Financial licenses are credentials that a person has with a Financial Authority in order to be able to provide Financial Product and/or Financial Services. A financial Product is defined as any form of product which consists of managing, buying, or investing money. Financial service is defined as any service that involves managing, buying, or investing money. Need help getting a Financial License? Click here. In order to provide Financial Products and Financial Services, you need a Financial License. Financial Authorities will only issue Financial Licenses to credible and qualified individuals. Financial Authorities also monitor and supervise Financial Licenses holders in order to prevent the Financial Market from getting into a crisis. Financial Licenses holders will receive Financial Diplomas after completing Financial Training courses. The most common way to get a Financial License is by being appointed by the government. However, there are other ways to obtain a Financial License. Some Financial Authorities allow companies to provide Financial Products and Financial Services without an individual Financial License. The company must have a certain number of employees with financial licenses, and financial products and Financial services must be offered through those employees. The application process for a Financial License can be different for each Financial Authority. The Financial Authority will require a Financial Licensee to take certain classes, pass an exam, and meet the minimum requirements set forth by Financial Authority. There are various licenses issued by different authorities. FINRA offers several different types of licenses needed by both representatives and supervisors. Each license corresponds to a specific type of business or investment. There are three general licenses that the majority of advisors and representatives obtain from FINRA. 1.Series 6 - General Securities Representative This license is also called a limited-investment securities license. This license authorizes individuals to register as a company’s representative and sell packaged securities. In order to sit for the Series 6 exam, candidates for a Series 6 license are required to have a sponsor from a FINRA-member firm or a self-regulatory organization. Someone who holds a Series 6 license is qualified for the solicitation, purchase, and/or sale of Mutual Funds, Variable Annuities, Variable Life Insurance, Unit Investment Trusts (UITs), and Municipal Fund Securities. The Series 6 exam is 135 minutes long and covers basic information on seeking business for the broker-dealer, and on opening accounts. It also covers the provision of information about investments, making suitable recommendations, transferring assets, and maintaining appropriate records. It also covers obtaining and verifying customers’ purchase and sales instructions. 2. Series 7 - General Securities Principal This license is also called the general securities sales supervisor license. This license authorizes individuals to supervise representatives in the sale of all kinds of securities and investment products. In order to sit for the Series 7 exam, candidates for a Series 7 license are required to have a sponsor from a FINRA-member firm or a self-regulatory organization. One who holds this license enables the holder to solicit, purchase and/or sell most securities products, such as stocks, mutual funds, options, municipal securities, and variable contracts. The Series 7 exam is 225 minutes long and covers more in-depth knowledge than the Series 6. It covers all the topics of Series 6, as well as information on Financial Products such as options, futures, and debt securities. 3. Series 3 - National Commodities Futures Examination The Series 3 exam is a prerequisite to gain Registration as an Associated Person with a futures commission merchant and to sell, solicit, or negotiate commodity interests. The test consists of 100 questions that must be completed in two hours. The Series 3 Exam covers knowledge of the products and basic concepts related to the commodities futures markets. It also assesses the ability to identify potential market abuses and illegal activities. Topics on the Series 3 exam include the structure of the futures markets, trading procedures, market analysis, and risk management. This is 120 multiple-choice questions in two parts. Aside from FINRA, NASAA also oversees the licensing requirements of three key licenses. Financial licenses are required by Financial Institutions for their employees who are involved in Financial transactions. Each state sets its own requirements for Financial Licensing. Most Financial Institutions will accept the license that is issued by NASAA. The Financial Industry Regulatory Authority (FINRA) also oversees Financial Licenses. FINRA is a not-for-profit organization that regulates member firms and exchange markets. When it comes to Financial Licenses, there are a variety of different licenses that one can obtain. The most common Financial Licenses are Series 3, 6, 7, 63, 65, and 66. Financial Institutions will accept the license that is issued by NASAA as long as the state requirements are met.Why Do I Need a Financial License?
Who Can Get a Financial License?
How to Apply for a Financial License?
Major Financial Licenses Obtained By Advisors and Representatives
Licenses Offered by Financial Industry Regulatory Authority (FINRA)
Licenses Issued by North American Securities Administrators Association (NASAA)
The Financial Industry Regulatory Authority (FINRA) administers the Series 63 exam.
There are 60 multiple-choice questions on the exam which must be completed within the allotted time of 75 minutes.
This is a state-level securities license. It allows individuals to work as investment advisers, among other things.
The Series 65 examination contains 130 multiple-choice questions. Candidates have 180 minutes to complete the exam.
It covers topics on Economic Factors and Business Information, Investment Vehicle Characteristics, Client Investment Recommendations and Strategies, as well as Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices.
The Series 66 examination contains 100 multiple-choice questions that are scored and 10 pretest questions that are not scored. Candidates have a maximum time of 150 minutes to complete the examination.
It covers the topics on Economic Factors and Business Information, Investment Vehicle Characteristics, Client/Customer Investment Recommendations and Strategies, and Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices.Key Takeaways
Financial License FAQs
Financial Licenses are required by Financial Institutions for their employees who are involved in Financial transactions. These are given by different Financial Institutions depending on the state's regulations.
You may need to get a Financial license if you are trying to work for Financial Institutions, Investment Banks, or Financial Advisers that need a Financial license.
Individuals who are planning to work in Financial Institutions and Financial Advisers in the Financial Industry may need to obtain Financial Licenses depending on what state regulations they are working under.
All Financial Licenses are issued by Financial Institutions. They will issue Financial Licenses as long as the state's requirements are met.
The process of obtaining Financial Licenses may vary depending on what state you reside in and which Financial Institution you are applying with.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
