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A Guide to Financial Securities License Exams

October-04-2021
A Guide to Financial Securities License Exams

Breaking Down Financial Securities Licenses (and Why Practice Exams Can Help You Get Yours)

The financial world is full of opportunities, including becoming a stockbroker, selling investments, and advising others. However, before you can get your career off the ground, you'll need to ensure that you have the proper licensure to sell the type of investments or engage in the type of services you are seeking to pursue. Largely, these are licenses administered by the Financial Industry Regulatory Authority, Inc. (FINRA) or by the North American Securities Administrators Association.

Let's explore the available FINRA licenses and the requirements you'll need to meet to earn them. We'll also discuss how practicing FINRA exams can help you get the best possible score on your official licensing tests.

What Is a Securities License?

Securities licenses are granted to enable people to become professional investors and financial advisors while ensuring a safe and fair market. There are several versions, called series licenses, that specify which types of financial products the person who holds that specific license can sell or trade.

In the United States, FINRA is a not-for-profit organization authorized by Congress to regulate licensing for securities administrators. However, NASAA expands that authority into the U.S., Canada, and Mexico. Regardless of which type of exam you take and which type of license you obtain, these entities ensure that you have the appropriate knowledge and expertise. As a result, investors are protected from fraud and financial harm.

FINRA's Representative-Level License Exams

The following FINRA exams provide you with different types of representative-level licenses. Each test features a link to the corresponding Exam Edge practice exam page, where you can purchase practice tests to help guide your preparation.

Series 6

The Series 6 FINRA test assesses the knowledge and skills of potential investment company and variable contracts products representatives. In order to get full licensure, you'll need to pass the Securities Industry Essentials (SIE) exam.

In order to be eligible for a Series 6 license, you must first be associated with or sponsored by a securities firm that is a member of either FINRA or another regulatory body. The license allows you to sell:

  • Unit investment funds
  • Variable annuities
  • Variable life insurance
  • Municipal fund securities
  • Mutual funds

The Series 6 exam costs $40, lasts up to one and a half hours, and contains 50 questions in total. Its content includes evaluation of customers' financial data, identification of investment objectives, making recommendations on investment products, business development, appropriate account records, and similar items. You must get a score of at least 70 to pass.

Series 7

The next in our list of FINRA licenses, the Series 7 FINRA exam is for general securities representatives or stockbrokers. The bulk of this exam tests your knowledge on providing customers with investment information, making financial recommendations, transferring assets, and keeping relevant records. You'll also need to know how to evaluate a customer's financial profile, verify purchase and sale agreements, and seek business for your clients.

This $245 exam contains 125 questions and must be completed in three hours and 45 minutes. You will need to get at least a 72 on the exam in order to pass, but it is far more useful than a Series 6 license. In addition to the products you can sell with a Series 6, the Series 7 allows you to sell all securities products. This includes government securities, hedge funds, venture capital, and much more.

NASAA License Exams

Exam Edge also provides plenty of practice tests for the NASAA license exams. Just as with the FINRA tests, these licenses come in a variety of series. Below, we'll break down what's on each test, what the license allows you to do, how much they cost, and other crucial information. Click on the linked test name to head over to our practice exam page and get started on your prep today!

Series 63

The Series 63 exam is also known as the Uniform Securities Agent State Law Examination. It is designed for broker-dealer representatives and requires in-depth knowledge of the State Securities Act. Over half of the test deals with the State Securities Act and associated regulations, with topics that include:

  • Regulation of Investment Advisors
  • Regulation of Investment Advisor Representatives
  • Regulation of Broker-Dealers
  • Regulation of Securities/Issuers
  • Remedies and Administrative Provisions

The rest of the exam focuses on best ethical practices for the financial industry as well as obligations to regulatory bodies, the public, and your future clients. You do not need to have a sponsor for this or other NASAA exams, but the exam itself also does not directly provide you with a license. Instead, these exams are the first step toward getting licensed by your state.

The Series 63 test has 60 questions, lasts one hour and 15 minutes, and costs $147. You will need a score of at least 72 to pass.

Series 65

The Series 65 investment license is for investment advisor representatives. Its full name is the Uniform Registered Investment Advisor Law Exam. The majority of the test is composed of questions on regulations within the financial realm and on best practices for recommending products to customers.

You will need to know information on the State and Federal Securities Act(s) as well as ERISA, retirement plans, capital market theory, and more. Other parts of the test cover basic economic principles like risk and financial reporting as well as the characteristics of various financial vehicles (such as equity securities, derivative securities, and alternative investments). This exam is the most intense of the NASAA tests, taking up to three hours to complete. It has 130 questions and costs $187. Similar to the Series 63, you will need a score of 72 to pass.

Series 66

Finally, we come to Series 66. Known as the Uniform Combined State Law Examination, this test essentially takes the place of Series 63 and 65. A passing score on this exam qualifies you as if you had passed both other exams. However, one caveat is that you are only eligible to take the Series 66 test if you have already passed the FINRA Series 7 exam.

Half of the Series 66 exam is dedicated to laws and regulations. Client investment recommendations and strategies make up 30% of the exam, with the remaining questions covering the characteristics of investment vehicles (like those listed above for Series 65) and basic economic theory.

Slightly more condensed than Series 65, the Series 66 exam has only 100 questions and costs $177. It lasts up to two and a half hours, and you must get at least a score of 72 in order to pass. The good news, though, is that passing this exam opens you up to all the career options that the other series' exams hold.

Preparing for Your Financial Securities License Exam

The best way to prepare for your FINRA license exam is to utilize practice tests. At Exam Edge, our practice exams mirror the content of the real test, and we provide real-time feedback on any missed answers. Take the test in either timed or untimed versions to see how you'd do on test day, then use the feedback to craft a personalized study plan for the exact areas you need to hone.

Financial licenses open up plenty of career opportunities and high wages, but only if you take the time to st

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