Securities Sponsorship
Sponsorship For Securities Exam
You may be a aspiring Financial Services Professional that have decided that you want to take the Series 6, Series 7 or other Securities exam on your own. You need to understand that you can take preparation classes or study by computer based training (CBT) but you need to be sponsored by a FINRA Broker-Dealer. The firm must file the proper application and testing fee for you with the National Association of Securities Dealers (NASD).
By the way,
FINRA is the Financial Industry Regulatory Authority. They don’t sell a thing. FINRA regulate securities firms and stockbrokers that do. Their job is to protect investors every day by keeping the country’s capital markets fair. As a not-for-profit financial resource, FINRA offers unbiased information on a full range of issues that affect investors money and investments.
Typical Securities Licenses for Financial Services Professionals include:
- Series 6 –Investment Company Products/Variable Contracts Representative Exam
- Series 7 –General Securities Representative Exam
- Series 63 –Uniform Securities Agent State Law Exam
- Series 65 –Uniform Investment Adviser Law Exam
- Series 66 –Uniform Combined State Law Exam
- Typically Sponsorship Ad
Two Sample Job Ads:
- Stockbroker trainees will receive sponsorship for the series 7 & 66.
- Registered Representative will receive sponsorship for the series 6 & 63 and 65.
Third Party Placement Firms
Sponsorship really means you need an employer, plain and simple! There are some third party placement firms that will promise to set you up as an independent broker. This would include sponsorship. Typically it works like this: Prior to taking the Series 7 exam you will be required to interview with firms who will do a "due diligence" review of you. That same firm will employ you either as independent contractor or as an employee. Now keep in mind that the FINRA regulations assumes that it is your intent is to go to work for the firm that sponsors you. This intent is not contractual and you can change your mind. If you do this, the sponsoring companies may require you to reimburse them for any cost of study materials and other expenses they paid for.
Taking The “Test” Drive – Getting Sponsored
The following example depicts how a sponsorship advertisement might look:
- Step 1: Send $900 for FINRA registration and the actual exam. This does include our pretest book and hard copy exams. You will also get a CD-Rom with exams that simulate the actual computer based exam –CBT that you will take in a few weeks. By the way…do not forget to send your resume so we can place you with a great firm. By the way, it is ok if you are using another provider’s course material. Just send us $700 and we will arrange exam and sponsorship. Also if you don't buy our course and have a need to be a broker...we can arrange for sponsorship. The costs are $1,700 including exams and FINRA registration.
- Step 2: When we have received the proper completed paperwork and fees, we will then place you with an NASD firm which many times will have offices in all 50 States. The firm then does a due diligence on you per FINRA requirements.
- Step 3: After we arrange for sponsorship, you need to pass our pre test exam. We call this the “Green Light” exam. Taking this “Green Light” before taking the actual exam allows us to access your readiness and likelihood of actual passing the exam.
- Step 4: Upon passing the exam we have free career placement services for you with a great firm that matches your career goals. No guarantees…just great experienced help!
Exam Failures
If you fail the Series 7 exam (Or the Series 6 exam) on your first attempt, your sponsor can submit an request to reopen a window in which you can write the exam again. This window will not open until 30 days since your last exam attempt has transpired. At this point, your window will be open for 90 days. There is no requirement for a sponsor firm to terminate your employment should you fail. However, every time you rewrite the exam, you must pay the required registration fee. So your employer may require you to reimburse the fees they paid on your behalf. After three failed attempts, you must wait six months before you can re-write the exam for the fourth time. The six-month requirement is intended to provide a window in which an individual can ensure he or she is prepared for the fourth exam attempt. This process theoretically can continue indefinitely, as there is no limit as to the number of times you can attempt the series 7 or 6 securities exams. Please be advise that most firms will hesitate to hire a person that has failed these exams more than 3 times.
Note: The Series 6 and Series 7 securities exams require advance"sponsorship" by a firm prior to taking the exam. From time of application to time of taking the exam allow 8 weeks. Caution! Aspiring Financial Services Professionals need to exercise caution with dealing with third party sponsoring firms. Take time to understand the terms and conditions that the placement firm is putting in front of you.
Questions and Answers From FINRA
Question: A registered firm will sponsor me to take the Series 7 exam, but may not employ me for a number of months. If I pass the exam, how long do I have before I need to register with FINRA either through the sponsor firm or another firm?
Answer: The Series 7 is the "General Securities Representative" examination. Please visit the FINRA Administered Qualification Examinations Web page for more exam information, including the cost, duration (time) allowed, and required prerequisites. In order to take the Series 7 examination, you must be sponsored by a member firm of FINRA. This firm will submit an application, on your behalf, to take the examination. This will then open up a 120-day period during which you may schedule an appointment to take the examination at a local testing center. If you pass the Series 7 and do not register with the sponsoring FINRA member firm, you will have a period of two years to associate with another member firm without having to retake the exam. Source: FINRA
Question: How long will my FINRA qualification examinations be valid after I end my affiliation with a FINRA member brokerage firm?
Answer: Your FINRA registration effectively terminates when your broker-dealer employment is terminated, and you cannot conduct any securities business. Generally, if you start working for another broker-dealer within two years, you will not have to retake the qualification exams. However, if you wait more than two years, you generally will have to requalify by taking the exams again. In addition, your new firm can only maintain the registrations for activities in which you will actively be engaged. For example, if you served as a Series 24 Principal at your old employer and maintained the Series 7 Registered Representative and Series 24 Principal registrations at that firm, and are hired at a new firm only in a Registered Representative capacity, your new employer may maintain only your Series 7 registration and may not allow you to continue to hold your Series 24 registration. Rule 1070(e) authorizes FINRA to grant waivers of applicable qualification exams and to accept other standards as evidence of an applicant’s qualifications for registration. This authority is exercised only in exceptional cases and where good cause is shown by the member requesting a waiver on behalf of one of its associated persons. More information on FINRA exam waivers is available on the FINRA Web site on the Qualification Examination Waiver Guidelines page. Source: FINRA
Third Party Sponsoring Companies
How Do I Find The Companies That Will Sponsor Me?
There are firms that will consider sponsoring inexperienced (non financial professionals with no existing clients) individuals. Generally the firms will require your to enroll in their courses which include support, live class, books and sponsorship. Here’s a start:
How Do I Find States That Will Sponsor Me?
State Sponsorship
Caution! State Sponsorship usually implies residents only. Residents of other states generally must contact their own state's securities division for sponsorship. The following list is not inclusive:
Exams That Do Not Require Sponsorship
Series 63, 65, or 66 do not require sponsorship. You can sign up without a sponsor by filing Form U-10 and paying the fee. Indicate –None- or -Not Applicable- where the form requests a sponsoring firm.
NASD Forms and Guides