers that you meet regulatory standards and are equipped with the knowledge and skills to operate effectively in the securities market. This builds credibility and fosters trust in your abilities.
The Future of Careers with FINRA Licenses
The demand for licensed professionals in the financial sector continues to grow, with the U.S. Bureau of Labor Statistics projecting a 10% growth in the securities industry through 2031. Additionally, the rise of alternative investments (such as private equity, digital assets, and real estate) is opening up new avenues for licensed professionals to explore.
Financial professionals with FINRA licenses are well-positioned to take advantage of emerging trends in the financial markets, including the shift toward more sustainable investing and the growing interest in financial technology (FinTech). As the industry evolves, FINRA-licensed individuals will be at the forefront of navigating complex regulations and providing clients with cutting-edge financial solutions.
Conclusion
Whether you're just starting out or looking to advance your career, obtaining a FINRA license is an essential step in the financial services industry. Not only does it provide the legal authority to sell securities and offer investment advice, but it also sets you apart as a trusted and knowledgeable professional.
From the Series 7 license that allows you to engage in a broad range of securities transactions to specialized certifications like Series 79 for investment banking, there’s a FINRA license to suit every career path in finance. By understanding the different FINRA licenses and the steps to obtain them, you can make informed decisions that propel your career to new heights.
For more information on how to get started with FINRA licensing or how to advance your financial career, visit FINRA’s official website or consult with industry experts to find the best path forward.
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