What Is the Series 6?
Let me explain to you what the Series 6 is. It's a securities license that lets you register as a company's representative and sell specific types of mutual funds, variable life insurance, municipal fund securities, variable annuities, and unit investment trusts (UITs). If you hold this license, you're not allowed to sell corporate or municipal securities, direct participation programs, or options.
Key Takeaways
Here's what you need to know right away. The Series 6 is a securities license that entitles you to register as a company's representative and sell certain financial instruments. To get it, you must pass the Series 6 exam, and you need sponsorship from a FINRA member or self-regulatory organization (SRO).
Licensed Professionals
If you're in the financial services industry, the Series 6 license comes into play for roles like financial advisors, retirement plan specialists, investment advisors, and private bankers. With this FINRA license, you can act as a registered representative to sell mutual funds, variable annuities, and unit investment trusts (UITs).
Remember, you can't sell other securities such as stocks, bonds, or options with just a Series 6. For those, you'd need something like the FINRA Series 7 license.
As a Series 6 holder, you'll provide investment advice and recommendations to clients, handle transactions, and keep accurate records of your activities. You might work for a brokerage firm, bank, insurance company, or another financial institution.
FINRA Requirements
To get the Series 6 license, you have to pass the Investment Company/Variable Contracts Products Limited Representative (Series 6) exam. The Securities Industry Essentials (SIE) exam is a corequisite, but it doesn't require firm sponsorship.
FINRA administers the Series 6 exam, which covers mutual funds, variable annuities, securities, tax regulations, retirement plans, and insurance products. You must be sponsored by a FINRA member or SRO to take it, and it has 50 scored questions.
Once you pass, register with FINRA through your sponsoring firm to handle authorized securities. As a holder, you're a limited representative who can sell certain mutual funds, variable annuities, and variable life insurance.
Warning
Be aware that Series 6 license holders are not authorized to sell stocks, exchange-traded funds (ETFs), or bonds.
Taking the Exam
FINRA started offering online testing for the Series 6 through Prometric in 2020, so you or your employer need to install specialized software and provide cameras. Your Series 6 license expires two years after employment ends, unless there are special circumstances like military deployment. The SIE exam stays valid for up to four years.
You need a 70% passing grade by getting at least 35 of 50 questions right in 90 minutes. There are five additional unscored questions, making 55 total. The test costs $75, is computer-based, and allows no reference materials.
As FINRA outlines, the exam breaks into four sections. The first is 'Seeks Business for the Broker-dealer from Customers and Potential Customers,' with 12 questions covering 24% of the exam. Then there's 'Opens Accounts After Obtaining and Evaluating Customers' Financial Profile and Investment Objectives,' with eight questions at 16%. The biggest part is 'Provides Customers with Information About Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records,' with 25 questions covering 50%. Finally, 'Obtains and Verifies Customers' Purchase and Sales Instructions; Processes, Completes, and Confirms Transactions' has five questions at 10%.
Series 6 vs. Series 7
People often compare the Series 6 to the Series 7 exam. The Series 6 costs less, has a shorter test, and covers less material. But for some financial advisors, investment advisors, and retirement planners, Series 6 is sufficient to sell insurance, annuities, and certain mutual funds.
With Series 6, you can't sell stocks, ETFs, or bonds. If you want to sell ETFs as a financial advisor or retirement planner, get the Series 7, which involves a longer, more comprehensive exam. The Series 7 is broader and can lead to more job opportunities in securities.
Are License Holders Required to Take Continuing Education Courses?
Yes, you must fulfill continuing education requirements and have sponsorship from a FINRA-registered company to maintain your Series 6 license. FINRA’s program includes a regulatory element and a firm element. Under FINRA Rule 1240, you complete the regulatory element by December 31 each year. The firm element means broker-dealers set up their own continuing education programs.
How Much Does the Series 6 Exam Cost?
As of 2024, the Series 6 exam costs $75.
How Long Is a Series 6 License Valid?
After two years, you must complete continuing education credits based on your state's rules. The CE regulatory element is due by December 31 each year, or your registration goes inactive. If inactive, you can't engage in or get paid for securities activities. If it stays inactive for two years, the license terminates, and you'd need to re-qualify by exam.
The Bottom Line
In summary, the FINRA Series 6 is a securities license letting you act as a registered representative to sell mutual funds, variable annuities, and unit investment trusts (UITs). You must pass the FINRA-administered Series 6 exam to get it.
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