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    Series 7 vs Series 6; which one is most relevant to you?

    Trying to figure out the trajectory to being an expert in the securities industry?

    Your dreams are valid, let’s share in your success story.

    Ride with us to uncover appropriate exams/licenses to consider based on your area of interest in the securities industry.

     At the end of this article, you’ll learn the:

    Significance of both Exams
    Educational Requirements
    Exam Content
    Cost of Exams
    Duration of Exams

    This article will help stir you up and redirect you to the necessary steps to take in your career as a financial professional. 

    Let’s dive right in!

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      Series 6

      The Series 6 exam is also called the Investment Company and Variable Contracts Products Representative Exam is the Series 6 exam. 

      The Series 6 exam is administered by FINRA.

      The exam seeks to evaluate the competence level of individuals starting their career as investment companies and variable contracts products representatives.

      1 hour 30 minutes (90 minutes) is the time for the entire exam.

      The passing score for the exam is 70%; that is, you must answer at least 35 questions correctly out of 50 questions to pass the Series 6 exam.

      Like Series 7, the corequisite for the Series 6 is the Securities Industry Essentials.

      Topics relating to investment, ethical standards, securities regulations, etc., are covered in the Series 6 exam.

      To register for the investment company and variable contracts products designation, candidates are mandated to pass both the Securities Industry Essentials (SIE) exam and the Serie 6 exam. 

      After due registration and meeting other requirements of the state in which you want to transact business, you get the Series 6 license to carry out transactions legally. 

      Candidates with the Series 6 license can sell several securities such as variable annuities, mutual funds, etc. More details are given below.

      What is a Series 6 license? 

      The Series 6 license is also called the Investment Company and Variable Contracts Products license.

      Insurance agents that sell variable life insurance are required to be Series 6 licensed. 

      Series 6 licensees are supervised by principals who themselves must hold the Series 26 license to do so. 

      These principals also have the SIE and Series 6 license before becoming Series 26 licensees.

      Series 6 license is valid for the entire period you are employed in a firm membership with FINRA or another authorized self-regulatory organization (SRO).

      The validity of the Series 6 license ONLY becomes null under the following conditions:

      1. Your employment contract with a FINRA member firm is terminated.
      2. Within two years, you leave the firm where you work and do not find employment in a different FINRA member firm or SRO. 

      This license lets you transact business in the state where you are licensed and sell certain securities listed below.

      • Mutual funds
      • Variable life insurance
      • Variable annuities
      • Unit investment trusts (UITs)
      • Municipal fund securities 

      Series 6 license holders are, however, not authorized to sell these securities listed below:

      • Municipal bond securities
      • Direct participation programs
      • Options

      Let us get into some interesting details about what is required to take the Series 6 exam and earn the Series 6 license. 

      Requirements to take the Series 6 exam 

      Interestingly, the Series 6 exam does not require any educational qualification to be eligible to take the exam.

      It would help if you had sponsorship from a firm that is a member of FINRA or SRO to enroll and take the Series 6 exam.

      Your sponsoring firm will file a Form U4 (Uniform Application for Securities Industry Registration) on your behalf to be able to take the exam. 

      Most sponsoring firms will also pay for the exam enrollment fee for you. 

      Also, most firms have the Series 6 licensing incorporated into their training program for new hires. 

      It is a plus if you have a degree in a finance-related field before taking the Series 6 exam; this will help you understand concepts easily.

      In addition, this will help you both in short and long term as candidates with a finance-related degree find it easier to get sponsorship from firms. 

      How do I earn a Series 6 license?

      Series 6 license can be earned by taking five (5) significant lines of action. These are:

      1. Take and pass the SIE exam.
      2. Secure sponsorship from a FINRA-member firm or SRO.
      3. Register for the Series 6 exam via your sponsor.
      4. Study for and pass the Series 6 top-off exam.
      5. Meet state licensing requirements.

      After taking all the necessary actions in becoming a licensed Series 6 holder, let us talk about what work you can do, where you can work, and what services you can render with this license.

      Series 6 license | Jobs

      There are a variety of jobs you can do as a licensed Series 6 holder. We have listed seven (7) below:

      • Investment Advisor 
      • Financial Advisor 
      • Client Relationship Manager 
      • Retirement Plan Specialist 
      • Relationship Manager 
      • Bank Manager 
      • Relationship Banker 

      Series 6 license | Where I can Work

      With the Series 6 license, you can work in:

      • Investment firms
      • Brokerage firms
      • Banks 
      • Insurance companies

      Series 6 license | Services I can render

      With the Series 6 license, you can readily conduct the following transactions:

      • Investment Advice
      • Retirement-planning 

      Series 7

      Series 7 exam is administered by FINRA.

      This exam is also called the general securities representative (GS) exam.

      The Series 7 exam is a comprehensive exam that seeks to evaluate candidates’ grasp of knowledge necessary to excel as securities representatives. 

      This exam is one of the exams conducted by FINRA for financial professionals in the securities industry. 

      The FINRA Series 7 exam deals on several extensive and in-depth topics in securities products, securities regulations, emphasis on suitability, etc.

      The scope of the FINRA exam is intentionally designed to be broad so that licensed general securities representatives are equipped to perform crucial functions.

      These crucial functions by general securities representatives are outlined below:

      • Common and preferred stocks
      • Stocks
      • Bonds
      • Direct participation programs (DPPs)
      • Collateralized mortgage obligations
      • Solicitations 
      • Variable annuities
      • Investment company products 
      • Municipal securities
      • Government securities
      • Options

      Series 7 License

      The Series 7 license is essential for most financial professionals as it cuts across many financial designations. 

      Series 7 license is known officially as the general securities representative (GS) license. 

      Most financial institutions like banks and Broker-dealers readily recruit Series 7 license holders because they are confident that licensees will bring value to their firm. 

      In general, Series 7 license holders are sort after in the financial services industry. 

      As a Series 7 licensee, you are a resource person for questions relating to investment company securities, sales of corporate securities, variable annuities, municipal securities, and more.

      Series 7 licensees are usually called “registered representatives” by FINRA and are generally termed “stockbrokers.”

      The Series 7 securities license authorize holders to sell virtually any type of individual securities EXCEPT:

      • Commodities futures
      • Real estate 
      • Life insurance

      Why Many Financial Advisors Obtain Both Licenses

      You may wonder why many Financial Advisors take the Series 6 exam first before getting the Series 7 license. 

      The reason is not far-fetched; many financial advisors do so because they can sell securities with the Series 6 license, such as mutual funds, variable annuities, unit investment trusts (UITs), variable life insurance, and municipal fund securities. 

      Note that they can also sell securities with the Series 7 license; the difference is more securities such as sales of individual stocks and bonds. 

      Financial advisors (FAs) leverage the Series 6 license to get hands-on industry experience pending when they get the Series 7.

      These experiences also come in handy when they become licensed Series 7 holders and sell more securities. 

      Another reason why FAs for getting the Series 6 license first is the low cost of the exam compared to Series 7. 

      The Series 7 exam enrollment cost is more than six times (6X) that of the Series 6 exam. 

      While the Series 7 exam cost is $245, the Series 6 exam cost is $40. That is a huge financial gap. 

      How to get series 7 License

      We have outlined and expatiated the steps necessary to earn a Series 7 license below:

      1. Take the SIE Exam 

      Elementary topics are covered in the SIE exam, such as understanding the regulatory authorities, acceptable ethical practices, and knowledge of products. 

      This elementary nature of the SIE exam makes it ideal for taking the exam before taking the Series 7 exam. 

      The Series 7 exam difficulty level is higher than that of the SIE.  

      After passing the SIE exam, a four-year window will be opened for you to take and pass any Top-Off exam such as the Series 7 exam. 

      The SIE is a corequisite exam for Series 7. 

      The “corequisite” that FINRA specified means that you are required to pass both SIE and Series 7 exams to register for and process the Series 7 license.

      This means that both exams can be taken simultaneously, or anyone can be taken before the other. 

      The above implies that you can decide to take either the Series 7 exam first, pass it before taking the SIE, and vice versa. 

      There are no stringent rules in the order you can take both exams. 

      1. Secure Sponsorship for the Series 7 Exam

      Sourcing for sponsorship to enable you to take your series 7 exam is a very crucial step in ultimately getting your Series 7 license.

      To be eligible to take the Series 7 exam – representative-level qualification exams, you must be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm.

      Your sponsorship firm must file a Form U4 (Uniform Application for Securities Industry Registration or Transfer) to enable you to register for the Series 7 licensing exam.

      Series 7 has an exam fee; this is most times covered by the sponsoring firm. 

      Now, I guess you realize how crucial the sponsorship thing is and the benefits accrued to it. 

      Do well to start looking for sponsorship in good time. 

      It can be a daunting task to get sponsorship; however, having the Series 7 license and a degree in finance-related discipline increases your chances of getting it in good time.  

      1. Study for the Series 7 Exam

      Taking the Series 7 Top-Off exam is the next step after securing sponsorship for the exam. 

      While most candidates take the Series 7 exam first, it does not change that you can decide to take the SIE exam before taking the Series 7. It is based on preference. 

      Unlike the SIE exam that most candidates have confirmed that it is not challenging to attain the passing scores, the Series 7 is not a walk in the park. 

      Studying for Series 7 with determination, discipline, purpose, and planning is crucial to passing the exam. 

      Fortunately, many retail brokerage firms have organized training or, sometimes, affiliated eternal trainers that can help you through the exam preparation.

      Review course and exam preparation are essential to helping you ace the Series 7 exam at a first time try. 

      The exam has 125 questions that are in multiple-choice format, and you have 3 hours and 45 minutes to finish the exam.

      Do well to study well and be disciplined in doing so. 

      1. Pass the Series 7 Exam

      Yes, after all the hard work put into studying, the goal is to ace the Series 7 exam even as a first-time test taker. 

      It is important to stress that the Series 7 exam has 125 multiple-choice questions to be taken in 3 hours and 45 minutes (225 minutes).

      The exam has a passing score of 72%. 

      This implies that you must answer at least 90 questions correctly out of 125 total questions to pass the exam. 

      On passing the Series 7 exam and having passed the SIE exam before this time, you are a few steps away from getting licensed.

      Better days ahead, what is next? Let’s see!

      1. Register for Series 7 License

      On completing the steps above, the next step is to register for the Series 7 license. 

      After meeting all the state laws and regulations where you transact business or intend to transact business and passing background checks, you will get licensed to conduct business in such a state. 

      Career Outlook for Series 7 license

      The FINRA Series 7 license – the General Securities Representative license is relevant to a license holder, as this avails a holder the opportunity to work in any the respect below:

      • Financial Advisor
      • Financial Planner
      • Certified Financial Planner (CFP)
      • Paraplanner
      • Registered Client Service Associate
      • Registered Representative
      • Compliance Officer

      Registered Representatives (RR)

      Registered representatives (RR) are financial professionals who work for a client-facing financial firm such as a brokerage firm. 

      RRs serve as representatives for clients who are trading investment securities and products.

      Registered representatives may be employed as:

      • Financial advisors
      • Portfolio managers
      • Brokers

      Registered representatives are primarily known as “transaction-based service providers” because they buy and sell securities for clients.

      As financial professionals, RRs can deal with client transactions in the securities markets and ensure they transact business in their client’s best interest.

      For registered representatives to execute transactions, they must be licensed to sell the designated securities for clients they represent.

      Series 7 license enables registered representatives to buy and sell stocks, mutual funds, municipal securities, options, and specific variable contracts (e.g., insurance or annuity products) for their clients.

      RRs may also obtain the Series 65, or Series 66 (Uniform Securities Agent State Law Exam) licenses to expand their set of allowable activities to accommodate more functionality.

      Series 6 and Series 7 | Differences

      You will agree with me that Series 7 and Series 6 are closely linked in terms of the exam structure, corequisite, jobs description, and firms where you can work with either license. 

      The differences between Series 7 and 6 are outlined below:

      1. The significant difference between the Series 7 and Series 6 license is the scope of securities that both licenses allow you to sell. 
      2. While the Series 6 license will enable you to sell variable annuities, mutual funds, variable life insurance, municipal fund securities, and unit investment trusts (UITs), the Series 7 license allows you to sell more securities. 
      3. Little wonder why Series 6 licensees are called limited representatives because the securities they are permitted to sell are limited, unlike Series 7 licensees with only a few restrictions.
      4. Series 7 licensees can sell all types of securities EXCEPT real estate, commodities futures, and life insurance. 
      5. The cost for enrolling for the Series 6 exam is considerably low and affordable compared to that of the Series 7 exam.
      6. Series 7 exam enrollment fee stands at $245 in contrast to the Series 6 enrollment fee that is only $40. Series 7 enrollment fee is more than six times (6X) that of Series 6.
      7. The total time to take the Series 7 exam is 3 hours and 45 minutes (225 minutes); Series 6 is 1 hour and 30 minutes (90 minutes).
      8. Series 7 has a passing score of 72% (90/125), the Series 6 has a passing score of 70% (35/50); that is, 35 correct answers must be gotten out of 50 questions to pass the exam. 
      9. The total number of questions to be answered in a Series 7 exam is 125 as against 50 questions in a Series 6 exam. 

      Conclusion

      In summing up!

      Series 6 and 7 licenses are helpful for any financial professional seeking a career in the securities industry as most financial firms require either or both licenses to work with them.

      This is so because of the crucial nature of the licenses in selling other securities and taking up different job roles in the securities industry. 

      Again, state authorities mandate that most financial professionals have at least one license to transact business in varying respects in the securities industry.

      Note that both Series 6 and 7 have the SIE as a corequisite. 

      The above implies that to be licensed as either a Series 6 or 7 holder, you must have SIE+Series 6 and SIE+Series 7. 

      No matter the licensing you choose to get, remember that you can always kickstart your career as a securities representative by getting the Series 6 license. 

      The Series 6 license will enable you to sell various securities, gain industry experience and get money to finance your Series 7 or other securities agents license like Series 63.  

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      Sources

      FINRA

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      STC

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