What Kind of License Do You Need to Practice as a Finance Advisor?

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Just like a doctor cannot practice without a degree, a financial advisor cannot lend advice without a license. If you wish to build a great career in the field, you have to secure a few licenses in the US.

Here is the list of licenses that one should achieve before working as a financial advisor in the US.

Series 6 License

The license is administered by the Financial Industry Regulatory Authority (FINRA). The license allows financial advisors to sell packaged securities to clients. This includes selling variable annuities and mutual funds. The advisor with this license is not eligible to sell individual bonds or stocks in the market. The first step to becoming a licensed financial advisor is by attaining a Series 6 License, then moving to Series 7.

Series 7 License

A Series 7 license is also administered by FINRA and is the gold standard of financial advisor licenses. With this license, the advisor can sell all kinds of bonds, futures, stocks, and options. The advisor also becomes eligible to sell packaged securities even without a Series 6 License. However, the Series 7 License does not cover commodities, life insurance, and real estate.

Series 63 License

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The Series 63 License is a must for all financial advisors if they wish to conduct business within the borders. It’s an exam that the advisor needs to clear along with Series 6 and Series 7 licenses. The exam covers laws and regulations in length and is a 75-minute test only.

Series 65 License

A Series 65 License is for advisors who are compensated with fees rather than commission. This exam also consists of rules and regulations in-depth to check the person if they are eligible to become an expert. Note that CFAs or CFPs might get their Series 65 requirement waived by FINRA.

Attaining these licenses can be tough, but the person cannot operate in the industry for a long time without them. If found offering financial services without a license, the government holds the right to put restrictions on you or to stop you from offering your services altogether. Make sure to complete all certifications to be eligible to administer your services to the community.

Francisco Jose Faraco is a CFA charterholder who is currently working as a teaching assistant in the Financial Mathematics department at the University of Chicago. He has been living in New York City for the last 12 years with his family.

 

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