Understanding the Series 6 License

The Series 6 license, formally known as the Limited Representative-Investment Company and Variable Contracts Products license, permits individuals to sell a specific range of investment products. It’s a stepping stone for many entering the financial services industry, especially those focused on selling packaged investment solutions.

What You Can Sell

Holding a Series 6 license allows you to market and sell:

• Mutual Funds: Diversified portfolios of stocks, bonds, or other assets managed by professionals.
• Variable Annuities: Insurance contracts where returns are based on the performance of underlying investment options.
• Variable Life Insurance: Life insurance policies with a cash value component that fluctuates based on investment performance.
• Unit Investment Trusts (UITs): Fixed portfolios of securities held for a specific period.

Notably, the Series 6 *does not* permit the sale of individual stocks, bonds, options, or direct participation programs (DPPs) like limited partnerships. To sell these, you would need a Series 7 license.

The Series 6 Exam

The exam itself is administered by the Financial Industry Regulatory Authority (FINRA). It’s a multiple-choice exam consisting of 50 scored questions and a few unscored pretest questions. The passing score is 70%. The exam focuses on:

• Product Knowledge: Understanding the features, benefits, and risks associated with the products you can sell.
• Sales Practices: Adhering to ethical and regulatory guidelines when recommending products to clients.
• Regulatory Framework: Familiarity with the rules and regulations governing the sale of investment products.
• Customer Needs: Assessing clients’ financial situations and investment objectives to make suitable recommendations.

Prerequisites and Sponsorship

To take the Series 6 exam, you must be sponsored by a FINRA member firm. This means you need to be hired by a brokerage firm, bank, or other financial institution that’s a FINRA member. The sponsoring firm will file a Uniform Application for Securities Industry Registration or Transfer (Form U4) on your behalf.

Career Paths

The Series 6 license can lead to various entry-level positions, including:

• Registered Representative: Selling mutual funds and variable products at a brokerage firm.
• Bank Teller/Personal Banker: Offering investment products to bank customers.
• Insurance Agent: Focusing on variable annuities and variable life insurance.

Many professionals use the Series 6 as a foundation for further licensing, eventually pursuing a Series 7 to broaden their product offerings or obtaining advisory licenses like the Series 65 or Series 66 to provide investment advice.

Staying Compliant

Maintaining your Series 6 license requires ongoing compliance with FINRA regulations, including continuing education requirements. Failure to comply can result in disciplinary action and potential revocation of your license.