What You Should Know About Series 63 August 15th, 2014
Posted on August 15th, 2014 as General information
Many may want to know more about the Series 63 exam, since it is required by all but a handful of states to be taken by those seeking positions as professionals in the financial investment industry. Unless those seeking licensing for the sale of investment products live in Florida, New Jersey, Colorado, Maine, Louisiana, Ohio, Maryland, Vermont, Puerto Rico or the District of Columbia, a passing score of the Series 63 test is required before a license is approved.
Passing and obtaining a Series 63 license demonstrates that the candidate receiving it has basic knowledge and understanding of the laws and regulations of the state in which they take the Series 63 exam as outlined under the Uniform Securities Act. It should be noted that many of the top brokerage firms also require the passing of the Series 66 test and financial advisors are expected to pass the Series 7 exam in addition to the Series 63.
Series 63 Organizations
Series 63, as well as other Series exams, have been prepared by the NASAA (North American Securities Administrators Association) and are all administered by the FINRA (Financial Industry Regulatory Authority), which was previously known as the NASD, or National Association of Securities Dealers. The purpose of the Series 63 test, as well as other similar exams, is to provide harmonization and standardization of security regulations and laws between all participating states across the nation, as outlined under the 1956 Uniform Securities Act legislation.
The North American Securities Administrators Association has been the driving force for standardizing securities laws and regulations with its statewide efforts beginning at the organization’s formation in 1916. From its start in Kansas, the NASAA has since brought organization to all U.S. states and territories except for the few mentioned above. The primary aim of the NASAA is to protect the public from investment fraud by providing securities investment advisors for the financial industry that have been licensed as a result of demonstrating quality, competency and ethics. The Series 63 exam, as well as other Series products, acts as a vehicle to help determine these traits.
About the Exam
Series 63 contains 60 multiple choice questions and 5 questions which are considered experimental and are used to help sculpt future exams. Only the 60 standard questions are considered in determining the overall score which requires a 72 percent or above to pass and equates to 43 of 60 correct Series 63 exam answers. Candidates do not know which of the five questions are experimental.
The Series 63 test is scheduled within a 120-day window upon registration with the FINRA and payment of the $115 fee. It is recommended that candidates wanting to take the Series 63 test prep for it via independent study and/or by using the Series 63 study guide. If the candidate fails the exam the first or second time, they will be required to wait 30 days before retaking it. If a candidate doesn’t obtain a passing grade by the third try or beyond, they will be required to wait at least 180 days before trying to get their Series 63 license again.
Series 63 Study Tips August 12th, 2014
Posted on August 12th, 2014 as General information
In most states, it is a requirement for those seeking licensing in the financial securities industry to first pass the Series 63. Developed by the North American Securities Administrators Association, a Series 63 license reveals to securities brokerage firms and agencies that the holder has at least a minimum knowledge of the regulations and legalities of security sales in the state of issue, as well as an understanding of ethical obligations and practices governing financial investments.
Since a Series 63 license is required in order to sell securities in most states, it is extremely important that the Series 63 test is passed. Although the Series 63 exam can be retaken, a 30-day waiting period is required after failing the first or second time and 180 days must transpire before the exam can be retaken after failing the third, or subsequent, time. It is therefore worthwhile to prepare for the Series 63 prior to taking it.
Following are a few Series 63 study tips to help you effectively prepare for the Series 63 exam.
Series 63 Study Guide
In order to get a format and content overview of the Series 63 test, download the Series 63 study guide from the NASAA website here. The various subjects are covered in the study guide including financial obligations, ethical practices and the acts and regulations pertaining to securities of the state in which the test is being taken.
Uniform Securities Act
Candidates planning on taking the Series 63 exam should also be familiar with the Uniform Securities Act, whose laws and regulations are used by participating states to govern interstate trading, customer account management and solicitation. Series 63 test prep knowledge can be broadened by also being familiar with business practice legalities, industry terminology and standards for record keeping.
It is also recommended by the NASAA that test candidates review the organization’s statements of policy and model rules before taking the exam.
Use Flash Cards
Flash cards are a great way to retain knowledge because they operate via repetition and visual assistance. Series 63 test prep flash cards can either be found on several online websites, or they can be made by the candidate. Flash cards consist of a question printed on one side and the correct answer printed on the opposite side.
Take the Practice Exam
A practice exam is available to further help candidates with their Series 63 test prep efforts. The questions on the practice exam are similar to what will be on the actual test and they will help the candidate gauge their strengths and weaknesses as well as make necessary adjustments during the preparation stage. Areas of weakness can be strengthened by applying more study time to those subjects. The practice exam can be retaken in order to determine if weak areas have, indeed, been strengthened.
When to Study
It is recommended to do the bulk of studying in the weeks just prior to taking the exam so that the information is fresh on the mind. Candidates that register for a Series 63 license are given 120 days by the Financial Industry Regulatory Authority (FINRA) to schedule their exam. Candidates can either prepare and then register and schedule their test right away, or register and study before scheduling an exam date.
How to Pass the Series 63 Exam August 11th, 2014
Posted on August 11th, 2014 as General information
The passing of Series 63 is required by most states before a financial securities brokerage license will be issued. Although the Series 63 test can be retaken if failed, there are waiting periods of 30 days to retake the second or third test and 180 days for exams retaken after the third failure. Brokerage firms are also beginning to place more emphasis on hiring agents that have passed the Series 63 exam on the first try since repeated failures often equate to poor service or even criminal activity.
It is recommended for securities sales candidates wanting to take the Series 63 test to utilize the available Series 63 study guide for preparation. Candidates should also be familiar with the Model Rules and Statement of Policy of the North American Securities Administrators Association, and the Federal Uniform Securities Act.
Following are some of the main points concerning securities registration that are addressed on the Series 63 and that are also covered in the Series 63 study guide.
Registration of Securities
The Series 63 license candidate should first know the securities that are exempt from the requirements of registration according to the Securities Act of 1933. Exempt securities include those issued by the government and other exempt issuers as well as short-term debt instruments, which have a maturity of less than 270 days.
Securities that are non-exempt must be registered with both the state in which they are sold, as well as with the Federal Securities Exchange Commission (SEC). Series 63 license candidates should also know the differences between the three forms of registration: filing and notification, coordination, and qualification.
IPO and New Securities Registration
Another Series 63 test prep point should focus on IPO registration as well as new security registration by corporations. First time stock sales by a company to the public require registration with the SEC. These IPOs (initial public offerings) must also be registered with their appropriate state securities administrator.
New securities offered by corporations must also be registered in the states where they are offered. Such securities are offered by corporations in order to produce new funding for operations and specific guidelines must be met when registering which should be known by Series 63 candidates.
Non-Established Issuers and Federally Covered Exemptions
A basic knowledge of non-established Issuers and Federally covered exemptions should also be part of a candidate’s Series 63 test prep routine. Securities that are issued but are not in compliance with registration requirements, or are not initial public offerings (IPOs), must be registered via a process called qualification which is a complex procedure.
Those obtaining a Series 63 license should also know that any issuer that is registered on the NASDAQ or U.S. stock exchange have their securities exempt, regardless of their type as mandated under the National Securities Market Improvement Act of 1996.
If securities license candidates utilize the Series 63 study guide as well as familiarize themselves with the other documents listed at the beginning of this article, they will stand a much better chance of passing the Series 63 exam on the first try.
How Failed Series 63 Tests Affect Public Investors August 5th, 2014
Posted on August 5th, 2014 as General information
People wanting to invest in securities often look at stockbrokers as they do doctors. When it’s time to seek out a doctor for a checkup or after getting sick, many people simply choose a doctor and make the appointment believing that the doctor can be trusted, is highly skilled and has the best interests of their patients in mind. However, doctors are people that have different personalities and experience various problems which can radically affect their services. Brokers, too, are people and although the majority of agents hold a Series 63 license, some have received them only after numerous tries.
What Is The Series 63?
The Series 63 is an exam that is required to be taken and passed by potential financial securities agents before they can operate in that capacity. The Series 63 exam is officially known as the Uniform Securities State Law Examination and, as its name implies, it has been developed to establish more unity in the financial investment industry between states. Only a handful of states and U.S. territories do not require the Series 63 test to be taken as a condition of receiving a securities brokerage license. However, most leading brokerage firms do require a Series 63 license as well as the passing of the 66 exam.
Not only does the Series 63 exam establish unity between state laws and regulations concerning the financial securities markets, but those that hold a Series 63 license have also proven that they possess a basic knowledge of Federal and state acts, laws and regulations governing securities products and investment methods as well as requirements for the ethical treatment of clients. The goal is to create an investment atmosphere in which the public can trust by supplying brokers who have achieved required licenses through Series 63 test prep and completion procedures.
Not All Brokers Are the Same
As has been mentioned, brokers consist of individual people that possess different motivations, maintain various performance levels, have varying degrees of intelligence and knowledge, and experience real life problems. This variance in performance by those holding a Series 63 license is evident, according to released Wall Street investor data, which revealed that basic Series 63 exams were failed at least once by over 51,500 brokers.
It was determined that of those that failed the Series 63 repeatedly (more than once), were also shown to have the worst records for making errors, conducting bad practices and having tainted disciplinary records. For example, brokers that were found to fail their Series 63 test more than twice had a 77 percent higher chance of being reported for a misdemeanor or felony for financial-related incidents and 55 percent increased chance for job termination over brokers that passed the Series 63 exam on the first try.
Choose Brokers Wisely
Regulators of securities were notified of the alarming data and have responded by saying they would consider providing investors with more broker information. It is therefore wise for those applying for a brokerage license to insure they prepare adequately and utilize the Series 63 study guide. It is also prudent for public investors to inquire about test results of those brokers with whom they deal.
What It Takes to be a Stockbroker: Series 7 Requirements August 2nd, 2014
Posted on August 2nd, 2014 as General information
The position of stockbroker can be both exciting and lucrative. The financial world is one of constant fluctuation so it provides a constantly new and shifting landscape that requires a good amount of expertise as well as a degree of instinct to successfully navigate its ever-changing waters. If you are both knowledgeable and have a knack for projecting the ebbs and flows of financial fluctuations, then you can make a productive career as a stockbroker.
What about Education?
Many people drop their dreams of becoming a stockbroker because they assume that they require an education in finance. However, that is simply not the case. Higher education is oftentimes advertised and sold as ‘necessary’ because universities, too, are businesses seeking those to buy their product: education. All that is essentially required for becoming a licensed stockbroker is to take and pass the Series 7 exam and 66 exam (or 63 exam depending on the state).
Of course, obtaining a degree in finance can definitely assist with becoming a successful stockbroker due to the added knowledge gleaned from university courses. However, a Series 7 prep course will deliver what is necessary to start a stockbroker career as will a completed Series 7 online course. The other added advantage to having a degree is that you have a better chance of obtaining a broker-dealer sponsor which is one of the Series 7 requirements.
There are two licenses that must be obtained before you are registered to sell stocks, bonds, mutual funds, and other investment vehicles, the Series 7 Securities License and the Series 66 license (or Series 63 license depending on the requirements of your state). The only items that are not authorized for sale by stockbrokers under an NASD Series 7 are commodities futures, life insurance and real estate.
An NASD Series 7 license is obtained by passing the Series 7 exam with a 72 percent correct score out of 250 countable questions. A good knowledge is required to pass the Series 7 so candidates should vigorously study for the Series 7 before attempting to take it. Series 7 licensing and registration is provided by the Financial Industry Regulatory Authority (FINRA), while Series 66 is completed by the North American Securities Administrators Association (NASAA).
Series 7 Exam Details
As mentioned, the Series 7 tests consist of 250 questions (plus 10 non-countable ‘pre-test’ questions) and a passing score of 72 percent is required. Candidates are provided six hours to complete the exam (three hours of testing with a one hour break followed by the remaining three hours of testing).
Besides the above, Series 7 requirements include obtaining a sponsor, registering and scheduling an exam date online with FINRA, paying the $295 exam fee, taking and passing the exam, and finishing the registration process through your FINRA online account.
What Are You Waiting For?
Becoming a stockbroker is within your grasp. With some determination, a good deal of Series 7 prep and a passing grade on your exam, you can enter the exciting world of financial securities stock brokering and create an amazing career for yourself.
Stockbroker Educational Requirements July 30th, 2014
Posted on July 30th, 2014 as General information
A securities agent, better known as a stockbroker, is someone that assists individuals, companies and governmental agencies with decisions related to making investments and investment management. A stockbroker holding a NASD Series 7 license can give advice and make transactions on all financial products with the exception of life insurance, commodity futures and real estate.
The career of a securities agent can be both exciting and lucrative. Ever-changing financial markets have to be closely watched and advice given based on what they will do and how they will best improve the portfolios of various clients. If you find becoming a stockbroker of interest, you may want to know what the educational needs are to meet Series 7 requirements.
Many brokerage firms require their candidates to possess a bachelor’s degree in finance, economics, accounting, or business at the very least. This type of background coupled with NASD Series 7 knowledge required to take the Series 7 exam should not only make the candidate more efficient at securities product sales, but it should also help them to pass the Series 7 which can be extremely grueling.
If you are seeking an advanced position in securities management or analyzation with a broker-dealer, you may be required to have a master’s degree. Having an MBA (Master in Business Administration) plus Series 7 licensing will usually qualify you for a higher starting salary and faster advancement as well as an initial hiring bonus.
No Higher Education
If you do not have any higher education, your dreams of becoming a securities agent are not dashed, although it might make the process much more difficult. The main obstacle to not having a university degree is that the Financial Industry Regulatory Authority (FINRA) requires that stockbroker candidates first be sponsored before registering for and taking the Series 7 tests. It can be difficult acquiring a sponsor without any experience or credentials.
Also, the exam for the Series 7 NASD can be extremely difficult without any background knowledge of financial products and related subjects. The Series 7 exam takes six hours to complete its 250 countable questions and additional 10 non-countable ‘experimental’ questions. The national average score on Series 7 tests is 67 percent, yet a passing score is 72 percent.
Training and Study
A Series 7 Securities License can still be obtained without a having a university degree, it simply takes more commitment, drive and adequate Series 7 exam preparation. If you find a broker-dealer to sponsor you, they may also provide an in-house Series 7 prep course and Series 7 study guides to assist you.
If you do not receive Series 7 exam prep help from your sponsor then you will need to apply additional effort in order to pass. You should sign up for a Series 7 online course or offline class and obtain a new or used copy of a Series 7 study guide.
With a good deal of effort and focus, you can fulfill your desire of becoming a stockbroker without having to spend the money or time for a university degree.
Steps for Series 7 Securities License Registration July 27th, 2014
Posted on July 27th, 2014 as General information
In order to provide more consistency and higher quality in the performance of those working in the financial securities industry, the Financial Industry Regulatory Authority requires that those involved in the selling of all types of corporate securities, except for futures and commodities, first receive an NASD Series 7 license.
To qualify for the Series 7 exam, candidates are required to first obtain sponsorship via a broker-dealer. Once a sponsor has been obtained, the testing and registration process begins. Following are the required steps that candidates will need to initiate in order to obtain testing and registration for Series 7 licensing.
Step 1 – Fill Out and Submit U4 Form
Request a U4 Current Uniform Registration Form from your sponsor and complete it. The U4 consists of filling out information on employment, education and residency covering a 10 year period. Documents and explanations of any criminal convictions and financial issues are also requested. Once completed and submitted, FINRA (Financial Industry Regulatory Authority) will enter the U4 Form data into their system of registration and provide you with a user name and password. This information must be provided in full or the application for the Series 7 NASD license will be rejected.
Step 2 – Fingerprinting and Background Check
Some states also require that the applicant’s fingerprints are submitted to FINRA and a background check performed before Series 7 tests can be scheduled and taken. The fingerprinting process usually applies of fee of between $10 and $30.
Step 3 – Series 7 Exam Registration
Once all required information has been submitted to FINRA, register for the Series 7 exam and receive a testing date. The cost of the exam is $295, consists of 250 questions plus 10 non-applicable ‘pre-test’ questions, and must be completed within six hours.
Step 4 – Study
Series 7 tests can be quite difficult and, therefore, it is advisable to engage in Series 7 exam prep techniques. You can sign up for a Series 7 prep course, Series 7 online course, or purchase a Series 7 study guide as well as utilize other means of exam preparation. A passing grade of 72 percent or more is required to acquire a license and the national average for the exam is 67 percent. If you fail the exam, there is a 30-day waiting period before the next test can be taken as well as an additional $200 registration fee per attempt.
Step 5 – Series 63 Registration
Those acquiring licenses for the NASD Series 7 are also required to register for the 63 exam, which is also known as the Uniform Securities Agent State Law Examination. This exam contains 60 questions (plus 5 ‘pre-test’ questions) and also requires a passing mark of 72 percent or higher.
Step 6 – Complete FINRA Registration
Once all the above steps have been completed and you have passed the exam for the NASD series 7 license, access your FINRA account and complete the registration process. This process includes selecting the state or states in which you desire to practice securities sales. Each state selected may require its own application fee ranging from $25 to $285.
Series 7 Requirements for Becoming a Stockbroker July 25th, 2014
Posted on July 25th, 2014 as General information
Those wanting to process individual, corporate or government securities transactions covering stock options, corporate and municipal bonds, mutual funds, annuities and more will need to obtain a Series 7 Securities License by taking and passing a Series 7 exam. Both the exam and registration for a NASD Series 7 license are administered by the Financial Industry Regulatory Authority, or FINRA.
The following information outlines the Series 7 requirements for taking the Series 7 tests as well as obtaining General Securities Representative Series 7 NASD licenses.
FINRA Member Sponsorship
Before a candidate can register for or take the Series 7 exam, they must first obtain sponsorship from a financial firm or company that is an active member of FINRA. This presents candidates with a Catch-22 situation due to the fact that most companies will not hire those without broker experience, yet that experience cannot be gained until candidates take the Series 7 tests and acquire Series 7 licensing. Therefore, it can take quite a bit of persistence before candidates find willing sponsors.
One method for hastening this process is to first obtain a license via passing a Series 6 test which is less demanding. This can provide the opportunity of getting your ‘foot in the door’ where you can prove yourself. Once you show your commitment and skill at selling annuities and mutual funds, you can request support with Series 7 prep and taking of the exam.
Series 7 Preparation and Study
When a candidate acquires a sponsor, the next step is to begin studying for the exam which can be quite difficult. In order to successfully complete and pass the exam, a good deal of Series 7 prep is required. The test largely contains questioning on investment risk, retirement plans and options, taxation, prepackaged securities and equity and debt instruments. It can help significantly to sign up for a Series 7 prep course, as well as obtain a Series 7 study guide.
Exam Registration and Completion
When you have a few weeks of study under your belt, obtain a U-4 Form from your employer, fill it out and submit it to FINRA. The U-4 requires information on residence and employment for the past 10 years as well as detailed information on any criminal activity and financial troubles. The U-4 is submitted electronically to FINRA along with a copy of the candidate’s fingerprints in order to conduct a background check. FINRA will then provide the candidate’s employer with a testing date and user name and password so the candidate can access their account. If the applicant passes their Series 7 exam, they will access their FINRA account and complete the registration process.
Taking the Exam
The NASD Series 7 exam contains a total of 260 questions, 10 of which are considered ‘experimental’ and do not count towards a passing grade. At least 72 percent of the questions are required to be answered correctly to pass the Series 7. The average candidate score is 67 percent, therefore the importance of Series 7 exam preparation. Candidates receive six hours in which to complete the test.
How Much a Stockbroker Can Expect to Make July 24th, 2014
Posted on July 24th, 2014 as General information
Many people are considering entering the financial industry as stockbrokers due to the ever-present atmosphere of excitement and the draw of making a nice income. However, those seeking to enter the financial securities industry want to know how much money they can expect to make before they commit to taking the required Series 7 exam and obtaining a subsequent NASD Series 7 license.
Bureau of Labor Statistics Data
First of all, hard data can be found under the Bureau of Labor Statistics, or BLS. The BLS is the organization that is authorized to gather information and issue reports on all wage and salary data accrued by all professionals within the United States.
According the BLS, the average median annual wage of those classified as stockbrokers who had taken and passed Series 7 tests was $70,190 in 2010. By analyzing 2010 stockbroker wage data, you will find that $31,330 was the figure of the lower 10 percent of stockbrokers while $166,400 or more was earned in the same year by upper 10 percent.
Variables of Stockbroker Earnings
What you might actually earn as a stockbroker with Series 7 licensing is dependent on several variables. Factors such as experience, qualifications, performance and geography will all influence how much money you actually make in the financial securities industry.
Your overall experience in the financial markets is one aspect that will influence your income as a stockbroker. Series 7 courses will provide a great deal of information that is necessary to pass the Series 7. Therefore, it is extremely important to obtain Series 7 study guides and take classes in order to make up for a lack of experience through acquired securities knowledge.
Although holding a Series 7 Securities License is sufficient enough to obtain a position with a broker-dealer, you will want to acquire other qualifications to achieve better pay. Besides gaining Series 7 licensing and the required Series 66 license, you can also pursue greater industry knowledge by taking other exams offered through NASAA and FINRA. The more qualifications you obtain, the greater are your chances for receiving higher pay. Many of those receiving only Series 7 training are required to start at lower positions until they gain more experience.
Even if you only apply Series 7 prep techniques to acquire a license, if your performance upon arrival at your broker-dealer sponsor is extraordinary, you could receive greater pay more rapidly. Although salaries are sometimes paid to stockbrokers starting out with only a Series 7 Securities License, much of the income garnered comes from commissions based on quantities sold.
Another factor that can significantly influence the amount a stockbroker makes with their NASD Series 7 license is where they are located. Those operating in Kentucky, for example, made only $59,060 on average in 2010 while stockbrokers utilizing their Series 7 NASD in New York captured an average of $135,700 annually.
As you can see, if you utilize good Series 7 preparation techniques and acquire as much knowledge as possible, take other securities courses, apply your abilities and seek out profitable areas, you can make a good income as a stockbroker without much education.
How Bad Credit Can Affect an NASD Series 7 License July 21st, 2014
Posted on July 21st, 2014 as General information
Bad credit has a broad reach in today’s society due to easy credit, low job availability and various other factors. Anyone wishing to obtain a Series 7 Securities License and become a broker could be affected if they have bad credit.
In order to take the Series 7 exam and obtain a General Securities License, FINRA (Financial Industry Regulatory Authority) requires that a candidate first obtain a member sponsor and then fill out a U-4 Uniform Application for Broker-Dealer Registration form. Both of these steps could present obstacles to potential stockbrokers. The first hurdle is finding a financial firm that will sponsor someone with a bad credit history, and the second hurdle lies in the financial information submitted to and subsequent credit check by FINRA.
Why Bad Credit Hurts
There are several reasons that bad credit can hurt your chances of taking Series 7 tests and receiving your NASD Series 7 license. Because you are applying to work in the financial industry, a poor credit history is seen as a hindrance.
From the perspective of a brokerage firm, bad credit is seen as a result of poor judgment and even a flawed character. Since you will be providing advice and information on financial products on behalf of the employer, the thought is that the same poor decisions or unethical actions might be applied to valued customers. If you have experienced a bankruptcy, employers often see that as a poor reflection on them because bankruptcies are on public record and can be viewed by clients or potential clients. Financial companies may, therefore, refuse to sponsor a candidate for their NASD Series 7.
From FINRA’s perspective, a bankruptcy or poor credit history might also raise red flags about the ethical behavior of clients at a time when the public is demanding more accountability from their stockbrokers and financial advisors. It is often assumed that if a person cannot handle their own finances, then they will mismanage client money as well.
FINRA is the authorizing organization that oversees all Series 7 licensing procedures, including registering for and taking the NASD Series 7 exam to issuing the Series 7 Securities License once candidates pass the Series 7. According to Section 4 under Article III of the FINRA By-Law, bankruptcy doesn’t necessarily disqualify someone from obtaining their Series 7 NASD. However, their goal is to protect investors by providing qualified, honest and fair brokers, so decisions against issuing Series 7 exam approvals do occur.
States also have their own bankruptcy laws which can vary widely. Certain states have harsher restrictions while others are more lenient when dealing with poor credit. For example, Illinois may deny the renewal of NASD Series 7 license renewals if a financial professional has incurred a bankruptcy.
The Bottom Line
When it comes down to it, the ultimate decision is up to the authorities of whether or not to grant NASD Series 7 approval. The best approach is to first clean up your credit record before seeking Series 7 exam sponsorship and registering with FINRA for a Series 7 Securities License.