Guide to Financial Securities Licensing in Financial Planning Services

(677 Words)
A securities license can be a powerful tool for a financial planner. It can allow you to sell securities, a much-desired service, and allow you to provide a more comprehensive package of services for your clients. It can also make you a great deal of money. Unfortunately, the securities licensing process is not an easy one, nor is it short. You may spend months studying and of course you need to pass the test. Once you have attained it, you must keep up with it.
The first step in financial securities licensing is finding a broker-dealer to sponsor you. There are a variety of companies from which to choose. Factors to consider when making this decision include the offered products and services and the level of payout on gross commission. Think about your current clients and what would interest them. For instance, you may choose one that offers retirement planning alternatives or one that deals with alternative investments such as 1031 property exchanges.
The two types of broker-dealers to consider are retail and independent firms. Retail firms may be more useful for someone who is starting in the financial industry with investment selling. Although they are independent contractors, they have a number of support services. These include everything from an office and business cards to health insurance and a retirement plan. There will be a manager. The terms are not as favorable as far as commission payments and you may be expected to produce more.
People who are established may choose to work with an independent broker-dealer. It allows them more flexibility to combine it with other services. The support services are minimal, however.
The licenses you need will depend on whether you choose a retail or independent broker. If you choose retail, then you are likely to need the Series 7, 66 (combination of 63, 65, blue-sky and registered investment advisory positions), 31, life and health insurance licenses.
Independent brokers may not be so rigid in the licensing requirements. Planners may be able to only secure the licenses that are relevant to what they wish to offer to their clients. For instance, CPAs wishing to deal with annuities and retirement planning services may take the Series 6 exam and not the more comprehensive Series 7.
Study, study, study
How long this takes will depend upon the skills of the planner and the exact exams he or she has chosen to take. Retail brokers will generally provide a lot of support, even offering a training program onsite within their company. They will usually compensate you for this time. How much support you get from an independent firm will range, but it will be much less. You may be able to at least purchase less expensive materials. There are other classes that you may be able to find.
The test
Now it is time for the test. If you prepared correctly, hopefully this time will pass successfully. Be sure to remember tests-taking strategies such as avoiding distractions and being mentally and physically prepared.
The Financial Industry Regulatory Authority (FINRA) will find out if you passed your exam. The broker will present you with paperwork. This includes the U-4 form, in which you will provide a residential and employment history. A background and credit check will also occur. You could still be rejected if you have a criminal offense or a major credit problem. You will be finger-printed and pay processing fees. Some firms will have further requirements.
Once you have your license, a retail firm will usually provide training, while independent brokers will usually do more on their own. Yearly continuing education requirements must also be met. These include the firm element for those who trade or sell securities and the regulatory element for those who have a Series 6 or 7 license in addition to people who supervise securities licenses.
Attaining a securities license can be an excellent business decision for a financial planner. Those interested should learn all about the intricacies of the process to determine whether it will be worthwhile for them.
Resources:
http://www.banktrainingcenter.com/securities_licensing.asp
http://www.abtrainingcenter.com/FINRA_licensing.asp