What Are the Key Types of FINRA License and Certification

So you plan on selling investments. Whether you will be working as an investment advisor or a registered representative, you need the relevant securities license. The appropriate license for you depends on the type of investment you will be selling, the scope of your services, and the compensation method. 

You need a FINRA license to work in the finance industry. This includes insurance agencies, credit unions, banks, and investment firms. Here are a few types of FINRA licenses and certifications that you may need.

1. Series 3 (National Commodities Futures Exam)

This license permits representatives to sell commodity futures contracts. They are some of the riskiest publicly traded investments. If you carry this license, you will mainly specialize in commodities.

The Series 3 exam has 120 scored questions, and it takes about 150 minutes. It covers commodities transactions, margin requirements, options hedgings, and more regulations. You must score 70 percent on the two-part exam to get the license.

The Series 31 license is an offshoot of this license. It gives representatives the freedom to sell managed futures.

2. The Series 6 (Life Insurance Sales, Mutual Funds, and Annuities)

The Series 6 license is also known as the limited investment securities license. It lets a holder sell packaged investment products. These products include unit investment trusts, mutual funds, and variable annuities.

The exam takes 135 minutes, and it covers basic information about securities regulations, packaged investments, and ethics. The license is also one of the essential FINRA certifications for insurance agents looking to sell variable products.

This is because securities include underlying investments within the products mentioned above. If you supervise representatives with a Series 6 license, you also need to get the Series 26.

3. Series 7

This license is also known as the General Securities Representative (GSR) license. It authorizes you to sell almost every kind of individual security.

This includes preferred and common stocks, bonds, call and put options, and various packaged products. However, this doesn’t include those whose sales need a life insurance license.

Series 7 authorizes you to sell most of the major commodities except real estate, life insurance, and futures.

The Series 7 exam is the longest securities exam. It is also the most difficult one, and you need lots of effort in preparation. The exam lasts 225 minutes. It covers the following aspects:

  • Stock and bond quotes
  • spreads and straddles
  • put and call options
  • margin and more account holder requirements
  • ethics

FINRA officially lists you as a registered representative or stockbroker if you hold this license. Various financial planners and advisors also have the license.

It empowers you to facilitate many transactions that are necessary for your business. Get the Series 24 license if you are a principal of general representatives.

4. Series 65

The FINRA Series 65 license is a NASAA Investment Advisers Law certification. However, FINRA administers the exam. This exam has 130 scored questions, and you need to complete it in 180 minutes. You need to answer at least 94 of the 130 questions correctly to pass the exam.

When you obtain this certification, you can work as an Investment Adviser Representative. In some states, completing the Series 65 exam empowers you to serve as an investment adviser until you are registered and licensed in the relevant state.

FINRA licenses may not be necessary, but they can make things easier for you as you explore a career in finance.

After obtaining your license, you have to keep updating it if any information changes or turns out to be inaccurate. FINRA licensing introduces ethics into the industry. It protects the public from harmful practices and fraud.