No, You Don't HAVE to Have a Securities License for Everything

[Tahoe Ray]

Has it ever struck anybody besides me that it only takes a 70% score on a licensing exam to start legally dispensing financial advice?

The old joke goes:
Q) What do you call a medical student who finishes at the bottom of his class?
A) Doctor

You have huge oversight from your broker/dealer which won't let you pick your nose without filling out a form.

I get what you're saying but disagree with the analogy.

 

[shonceman]

You have huge oversight from your broker/dealer which won't let you pick your nose without filling out a form.

I get what you're saying but disagree with the analogy.

You're right, of course. But I first had that thought 30 years ago right after I passed my series 6 exam. Still makes me chuckle!

 

[toolbelt]

Has it ever struck anybody besides me that it only takes a 70% score on a licensing exam to start legally dispensing financial advice?

The old joke goes:
Q) What do you call a medical student who finishes at the bottom of his class?
A) Doctor

"Well look Mr Smith, I realize that 70% of your investments are now worth $0, but I've made you 5% on the remaining funds.....so it's not a total loss"???

 

[Tahoe Ray]

You're right, of course. But I first had that thought 30 years ago right after I passed my series 6 exam. Still makes me chuckle!

I got my 7 and 63 over 20 years ago and I'll agree that A LOT has changed.

 

[ebayn001]

This has been coming up a lot lately, so here's my brief answer to all this stuff.

Securities licenses (Series 6, 7, 63, 65, 66, etc.) are required for the following:
- Buying recommendations and transactions of securities for clients
- Selling recommendations and transactions of securities for clients
- Holding securities recommendations for clients
- Professional analysis and advice regarding securities.

The Series 6, 7, & 63 allow you to earn commissions on the sales of securities.
The Series 65/66 allow you to earn asset-based management fees on portfolio management platforms.

That's it.

If you have a life insurance and annuity license for fixed insurance business, can you do:
- IRA rollovers? Yes, but only to those products you are licensed to sell.
- Roth IRA? Yes, but only to those products you are licensed to sell.
- Retirement Planning? Yes, but only to those products you are licensed to sell.
- 401k plans? Yes, by using a non-registered group variable annuity which may be sold by a life insurance licensed professional. May be subject to further state regulations. (A business owner is considered a sophisticated investor, which means the transaction is exempt from registration.)
- 529 plans? Unfortunately no, because these seem to only be available from mutual fund companies.

You do NOT have to have a securities license to sell an IRA, Roth IRA, a 401k plan, or to do retirement planning.
You DO need a securities license to do any buying, selling, holding, or analysis recommendations regarding securities.

However, just because you CAN do something, doesn't mean you know all the considerations into doing it in the first place.

Can a person contribute $5,500 to a traditional IRA and deduct the contribution from the current year's taxes? That depends.
1) How much income do they have? At higher income levels, the deduction phases out. You can still do a non-deductible traditional IRA contribution... did you know that? But you had better not co-mingle this IRA with other IRA balances.
2) Do they have a company retirement plan at work? This can limit or eliminate how much they can contribute.
3) What about their spouses? Can a contribution be made for them? That depends on the above two questions as well.

[EXTERNAL LINK] - Retirement topics - IRA contribution limits | Internal Revenue Service

Can you tell that the question has almost nothing to do with what to sell them or what you can sell them, but rather the rules and regulations behind the decision in the first place???

BTW, your compensation for the sale, implies that you have done this analysis before selling the product. If you haven't, or you didn't know what the factors are behind the sale... then I sure hope your E&O is paid up.


Some of these questions that have come up recently is, in my opinion, further proof that most people should get started in a CAPTIVE agency so they can learn what they CAN and CANNOT do. When you start out as an INDEPENDENT, you don't learn these things.

Also, I think it's a great idea that people who want to do this kind of business get securities licensed so they know what they can and cannot do with their licensing. In addition, obtaining professional designations will help with this learning curve.

PMG Power Blog: If You

----------

BTW, along these lines, Columbus Life has a great free Tax Reference App for your phone. It's a GREAT resource so you don't have to memorize everything. It's the only one I know of.

https://www.columbuslife.com/becomeaproducer/tax.php

DHK:

What is needed in California to sell a 401(k) plan?

 

[DHK]

For a nonregistered group variable annuity or group fixed indexed annuity... just a life license.

 

[marindependent]

This has been coming up a lot lately, so here's my brief answer to all this stuff.

Securities licenses (Series 6, 7, 63, 65, 66, etc.) are required for the following:
- Buying recommendations and transactions of securities for clients
- Selling recommendations and transactions of securities for clients
- Holding securities recommendations for clients
- Professional analysis and advice regarding securities.

The Series 6, 7, & 63 allow you to earn commissions on the sales of securities.
The Series 65/66 allow you to earn asset-based management fees on portfolio management platforms.

That's it.

If you have a life insurance and annuity license for fixed insurance business, can you do:
- IRA rollovers? Yes, but only to those products you are licensed to sell.
- Roth IRA? Yes, but only to those products you are licensed to sell.
- Retirement Planning? Yes, but only to those products you are licensed to sell.
- 401k plans? Yes, by using a non-registered group variable annuity which may be sold by a life insurance licensed professional. May be subject to further state regulations. (A business owner is considered a sophisticated investor, which means the transaction is exempt from registration.)
- 529 plans? Unfortunately no, because these seem to only be available from mutual fund companies.

You do NOT have to have a securities license to sell an IRA, Roth IRA, a 401k plan, or to do retirement planning.
You DO need a securities license to do any buying, selling, holding, or analysis recommendations regarding securities.

However, just because you CAN do something, doesn't mean you know all the considerations into doing it in the first place.

Can a person contribute $5,500 to a traditional IRA and deduct the contribution from the current year's taxes? That depends.
1) How much income do they have? At higher income levels, the deduction phases out. You can still do a non-deductible traditional IRA contribution... did you know that? But you had better not co-mingle this IRA with other IRA balances.
2) Do they have a company retirement plan at work? This can limit or eliminate how much they can contribute.
3) What about their spouses? Can a contribution be made for them? That depends on the above two questions as well.

[EXTERNAL LINK] - Retirement topics - IRA contribution limits | Internal Revenue Service

Can you tell that the question has almost nothing to do with what to sell them or what you can sell them, but rather the rules and regulations behind the decision in the first place???

BTW, your compensation for the sale, implies that you have done this analysis before selling the product. If you haven't, or you didn't know what the factors are behind the sale... then I sure hope your E&O is paid up.


Some of these questions that have come up recently is, in my opinion, further proof that most people should get started in a CAPTIVE agency so they can learn what they CAN and CANNOT do. When you start out as an INDEPENDENT, you don't learn these things.

Also, I think it's a great idea that people who want to do this kind of business get securities licensed so they know what they can and cannot do with their licensing. In addition, obtaining professional designations will help with this learning curve.

PMG Power Blog: If You

----------

BTW, along these lines, Columbus Life has a great free Tax Reference App for your phone. It's a GREAT resource so you don't have to memorize everything. It's the only one I know of.

https://www.columbuslife.com/becomeaproducer/tax.php

What license do I need to start my own Meme Coin?

 

[sman]

What license do I need to start my own Meme Coin?

If Hawk Tuah girl can create a meme coin, then clearly no license is needed.

 

[DHK]

What license do I need to start my own Meme Coin?

A license for fraud?

 

[marindependent]

the Financial Reduction Assistance Underwriting Department license?