The majority of people who obtain the series 7 and 63 licenses will be required to pass the exam by their employer. Joining a financial firm is a very exciting time for most people as the embark on a new career. Part of the onboarding process will be for a person to obtain their series 7 and 63 license. When you are joining a financial services firm as a condition of employment, individuals are required to obtain both the series 7 and 63 license so they may represent the broker dealer. Others may have been with the firm for a while and are now changing roles or perhaps being promoted into a position that requires the series 7 and 63 license. The firm’s compliance department, home office or HR will notify individuals directly or through their managers as to the time frame for taking the series 7 and 63 exams. Most of the major broker dealers require their agents to obtain the series 7 and 63 licenses.
A series 7 license will allow those who pass the exam to conduct business in in all general securities products, including, stock, bonds, options, rights, warrants ETFs and in both open and closed end investment company products ( mutual funds ). Once you have obtained a series 7 license, in order to transact business in the various states, you will need to obtain your series 63 license. You will be required to pass the series 63 exam to become licensed in each state where you represent the broker dealer and have where you have clients. 3) How hard is it to get a series 7 and 63 license?
Obtaining a series 7 and 63 license is a very big accomplishment and it is not to be taken lightly. You are faced with the challenge of passing not one, but two tests. This takes focus and dedication to the exam preparation process. You should start off by focusing on the series 7 exam. It is significantly larger than the series 63 and it will require far more time to master the concepts. Students should not try to take the series 7 and 63 licensing exams on the same day. In fact, you should not even open the book for the series 63 until you have successfully completed the series 7 exam. Students who try to take both exams on the same day are rarely, if ever, successful. The series 7 is almost 5 times the size of the series 63 and it should be taken first. Once you have passed your series 7 exam take a few days off, but do not take a long time between tests. You should that the series 63 while you are in “study mode”. This process will challenge you and students who prepare to take the series 7 and 63 should prepare thoroughly for both exams. You cannot pass either test buy just taking practice questions. You must read a professional, college quality textbook There are no shortcuts and students should make studying a priority. We recommend at least 80- 100 hours of preparation to ensure you pass your series 7 exam and 35-40 hours for the series 63 exam.
If an agent wants to change employers they must go through a significant process from the registration point of view. Even though many believe that their series 7 and 63 licenses are transferable, in actuality they are not. If you wish to change employers your series 7 and 63 registrations / licenses must be terminated by your current employer. Your former employer / the firm you wish to leave must fill out and submit a uniform notice of termination, known as a Form U5, to FINRA. This will terminate your employment and your registrations with that firm. Once you arrive at your new FINRA member, you will be required to fill out and submit a new Form U4. Your new firm will sign and submit the new U4 to FINRA. This will begin your registration with your new firm. Your series 7 and 63 licenses will become active at your new firm upon receiving notice from both FINRA and the states where you conduct business. No license to conduct business will become effective until notice has been received that the license has been granted. Passing the exams do not grant a license to conduct business. Only the states and FINRA may grant the license.
Obtaining a series 7 and 63 license requires all candidates to make an investment in their professional development. Certainly everyone must invest a significant amount of time. A large number of candidates must also absorb at least some or all of the training costs. Your series 7 license will empower to represent a full service general securities broker dealer and will put many people on the road to a lucrative and successful career. The series 63 must also be passed and will license you to conduct business in any of the more than 40 states that currently require the license. The good news is, for those who have to pay for it out of pocket, the costs are relatively low when compared to other types of training, certification and college expenses. Some employers pick up or reimburse the costs of training and the testing and registration fees. Most candidates who receive training materials from their employers seek out additional training materials such as test questions and videos to ensure they pass their exams. For those who have to pay all of the expenses out of pocket, it usually only costs a few hundred dollars for the testing and registration fees and the training materials. Quality training materials are key for those who seek additional products. Low cost internet sites from offshore or with no phone number are low cost for a reason and should be treated with skepticism. There is nothing more expensive than having wait at least 30 days to take the exam again.
Maintaining your professional licensing will require ongoing continuing education. Once you have become fully licensed by passing the series 7 and 63 exams you will be required to meet FINRA’s continuing educational requirements for the series 7. FINRA’s CE requirement has two parts, a firm element and a regulatory element . Your employer is required to administer the firm element continuing education program. Your firm will have you attend a seminar, webinar or take an online course to satisfy the firm element continuing education requirement. This must be done every year. You will also be required to complete the regulatory continuing education requirement which is administered by FINRA. A series 7 license requires the licensed professional complete the S101 continuing education course. This is not an annual requirement. Your requirement will be based on your date of association with a FINRA member. Ther date of association for most people will be the date you passed your exam. You will be required to complete the S101 on the second anniversary of passing your series 7 exam and every three years thereafter. The S101 course may be completed at an approved facility or on FINRA’s continuing education portal. Your series 63 license does not have any continuing education requirements at this time.
Once you have become series 7 and series 63 licensed You are fully licensed to represent a broker dealer in the purchase and sale of all general securities. Should you wish to do business in variable annuity products or variable life contracts you must also obtain the life and health insurance license in your home state.
We hope that this answers many of your frequently asked questions about the series 7 and 63 licenses. If you have any additional questions please call or email us.
Good luck on your exam.
The Securities Institute of America, Inc.