A Series 6 license allows a person to sell certain investment products, including mutual funds, annuities, and variable life insurance.
Series 6 is not a license to sell stock or other corporate securities. However, many types of financial advisors require a Series 6 license to offer products directly to their clients, rather than referring them to another professional.
A wide range of roles in the financial industry require a Series 6 license. As in medicine or education, this license attests to a person’s knowledge and training.
The requirements for obtaining a license focus on knowledge of the “retail” investment products that are sold to individuals. These include, but are not limited to:
If you plan to work in the office of a local financial planner, helping families plan for education and retirement, you’ll likely need a Series 6 license if you want to offer products directly to customers.
The exam for a Series 6 license is officially known as the Investment Company and Variable Contract Products Representative Qualifying Exam. It is administered by FINRA, the Financial Sector Regulatory Authority.
Candidates for a Series 6 license must first pass the Securities Industry Essentials exam, an introductory exam open to anyone 18 years of age or older. However, you cannot register directly for Series 6, even if you pass this first test. Instead, you must be recommended and registered by a FINRA member firm.
FINRA is not a government-run entity, but a private company that operates as a self-regulatory body. Think of it as how the financial industry polices itself, rather than dealing with strict or complex oversight requirements set by bureaucrats in Washington. So the only way FINRA will allow you to pass certain tests, like the Series 6 exam, is if you are “sponsored” by one of its member firms that understands this self-regulatory structure and adheres to its rules.
The Series 6 exam consists of 50 multiple-choice questions and takes approximately 90 minutes. A passing grade is 70%, which means at least 35 correct answers.
- Business research for the broker-dealer with customers and potential customers (12 questions).
- Opens accounts after obtaining and assessing clients’ financial profile and investment objectives (8 questions).
- Provides clients with investment information, makes recommendations, transfers assets and maintains proper records (25 questions).
- Obtains and verifies purchase and sale instructions from customers; processes, completes and confirms transactions (5 questions).