May
16
How do I become a Chartered Financial Analyst (CFA)?
May 16, 2012 | Consulting, Exams, Professional Designations | Comments Off
The Chartered Financial Analyst registration is a globally recognized standard for measuring the competence and integrity of financial analysts. The curriculum develops and reinforces the knowledge of investment principles. Three levels of examination (one test/level each year for three years) measure the candidate’s knowledge. The exam is given the first Saturday and Sunday of June in over 70 nations.
Exam Requirements: Candidates must complete the exams sequentially and may sit for only one exam each year. Candidates who fail repeat that level the next year. Level 1 consists of multiple-choice questions, Levels 2 and 3 consist of problems, cases, essays, and a small number of multiple-choice questions.
Application processing takes about three weeks with the final deadpline generally being March 1. Applications can be filed over a specific time period with certain cut-off dates; the closer to the actual exam, the more expensive the application fee is.
Here is their web site: http://www.cfainstitute.org/
May
16
Go to our Links page and click on “domestic and international test sites”. That will take you to FINRA’s link showing all Pearson-Vue and Prometric testing centers. There will be an 800 number that you can call to make your appointment and it will show you the address of the nearest center to you.
May
16
Do I need a sponsor in order to sit for the 65 exam?
May 16, 2012 | Exams | Comments Off
You do not need a sponsor to sit for the Series 65 exam. Individual applicants (those not affiliating with an existing firm) can submit a U-10 form. Just fill in “Not Applicable” where the form requests a sponsor.
May
15
How Do I Become A Stockbroker?
May 15, 2012 | Consulting, Exams, Professional Designations | Comments Off
Stockbroker, financial consultant, financial advisor, securities broker — these are all general terms used by individuals and brokerage firms alike, to refer to a regulatory term of “registered representative” — or shortened to “registered rep”. A registered rep is an agent of a broker/dealer who is paid commissions on the trades placed through the firm on behalf of their customer.
A stockbroker who wants to offer general (or a “full line” of) securities would sit for the Series 7 exam. The series 7 exam was created by the New York Stock Exchange and is administered by the Financial Industry Regulatory Authority (“FINRA”). Most Series 7 reps are referred to as a “stockbroker”.
Registered representatives, however, may want to “limit” their registration and offer only a specific group of securities. As an example, “mutual funds”, or investment company products representatives, sit for the Series 6 exam — and only offer comments on mutual funds; Series 22 representatives only offer direct participation programs, and Series 62 representatives only offer corporate securities. Some people sit for the Series 6 or Series 62 exam to get into production faster, and then take the Series 7 later on.
Stockbrokers often offer commodity futures, commodity limited partnerships or “managed futures”. A separate registration is required, however, and that is having passed the Series 3 exam and being registered with the National Futures Association (“NFA”) as an “Associated Person”. The securities firm that the stockbroker is registered with must also be registered with the NFA / CFTC in order to offer futures products.
You need to interview with the kinds of firms that you feel will provide you with the best opportunity to be successful and offer the kinds of securities you would like to work with. If you’re looking to lower your trading commissions or just to trade your own account, most firms will not be interested in hiring you.
Firms are looking for individuals who can create commissions for the firm. If you’re well contacted or are “sales oriented” and can generate new leads and accounts, firms like Merrill Lynch, Smith Barney, Morgan Stanley, etc., will be a good fit — since your income will depend upon the commissions you generate.
If you want to be “service oriented” and receive a salary, you will want to interview with firms like Fidelity Funds or Charles Schwab. In either case, arrange directly for an interview with the branch/location where you would like to work; generally, brokerage firms will not pay a relocation allowance for a new representative. If the firm wants you — they will sponsor you for the Series 7 exam. Most FINRA exams require a sponsor in order to sit for the test.
Some think having passed the Series 7 exam prior to interviewing makes the candidate more likely to get a job as a stockbroker. It might — if two candidates are interviewing and are identical in all skills except one has passed the Series 7 and one hasn’t. What the firms are really looking for are the right skills.
When you’re new to the securities business, though, you want to learn as much as you can before interviewing. One of those ways, if your situation allows, is to pass any exam that you’ll probably need in
production before your interview — if your situation allows. You can sit for the Series 3 Commodity Futures Exam, the Series 63 Uniform State Laws Exam, and the Series 65 Uniform Registered Investment Adviser Exam without a sponsor. This also saves the broker/ dealer some money and (some think) shows the candidate is motivated.
The current exam fee for the Series 7 exam is $250.00, the Series 3 is $95.00, the Series 65 is $120.00, and the Series 63 is $82.00. You have two years from the date you pass the exam to complete your registration – otherwise you have to sit for the exam again. What this means is that if you pass an exam and then don’t go to work for the firm for some reason, you have two years from the date you passed the test to find another firm and register (with FINRA).
Remember, passing an exam is only one step in the registration process. You must be complete the registration process before you attempt any type of solicitation.
There are no educational or citizenship requirements to sit for the Series 7 exam; there is an age requirement where you must be of “legal age” and this is established by each state — generally being 18 years. Keep in mind, the brokerage firm that hires you may have more restrictive requirements (for example a college degree and 21 years of age).
After having passed the necessary exams you must complete your registration by having a background check, fingerprint card, register with the FINRA/NFA, and register with the Securities Commission of each state that you will do business in. In securities registration there are two levels of registration: federal and state. On the federal level you take the Series 6, 7, 62, etc., and then on the state level the State Securities Administrator will generally require you to have passed the Series 63 exam.
The application form for the FINRA exams that the Broker/ Dealer uses is called the U-4 form. If the firm you are going to work for is not an FINRA-member firm (for example a Registered Investment Adviser) a form U-10 is usually used.
FINRA administers exams for its own requirements, the National Futures Association (NFA), and the North American Securities Administrators Association (NASAA) through test sites run by Prometric Test Centers and Pearson VUE Testing Centers. Test Centers are located in many cities throughout the U.S. NFA exams include the Series 3, 30, 31, and 32. NASAA exams include the Series 63, 65, and 66.
May
15
What is a Registered Investment Adviser and how do you become one?
May 15, 2012 | Consulting, Exams, Professional Designations, Series 65, Series 66 | Comments Off
A Registered Investment Adviser (“RIA”) is an entity who, for compensation (in any form), engages in the business of advising others, either directly or indirectly, of the value of securities or of the advisability of investing in securities. They receive a management fees and do not receive commissions (“RIAs receive fees, stockbrokers receive commissions”). Incentive fees can be charged if certain conditions are met.
To become an Registered Investment Adviser you must register with the Securities and Exchange Commission (SEC), if you manage $25 million or more. If you manage less than $25 million you are still under the regulatory control of the Securities and Exchange Commission but SEC oversight is delegated to the State Securities Commission (or other regulatory agency) in your state of domicile – and with each state where you will solicit business (subject to “di minimus” exemptions).
Usually, Investment Adviser Representatives (“IARs”) of any Investment Adviser must register in each state they solicit or do business in.
Registration as a Registered Investment Advisor is oftentimes a prerequisite to setting up a Hedge Fund. If the hedge fund trades commodity futures contracts, registration as a Commodity Trading advisor may also be required.
Exam Requirements:
There is no exam requirement by the Securities and Exchange Commission at the federal level for the RIA entity. “IARs” (Investment Advisor Representatives), however, generally have to pass an exam; each state has its own specific requirements.
Although State requirements are becoming more uniform, you must contact the respective state agency that supervises investment advisers; ask them for the proper registration forms and procedures, and which, if any, exam is required.
The state agency will provide the test application form (generally a “U-4″ or a “U-10″ form) along with a registration packet for your completion.
Generally, states require NASAA’s Series 65 Uniform Investment Adviser exam. Some states require the principal of the RIA to pass the exam with a score greater than 70%.
An alternative to the Series 65 is the combination of the Series 7 and Series 66 exams. The Series 66 is only good in conjunction with the Series 7; most states will not sponsor a candidate for the Series 7. The 7/66 combination is generally used by an employee of a securities brokerage firm who is also registering as an investment adviser. The Series 66, essentially, equals the combination of the Series 65 and Series 63 exams.
A sponsor is not required to take either the 65 or 66 exams — but just passing the exam is only one step in the procedure. You must complete the registration process before you can solicit accounts! Note that the Series 66 is not valid until you pass the Series 7 exam.
Exams are administered Monday through Friday on computers by the Prometric and Pearson VUE testing centers located in cities throughout the U.S. and in certain overseas locations.
The Series 65 exam requirement may be waived if the applicant holds certain professional designations, i.e., Certified Financial Planner (CFP), Accredited Personal Financial Specialist (APFS), Chartered Financial Consultant (ChFC), Chartered Financial Analyst (CFA), or Chartered Investment Counselor (CIC).
If you are going to register in more than one state you must meet the requirements of each state.