Those new to the insurance industry who want to become insurance agents, specifically life insurance agents, may not know that they may have to acquire additional licenses. Insurance brokers who are new to the business may likewise need similar licenses.
One of the licenses that, at first glance, appears to be outside the domain of insurance is the Series 6 license. The Series 6 license is typically associated with financial advisors, investment advisors, and retirement planners. However, this license can also be of great value to some insurance agents and brokers.
To dispel confusion and inform insurance professionals on how to expand their portfolio of products, Insurance Business offers this guide on the Series 6 license. We’ll delve into how a FINRA-supplied license can benefit insurance companies and insurance professionals like you. This guide should provide insight into the many questions you’ll have about the license, including:
Also called a Series 6 registration or qualification, this license allows individuals to become a company’s registered representative who sells certain financial products. Those who have a Series 6 securities license are qualified for a career in financial services as a financial planner, retirement plan specialist, or even a mutual fund representative.
But if that’s not your intent as an insurance professional, this qualification can boost your value to clients with these integrated financial planning services. Note, however, that a Series 6 license does not grant any authorization to sell individual securities like stocks, ETFs, bonds, or options.
Even as an insurance professional, there are several good reasons for obtaining the Series 6 license.
Here are the top reasons:
Obtaining the Series 6 license allows you to sell securities products like mutual funds, variable annuities, 529 plans, and unit investment trusts. Offering these additional products can make you more valuable to your clients.
Many insurance companies are willing to pay higher salaries or offer higher commission rates to individuals with the Series 6. Passing the exam can therefore increase your earning potential in the finance or insurance industry.
This way, a Series 6 license can open alternative income streams for the committed insurance professional and enterprising insurance companies.
You can check out this guide if you want to get an idea of how much an insurance agent makes.
Related to increased potential earnings, a Series 6 license can help you obtain a higher position in a company. Knowing about mutual funds and variable contracts and the ability to recommend these products can make you a sought-after hire.
Various financial institutions like insurance companies, brokerages, mutual funds companies, and even banks will want to have a Series 6-licensed professional on their team.
This license can enhance your credibility in the eyes of clients, colleagues, and industry peers.
Like many other professional licenses or designations, the Series 6 is a demonstration of your commitment to the industry. It also signifies your dedication to giving high-caliber financial advice and services.
Picture this: a long-time client approaches you for information about investments or how to purchase a product you aren’t licensed to sell. This is an issue to look out for, especially with clients who have a longstanding, secure relationship with you. They may bring up topics that you aren’t qualified to discuss without a Series 6.
Rather than sending them off to other financial product representatives for advice, the license will give you ample knowledge and authority to answer these questions. Your client may not even prefer to use AI to inquire about these products. With this license, you can potentially earn more revenue by offering the products your client is curious about.
“The [Series 6 license] allows you to be compensated for (referral and personal production) for ‘packaged products’ such as mutual funds, variable annuities, variable life insurance, and UIT’s,” says Nic Nielsen, CFP and CLTC at North Carolina-based financial planner Know My Plan.
By serving as the go-to person for insurance and financial products, you foster a deeper relationship with your clients.
Getting your Series 6 license can be a relatively straightforward process. Here are the steps:
Candidates can take a course in preparation for the Securities Industry Essentials (SIE) exam. There are several course providers, but you are advised to only take those from accredited by the Financial Industry Regulatory Authority (FINRA).
The SIE exam covers common finance-related topics like the fundamentals of finance, relevant regulatory agencies and their functions, product knowledge, and ethical practices.
However, candidates can still take the SIE exam pending their sponsorship and even while they are still in school. Once you pass the exam, you have a four-year window to take the Series 6 exam.
Note that FINRA regards the SIE and Series 6 exams as "corequisite” qualification exams. But this does not mean you must take both exams simultaneously. Rather, you have to take both to earn your license, although you can take them in any order.
An important requirement for taking the SIE exam is that you must be sponsored by a FINRA-registered firm or a Self-Regulated Organization (SRO) like an insurance company. Due to this requirement, it’s the firms that must apply on behalf of those pursuing the Series 6.
With the help of their sponsor, candidates must file a Uniform Application for Security Industry Registration or Transfer (Form U4). There is also an exam fee, which is typically paid by the sponsoring firm.
After completing the preceding steps, it’s time to take the Series 6 exam. While most candidates choose to take the SIE before the Series 6 license exam, it's also possible to take the Series 6 exam first, then the SIE afterwards.
Series 6 exam content
When taking the Series 6 exam, you can expect 50 questions spread across four different sections:
The passing score for this exam is 70%. You will be given 90 minutes to complete the exam. If you do not pass the exam the first time, you will have to wait for 30 days before retaking the exam.
Should you fail on your second try, you will have to wait again for another 30 days for your third try.
If you fail on the third try, you will be given the chance to retake the exam after 180 days.
Exams can be taken remotely or at a local test center. Both of these options go through Prometric, the vendor used by FINRA. Candidates can take more than one exam if they can manage it. You can take your SIE and Series 6 on the same day, for instance.
Once you’ve passed the exam, you may register your Series 6 license with FINRA and an approved broker-dealer. The broker-dealer will hold your license and oversee your business for a portion of the commission income.
How long does a Series 6 license last?
Your license will remain valid as long as you stay registered and are in good standing with FINRA, the license’s regulatory organization.
Also, you must remain employed by a FINRA-registered firm. This does not have to be your sponsoring firm. If your employment ends or the registration expires, your Series 6 license loses its validity.
To keep the Series 6 license or any FINRA license, the licensee must comply and complete their Continuing Education (CE) requirements. In the case of the Series 6, the following rules apply:
The Series 6 license allows individuals to solicit, buy, and sell a limited range of investment products.
This can include:
The Series 6 is mainly designed for entry-level representatives who perform critical job functions related to investment companies and variable contracts.
Meanwhile, the Series 7 license enables individuals to solicit, buy, and sell virtually all types of securities products. This includes:
The Series 7 is a valuable tool in assessing the skill of entry-level registered representatives as general securities representatives.
Keep in mind, however, that the Series 6 and Series 7 licenses have these in common: both require candidates to be sponsored by a FINRA-registered firm or SRO. They also have the SIE exam as a “co-requisite” mandated by FINRA, but it does not need to be sponsored.
“Theoretically, Series 7 is supposed to be more challenging,” Nielsen explains. “The Series 7 exam is all of the Series 6 stuff plus the big difference is ‘options.’
“If you understand calls and puts and corresponding buys and sells, it actually makes the exam much easier. There are quite a few questions on options and most of them are relatively simple.”
Employers, typically FINRA-registered firms or Self-Regulating Organizations like insurance companies, can support those pursuing the Series 6 mainly by:
No, this is not a mandatory requirement of insurance agents. And since it’s not part of the process of becoming an insurance agent, choosing not to pursue it poses no consequences.
But according to Nielsen, this can be the main reason for some to get a Series 6. “The only reason why would be able to sell variable products (VUL & Variable Annuities),” he says.
In some US states, you need more than a Series 6; you will have to pass the Series 63 exam – a topic we here at Insurance Business may cover in another article.
As an insurance professional, do you need to acquire the Series 6 license? That depends on factors like your plans for your career and your intentions for the license. If you plan on becoming a successful life insurance agent, this qualification can certainly help, as it’s required to sell variable life insurance.
For insurance professionals seeking a higher credential that provides more knowledge, increased credibility, better employment, and the potential for higher earnings, this is worth acquiring. After all, higher credentials like this offer more knowledge and can lead to greater chances of career advancement and success.
Did you find this guide on the Series 6 license helpful for your career? Share your thoughts in the comments
