Unlocking the Power of Financial Securities Licenses: Your Guide to Essential Certifications

Financial securities licenses such as Series 7 and Series 63 stand as the cornerstone for professionals aiming to excel in selling and marketing investments.

Whether your goal is to become a registered representative (RR) or an investment advisor, securing the appropriate securities license is the critical first step. The specific license required hinges on the types of investments you plan to offer, your compensation model, and the range of services you intend to provide.

Key Insights to Remember

• Obtaining a securities license is mandatory for anyone marketing or selling investment products.
• Your required license depends on the investment products, compensation structure, and service scope.
• The Series 7 license offers the broadest authorization, enabling holders to sell diverse securities.
• FINRA licenses include Series 6 and Series 7, vital for many financial professionals.
• NASAA governs licensing for Series 63, Series 65, and Series 66, crucial for state-level compliance.

Understanding FINRA Licensing

The Financial Industry Regulatory Authority (FINRA) manages securities licensing, enforcing regulations, and maintaining records. As a self-regulatory organization, FINRA administers exams that certify representatives and supervisors as licensed financial professionals.

Licenses correspond to specific investment types, with three primary licenses frequently pursued:

Series 6

This limited-investment securities license permits holders to sell packaged investment products like mutual funds, variable annuities, and unit investment trusts (UITs). The Series 6 exam lasts 90 minutes and tests knowledge on packaged investments, securities regulations, and ethics. Insurance agents selling variable investment products also require this license. Supervisors overseeing Series 6 licensees must obtain the Series 26 license.

Series 7

Known as the general securities representative license, Series 7 holders are recognized as registered representatives or stockbrokers by FINRA. Many insurance agents and financial planners hold this license to facilitate diverse transactions. Supervisors of Series 7 licensees must obtain the Series 24 license.

Series 7 licensees can sell a wide array of securities including common and preferred stocks, options, bonds, and other fixed-income products. However, they cannot sell commodities futures, real estate, or life insurance. The exam is comprehensive and challenging, covering stock and bond quotes, options strategies, ethics, margin rules, and regulations.

Series 3

The Series 3 license authorizes sales of commodity futures contracts, considered among the most volatile investments. Holders specialize in commodities trading. The exam spans approximately 150 minutes, covering commodities transactions, options, hedging strategies, margin requirements, and regulatory standards. The Series 31 license, a related credential, permits sales of managed futures.

Exam Overview

Important Note

The Securities Industry Essentials (SIE) Exam is a foundational FINRA exam for prospective securities professionals. After passing the SIE, candidates must be affiliated with a member firm to pursue specific licensing exams.

Exploring NASAA Licensing

Not all securities licenses fall under FINRA’s jurisdiction. The North American Securities Administrators Association (NASAA) oversees the Series 63, 65, and 66 licenses:

Series 63

Known as the Uniform Securities Agent license, Series 63 is required in each state where licensees conduct business. Holders of Series 6 and 7 must also obtain this license. The exam, lasting 75 minutes, covers the Uniform Securities Act provisions.

Series 65

This license is essential for individuals offering financial advice on a non-commission basis, including financial planners and advisors charging hourly fees. The 180-minute exam tests knowledge of registered investment advisor regulations, investment vehicles, economics, ethics, and analytical methods.

Series 66

The Series 66 exam merges Series 63 and 65 into a single 150-minute test. It excludes investment material and is available only to candidates who already hold a Series 7 license.

Exam Comparison

Career Outlook and Earnings Potential

Securities, commodities, and financial services sales agents serve as vital intermediaries connecting buyers and sellers. According to the U.S. Bureau of Labor Statistics, the median annual wage for these professionals was $76,900 as of October 2024, with a projected growth rate of 7% through 2033. Most candidates affiliate with licensed broker-dealers who oversee transactions and share commission income.

Personal financial advisors, who assist individuals in managing finances and planning futures, had a median salary of $99,580 in October 2024, with employment expected to grow 17% by 2033.

Licensed professionals may also work with registered investment advisors (RIAs), entities registered with the SEC or state authorities, depending on office location and assets under management.

What Are Securities Licenses?

Securities licenses are official certifications granted by state and federal agencies permitting individuals to sell securities to investors legally.

Choosing the Right Securities Licenses

Your ideal securities license depends on your role—whether as a representative, principal, municipal securities board member, futures trader, or securities administrator.

FINRA Series 7 and 63 Explained

The Series 63 license is mandatory in most states for selling securities within those jurisdictions, while the Series 7 license, issued by FINRA, authorizes sales nationwide.

Final Thoughts

Most financial firms incorporate mandatory licensing programs into their training for new advisors, dictating which licenses are necessary to sell specific products and services.

Correction—Nov. 22, 2024:This article has been updated to reflect accurate passing scores for the Series 63 and Series 65 exams.

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