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Getting Started in Your Career Articles

Showing 10 of 86 Getting Started Articles

How to Become a Licensed Stockbroker

If you’re majoring in finance or a related degree, or you are working in the financial sector, you might be considering a career as a stockbroker. Buying and selling stock and other securities on behalf of clients is a rewarding and gratifying profession, but it requires at least two licenses. This article explains each stockbroker license and then walks you through the process of how to become a licensed stockbroker.

Stockbroker License Overview

Technically, there are only two licenses that are absolutely required for stockbrokers. However, your employer might require or recommend that you earn others as part of your responsibilities. Here’s a rundown of them all:

  • Series 7: Administered by FINRA and known as the general securities representative license, this authorizes you to sell virtually any type of individual security, such as preferred stocks, options, bonds, and other individual fixed income investments—plus all forms of packaged products. Basically, this license enables you to sell everything except commodities futures, real estate, and life insurance.
  • Series 63: Administered by NASAA, Series 63 is known as the Uniform Securities Agent license. Along with the Series 7 license, you must hold this license to do business as a stockbroker or sell mutual funds in many states.
  • Series 3: If your employer wants you to sell commodity futures contracts, you need this license, also administered by FINRA.
  • Series 31: To sell managed futures, which are pooled groups of commodities futures, you’ll need this license, an offshoot of the Series 3 license.
  • Series 65: Financial planners or advisors who work for an hourly fee rather than a commission and stockbrokers and other financial representatives who deal with managed-money accounts need this license. It’s also administered by NASAA.
  • Series 66: If you have a Series 7 license, you have already been tested on a good portion of the topics covered on the Series 65 exam. Therefore, Series 65 rolls Series 63 and Series 65 content into one license so you don’t have earn the others separately.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

The Steps to Becoming a Licensed Stockbroker Here’s what you need to do to become a licensed stockbroker:

  1. Sit for and pass the SIE exam. The SIE exam tests common topics such as fundamentals, regulatory agencies and their functions, product knowledge, and acceptable and unacceptable practices. You can take the SIE exam before being sponsored by a firm and even while you are still in school. Note that although you have to pass both the SIE and Series 7 exams to get your Series 7 license, you can take them in any order.
  2. Secure sponsorship with a licensed firm. Once you’ve passed the SIE exam and you’re employed, your firm must file a Uniform Application for Securities Industry Registration or Transfer, also known as Form U4, to enable you to earn your Series 7 license.
  3. Register for the Series 7 exam. Your sponsoring broker is required to file an application for you through FINRA’s CRD system. FINRA’s approval of that application opens a 120-day testing window. FINRA suggests you schedule your exam as far in advance as possible to ensure you get your desired date.
  4. Study for and pass the Series 7 exam. The Series 7 exam is not exactly a walk in the park. Study with purpose and planning. Exam preparation and review courses go a long way toward helping you pass your Series 7 exam the first time. The exam consists of 125 multiple-choice questions, and you have 3 hours and 45 minutes to complete it. The passing score is 72 percent.
  5. Register for the Series 63 exam. The Series 63 exam does not require member firm sponsorship. You can use Form U10 to apply for the Series 63 exam if you are not sponsored.
  6. Study for and pass the Series 63 exam. Prepare for the Series 63 exam in the same way you prepared for the Series 7 exam. Consider exam preparation and review packages to improve your chances of passing. The Series 63 has 65 questions and lasts for 75 minutes. The passing score is 73 percent.
  7. Register, study for, and pass additional exams. Either find out from your employer or decide for yourself any other licenses you need to earn, and then prepare for them like you did for Series 7 and Series 63.

Additional Tips for Success

If you want to become a licensed stockbroker, here are some extra tips to help you succeed:

  • If you are still in college or are about to enter college, consider majoring in financial planning, business, finance, economics, or accounting as an undergraduate and possibly continue these studies in graduate school.
  • Complete an internship. Many brokerage firms and investment banks accept summer interns. Internships help you understand the career and, in some cases, they can serve as an extended job interview.
  • Find a job in a brokerage, asset management firm, or bank. Because you can’t register for the Series 7 exam without a sponsor, you need to be employed before you take the exam.
  • Make sure you can pass a background check, which typically consists of a credit check and a criminal background search. Many employers will use these checks as a condition of employment.
  • As part of your study plan for each license exam and the SIE exam, take a practice exam after you’ve read the materials and answered practice questions. A practice exam closely replicates the degree of difficulty, weighting, and format of the real exam, and you receive a score with diagnostic feedback. The better you perform on a practice exam, the greater your likelihood of passing your licensing exams.
  • Stay calm on exam day. Plan to arrive at the testing center more than 30 minutes beforehand so that you have plenty of time to check in, find where you are supposed to go, and collect your thoughts. During the exam, take the questions one at a time and don’t look ahead to others or second-guess yourself.

Ready to Get Started on the Path to Becoming a Licensed Stockbroker?

Exam preparation packages for the SIE, Series 7, and Series 63 can help increase your odds of passing these critical exams on your way to becoming a licensed stockbroker.

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Posted by Kaplan Financial Education - March 20, 2020
Stockbroker license conceptual photo

Frequently Asked Questions About the Life Insurance License

To get your life insurance license, you must pass an exam and meet other requirements. The questions most frequently asked about life insurance licensing and the exam—such as license requirements, exam difficulty, passing score, pass rates, questions, and topics—are answered in this article. Read on to get information that can help you plan for a successful career as a life insurance agent.

How do I earn a life insurance license?

You need to be at least 18 years old to earn your life insurance license, and in some states, you’ll be earning a joint life and health insurance license. Here are the steps to follow:

  1. Complete any prelicensing education required by the state you want to become licensed in. The number of hours you’ll have to complete and the cost vary by state. Note: A few states do not require prelicensing education, so before you start the process for your state, check with the state’s insurance organization.
  2. Pass the state insurance licensing exam for life insurance or life and health insurance. A prelicensing exam preparation package can help.
  3. Pass a background check. The process varies by state and, in some cases, includes fingerprinting.

Thinking about a career in insurance? Download this free Launching Your Insurance Career eBook.

What is the difference between a life insurance license and a life and health insurance license?

A life insurance license permits you to sell annuities, term, and cash value (commonly called whole or universal) life insurance. A life and health insurance license enables you to sell these life insurance products, plus policies that provide protection for medical expenses, loss of income due to a disability, and the need for long-term care.

Some states, like Alabama and Florida, offer the options of earning a life insurance license, a health insurance license, and a life and health insurance license. Each of the three types require passing a separate exam. Others, like North Carolina, have separate licenses for life and health but not a combination, and each requires passing a separate exam. Still others, like Missouri, have a combined life and health insurance license only.

What jobs can I get with a life insurance license?

A life insurance license enables you to become a life insurance agent. Life insurance agents sell life insurance policies and annuities and work with clients and beneficiaries to process claims.

Life insurance agents do a lot of selling, so it’s important to be interested in marketing and have a knack for it. Excellent interpersonal and communication skills are also required because life insurance agents have to explain the ins and outs of all the products they sell in a way that is easy to understand. Life insurance agents can either be “captive” and work exclusively for one insurance company, or they can be “independent,” selling products from multiple companies.

How hard is the life insurance exam?

Each state has its own insurance exam, so the tests vary, making this question complicated to answer. However, the overarching topics covered on the exam, as well as the passing scores, are similar for all states. No matter where you take it, the test is not a walk in the park. But if you have a good understanding of the topics, you have a good chance of passing the life insurance exam.

What are the life insurance exam topics?

The life insurance exam tests you on specific topics, and these topics are weighted. These are the life insurance topics you are most likely to be tested on in most states:

  • Life insurance general knowledge
  • Life insurance policies
  • Policy riders and options in life insurance coverage
  • Life insurance tax issues
  • Annuities
  • Annuity policy tax issues

If you are taking a combined exam, there will be health insurance topics as well.

What are the requirements for taking the life insurance exam?

To take the life insurance exam, you must:

  1. Have a high school diploma or an equivalent.
  2. Know where you want to sell insurance and what the state requires. If it’s not the state where you currently reside, check to see if you are required to be a resident for a certain amount of time before taking the exam. The bodies of government that regulate insurance have different names, depending on the state, so a good way to find out is to go to the official website of the state and search for the insurance licensing rules.
  3. Meet the specific state exam requirements. In many states, you must complete a specified amount of prelicensing education hours. Visit the official website of the state insurance department or commission and search for the insurance licensing rules.
  4. Register for the exam, which includes paying a registration fee determined by each state.

When is the life insurance exam?

You can choose the date and time of your life insurance exam in most states. Scheduling options are usually on the respective state’s department of insurance website. To give yourself time to study, schedule your exam at least two weeks in advance.

Is the life insurance exam paper- or computer-based?

The life insurance exam is computer-based in all states.

How many questions are on the life insurance exam?

The life insurance exam consists of between 105–150 multiple-choice questions, depending on the state, and whether it is a separate exam or combined with health.

How much time does it take to study for the life insurance exam?

Most candidates study for the life insurance exam for about 35 to 40 hours.

How much does it cost to take the life insurance exam?

The cost to take the exam ranges from $43–$150, depending on your state. You can find the fee on your state’s insurance licensing website. Note that license application fees are separate.

What is the passing score for the life insurance exam?

The passing score is 70 percent in all states.

What is the passing rate for the life insurance exam?

According to a 2016 NAIC document, the passing rate is broad. The lowest passing rate was in Maryland at 40 percent, and the highest was in Wyoming at 87 percent. The majority of states recorded passing rates in the range of 60–67 percent.

How do I pass the life insurance exam?

Follow these steps to increase your chances of passing the exam:

  1. Learn your state’s requirements and get the exam outline. Check with the department of insurance in your state (or the state where you’ll be working) for the requirements and the outline and print it out.
  2. Have a study plan. Cramming for the life insurance exam is not recommended. Instead, have a realistic plan that spreads your study time over several weeks and is easy for you to stick to. A study package can help you stay on track so you don't cram at the last minute.
  3. Follow the state exam outline, which has a list of the topics that will be covered and how they are weighted.
  4. Prepare and practice. Review courses and reading can help you prepare. However, you should also take practice exams. These will help you determine how well you have absorbed the material and what still needs your attention.
  5. Know the exam center process. Visit the test center before the exam—see how long it takes to get there and get a feel for the testing area. Find out what forms of identification are needed.
  6. Stay calm while taking the exam. Read each question carefully and thoroughly before answering it. Find the questions you know the answer to, and answer them first. If you find yourself stuck on any question, move on and come back to it later.

If I fail the life insurance exam, what is the wait time before I can retake it?

You will find out if you passed or failed the exam at the testing center. However, you cannot register to take it again at that time. Instead, you must wait 24 hours before you can register again. You can take the exam three times in one year. If you fail it all three times, you will have to complete prelicensing education again before you can take it for a fourth time the following year.

Ready to Earn Your Life Insurance License?

We hope this article answers your pressing questions about the life insurance exam and license. If you’re interested in taking the exam, we have life and health exam preparation packages.

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Posted by Kaplan Financial Education - March 18, 2020
Life Insurance License questions on clipboard

How to Pass the CFP® Exam

How to pass the CFP® exam is a big concern for candidates who are planning to earn the CFP® mark. The exam is definitely a challenge and is different from many other financial exams. In 2019, the overall pass rate was 62 percent, and the pass rate for first-timers was 66 percent. In this article, you’ll learn about the exam and the steps you can take to pass. At the end, you’ll find additional tips you can apply throughout your preparation and on exam day.

About the CFP® Exam

The CFP® exam is a multiple-choice, computer-based exam. It is offered three times a year in March, July, and November at almost 50 locations nationwide, and it costs between $725–$925 USD (depending on when you register). The exam is given in a computer-based format and consists of 170 multiple-choice questions that test your financial planning knowledge in client situations. You are given the exam in two 3-hour sessions with a 40-minute scheduled break.

Follow these 5 steps to pass the CFP® exam.

1. Start studying early.

Getting CFP® exam-ready requires a major time commitment. CFP Board recommends you spend at least 250 hours studying for the exam. While that sounds overwhelming, the time goes pretty quickly between pre-study, the Candidate Handbook, required education courses, question bank time, review, practice exams, and your own preparations.

It’s important to think of preparing for the CFP® exam like training for a marathon. It’s not a situation where you can sprint (or cram). There’s just too much to learn, and you’ll need to be able to apply it to case studies. To be properly prepared for the exam, you need to have the space in your life to dedicate the necessary hours to study.

Preparing for the CFP® exam? Download this free eBook to learn how to create a CFP® exam study plan that works for you.

2. Create a strategic and efficient study plan.

Given the hours and the amount of material to master, you should create a strategic study plan. Spending too much or too little time on any one activity can be detrimental to your preparation. Therefore, devising a study plan based on how CFP Board weights the exam topics is a good plan of action. The topics and their weights are:

  • Professional conduct and regulation—7%
  • General principles of financial planning—17%
  • Education planning—6%
  • Risk management and insurance planning—12%
  • Investment planning—17% Tax planning—12%
  • Retirement savings and income planning—17%
  • Estate planning—12%

You should learn the basics of each category first and then work deeper into the categories based on weight and your familiarity. This will enable you to absorb more detail and application.

3. Focus on learning how to apply what you know.

The CFP® exam is all about applying knowledge to real situations you could encounter on the job. There are two important case studies worth 20 percent of the exam. You must analyze a hypothetical client situation and determine the best next steps. Memorization alone won’t cut it in this section. Mastery of the material is important. But to do well, you must apply your knowledge to the given client information.

4. Practice, practice, practice.

Because the CFP® exam tests how you apply what you’ve learned in readings and classes, it is vital that you practice what you learn. You should answer the questions at the end of the chapters you read and take question bank quizzes and practice exams. The more you practice, the more familiar you will become with how to apply your knowledge. Exam prep providers and CFP Board offer practice exams you can take before your exam day.

5. Stay calm as exam day approaches.

Try to be at your mental peak for the exam. Use the day before the exam to reread some of the more wordy areas of the curriculum, like Ethics. Studying too hard or taking full practice exams the day before can mentally drain you. Few people sleep well the night before the exam, so make sure you get into a good sleep pattern leading up to it. A week of 7–8 hours of sleep each night, along with some exercise and relaxation, will help you get through exam day in good form.

Additional Tips on How to Pass the CFP® Exam

Here are a few tips and tricks that can also help you pass the exam:

  • Focus on learning, not memorizing. The CFP® exam is all about how you handle real situations you could encounter on the job.
  • Work with practice questions that have the same difficulty level as the actual exam. This can help you determine if you have truly mastered a particular domain and where you might be making mistakes.
  • Don’t feverishly go over lists or answer tons of practice questions on the day before the exam. Instead, think about answering financial planning questions clients might ask. Then, stop about dinner time, just as if you were already in the office, relax, and have a good meal.
  • Picture yourself doing well on the exam. Before a big exam like this, it’s natural to panic and worry about failing. Instead, visualize yourself answering questions competently and getting a great score. Positive affirmation can calm your nerves and put you in the right mindset.

Taking the CFP® Exam?

Increase your chances of passing. Choose a CFP® exam prep package that suits your study needs today.

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Posted by Kaplan Financial Education - February 27, 2020
How to pass the CFP exam - students practicing

What Is a Registered Representative?

“Registered representative” is a term that describes someone who is licensed to buy and sell securities for clients and is sponsored by a firm registered with the Financial Industry Regulatory Authority (FINRA). Registered representatives are more commonly referred to as stockbrokers. This article explains what a registered representative does and details the difference between an investment adviser representative and a registered representative. You'll also learn the steps you need to take to become a registered representative.

What a Registered Representative Does

Registered representatives represent clients in the trading of investment products such as stocks, bonds, and mutual funds. Many handle complicated trades or complex products that are outside the capabilities of online trading. Well-versed in the markets, they search for the best securities and prices possible so they can advise clients on what to buy and sell, as well as the best times to trade. In return, they receive either a flat fee or a percentage of the transaction value as a commission. Therefore, a registered representative is adept at sales and working with people.

Registered representatives must follow standards and rules set by FINRA and the SEC, as well as the suitability standard. The suitability standard requires that a registered representative recommend only the securities that meet client requirements and goals and complement their portfolios. However, if a registered representative finds an investment product that will make the client money, they can recommend a trade, even if it doesn’t meet the client’s financial goals or appetite for risk.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

Registered Representative vs. Investment Adviser Representative

An investment adviser representative (IAR) is an individual who works for an investment advisory company or firm and provides investment-related advice for a fee. The advice IARs can provide is based on the licenses they hold. IARs are usually asset managers, investment counselors, investment managers, portfolio managers, and wealth managers. Many have Series 65 licenses.

By contrast, registered representatives work with broker-dealers or brokerage firms, buying and selling securities stocks, bonds, mutual funds and certain other investment products on behalf of customers or for their firm’s own accounts, or both. The securities licenses most commonly associated with registered representatives are Series 7 and Series 63.

How to Become a Registered Representative

Here are the steps to becoming a registered representative:

  1. Sit for and pass the SIE exam. This exam, which tests security industry essential concepts, gets you started on the path to earning your Series 7 and Series 63 licenses.
  2. Secure employment with and sponsorship from a FINRA-licensed firm.
  3. Register and prepare for the Series 7 exam. Your sponsoring broker is required to file an application for you through FINRA’s CRD system. FINRA’s approval of that application opens a 120-day testing window. You should schedule your exam as far in advance as possible to ensure adequate preparation time and to get your desired date.
  4. Sit for and pass the Series 7 exam.
  5. Register for, prepare for, sit for, and pass the Series 63 exam.

After you complete these steps, you will be licensed and sponsored to buy and trade securities for individual clients, your firm, or both.

Thinking of Becoming a Registered Representative?

A career as a registered representative is hard work, but it is satisfying and rewarding. Sitting for the SIE exam is a great way to start, and SIE exam preparation packages can increase your chances of passing. Another option is to enroll in an SIE and Series 7 exam preparation bundle, which will ultimately save you money in the long run.

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Posted by Kaplan Financial Education - February 24, 2020
Registered representatives at work

How to Sell Insurance

How to sell insurance is top of mind for anyone who is considering this rewarding career. Insurance sales requires hard work, determination, networking, marketing, followup, and a genuine interest in people’s lives, plans, and future. It means working on commission (in most cases) and having at least one insurance license. This article describes the steps to follow for selling insurance.

1. Decide what type of insurance to sell and earn your license.

Insurance sales is a broad category, and one insurance license doesn’t cover all the different types. So, you should choose what kind of insurance you’d like to sell. The common options are life, health, property, and casualty insurance. Two other types that are fairly common are surplus line insurance, which covers unusual situations with risks not addressed by standard insurance, and variable products insurance, which have an investment element.

To earn an insurance license for everything except variable products insurance (you need a FINRA Series 6 license for that), you need to be at least 18 years old. You will have to pass an exam administered by the state where you want to sell insurance. Many states require you to complete prelicensing education before taking the exam. You must also pass a background check that can include fingerprinting.

Thinking about a career in insurance? Download this free Launching Your Insurance Career eBook.

2. Choose how you want to sell insurance.

There are two ways you can sell insurance after you earn your license. You can be a “captive” or an independent agent. Captive agents work for a specific insurance carrier and can only sell its insurance products to prospects and clients. Typically, their office expenses are paid for, and they receive benefits and continuing education training.

Independent agents work for themselves and sell the products of different insurers. They use their own resources to start and market their business, but they typically earn larger commissions than captive agents. By offering products from different carriers, they can tailor solutions specifically for their prospects and clients.

3. Generate leads.

After earning your license and choosing how you want to sell insurance, you’re ready to start selling. You know you need to help clients understand differences in insurance policies so they can choose the plan that’s right for them, but first you need to get those clients. So, how do you do that? You will have to generate leads.

If you’re working as a captive agent, your employer may provide you with leads, usually by selling them to you. If you’re working independently, you will need to generate leads in other ways. Many independent agents purchase lists and some even engage insurance marketing organizations or field marketing organizations to help them with marketing and lead generation.

Even with help from another party, it’s always a good policy to make sure you also get leads the old-fashioned way—by networking and using referrals. Encourage family and friends to refer you. Participate in insurance and other community events to get the word out that you’re an insurance agent. Remember to create a website and profiles on Facebook, LinkedIn, Twitter, Instagram, and Snapchat and keep up with them regularly, engaging as much as you can.

4. Make your pitch.

Selling insurance to your leads is all about the pitch. You need to present yourself well, speak in the language your prospects understand (no slang or jargon), and demonstrate empathy with their situations. When you put yourself in their shoes, you can better explain how your insurance products will benefit them.

Potential clients are looking for a solution and benefits, not a list of features. Therefore, you should examine and understand how the features you offer solve problems so you can make appropriate solution recommendations. This is called solution selling, and it is more effective than just listing features like a 24x7 helpline or a one-click accounting report.

Many leads might think they don’t need insurance or are reluctant to commit to the best policy, fearing the cost. Or, they might be required by a bank or law to purchase insurance and want the lowest-price option. In those cases, you should ask questions that will get them to focus on what could happen without the proper amount or type of insurance:

  • What’s the most valuable thing in your house?
  • What happens if it is stolen?
  • What kind of serious weather events—such as floods, hurricanes, blizzards, or storms—have happened near your house?
  • If you passed away, how long would your family be able to live on your savings?
  • How much do you think a funeral costs?
  • What would happen to your job if you were permanently injured?
  • If you’re injured or hospitalized for a long period of time, how would you and your family be supported?

After you get answers to those questions, you can explain how the insurance solutions you provide can help them safeguard for those situations.

Step 5. Follow these tips.

Here are some additional tips that can help you get new clients and keep them:

  • Create sales goals to keep you on track throughout the year.
  • Find something in common with prospects and clients to put them (and yourself) at ease.
  • Find opportunities to learn from experienced coworkers or, if you’re independent, from other independent agents.
  • Keep up with the markets and insurance trends so you can introduce new solutions to prospects and existing clients.
  • Listen to your prospects and clients more than you talk to them.
  • Never miss an opportunity to network.
  • Partner with other professionals, like lawyers and accountants, who can answer client questions that you can’t. Then, offer to answer insurance questions that they can’t as a way to get referrals.

Think Selling Insurance Is Right for You?

If you’re excited about helping people plan for the future with the right insurance products, your first step is earning your license. Exam preparation packages can help increase your chances of passing, so you can start your exciting new career.

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Posted by Kaplan Financial Education - February 18, 2020
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How Much Money Do Financial Advisors Make?

What kind of salary can you earn as a financial advisor? PayScale lists the salary range for financial advisors as $36,000–100,000 per year; however, the earning potential over time is even greater than that. Why the big range? It all comes down to what kind of financial advisor you are. Here are some examples.

Stockbroker Salary (Registered Representative Salary)

Stockbrokers, which FINRA calls registered representatives, are financial advisors who work at brokerages, managing the financial portfolios of individuals or corporate clients. According to the U.S. Bureau of Labor Statistics (BLS), the median salary in 2018 for a stockbroker was $64,120 per year. However, because stockbroker pay is commission-based (after a certain sales threshold), they have the opportunity to earn much more than that. According to the Street, the median pay for the top 10 percent of all stockbrokers in the U.S. is $208,000.

If you’re interested in becoming a stockbroker or registered representative, you’ll need to earn securities licenses from FINRA. These include the Series 7 and Series 63 licenses.

Considering a career in securities? Download the free Launching Your Securities Career eBook.

Investment Advisor Salary

Working for a financial investment firm, financial planning firms, or themselves, investment advisors determine the best investments for a client’s portfolio. According to Payscale, the average annual salary of an investment advisor is $70,797. However, like that of stockbrokers, investment advisor pay can include commissions and profit-sharing, increasing the annual salary. For example, in Chicago, the salary plus commissions and other add-ons can average $234,700, according to a 2018 CFA Society Chicago report.

If becoming an investment advisor appeals to you, you’ll need a Series 65 license, which enables you to work with clients as an Investment Advisor Representative.

Financial Planner Salary

“Financial planner” is a broad term for a type of financial advisor who helps individuals and corporations meet their long-term financial objectives. They generally charge their clients a percentage of the assets they manage. They may also charge an hourly fee or get fees for stock and online insurance policies purchased. Those who help individuals with planning are referred to as “personal financial advisors.” Many of these financial planners are certified CFP® professionals.

According to ZipRecruiter, the median pay for a professional with the CFP® certification is $85,449 annually, topping out at $149,500. The U.S. BLS states that the median pay for a professional under the larger umbrella of personal financial advisors is $88,890 annually, and Payscale adds that, at the high end of the scale, the salary is $122,000.

Wealth Manager Salary

A wealth manager is a type of financial advisor who consults with high-net-worth clients to achieve their goals related to wealth accumulation, protection, and distribution. High-net-worth clients generally refer to those worth $1 million or above, although some firms only serve clients worth at least $5–10 million. Salary.com estimates that the average salary range for wealth managers is $63,975–93,420 annually. However, wealth managers have the potential to earn much more, especially as they gain experience or if they work for major broker-dealers. According to a number of articles, wealth managers in that category can bring home $2 million annually.

Designations offered in wealth management are many and varied. Examples include Wealth Management SpecialistSM, Accredited Portfolio Management AdvisorSM, the CFP® certification, and the CFA® charter. If wealth managers are providing investment advice or selling securities, they will also need (at minimum) Series 65, Series 6, and Series 7 licenses.

Interested in Making Money as a Financial Advisor?

If you put in the time and hard work to earn your securities licenses or CFP® certification, you increase your odds of earning a top salary as a financial advisor. Securities prelicensing exam preparation packages and CFP® education help increase your odds of earning the licenses and certification that can get you started on the path to financial success.

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Posted by Kaplan Financial Education - January 30, 2020
Financial advisor salary calculated by woman

What Is an Insurance Producer?

An insurance producer sells insurance products to clients on behalf of an insurance company. It is a rewarding career with amazing growth potential. Becoming an insurance producer is also a great way to get started in finance or to make a much-needed career change. This article explains what an insurance producer does, shows you the differences between an insurance producer, agent, and broker, and describes how you can become a producer.

What an Insurance Producer Does

Insurance producers are licensed to sell and negotiate life, health, property, or other types of insurance offered by an insurance company. As an insurance producer, you may work for one insurance company only or represent multiple carriers.

Being a producer includes finding new clients and maintaining relationships with those you already have. Insurance producers need to be a reliable first point of contact when a client needs to file a claim or increase coverage due to major life events, like purchasing a new car or having a child. Other responsibilities include:

  • Calculating premiums and establishing payment methods
  • Monitoring insurance claims and helping clients settle them
  • Fulfilling all policy requirements
  • Customizing insurance programs to suit individual customer needs
  • Inspecting property to examine its overall condition and decide its insurance risk
  • Acting as an intermediary between a customer and the insurance company

Thinking about a career in insurance? Download this free Launching Your Insurance Career eBook.

What’s the Difference Between an Insurance Producer and an Insurance Agent?

There is no difference. The two terms are used interchangeably to describe selling insurance on behalf of a company or multiple carriers. “Insurance agent” is the term used most often in the industry, but “insurance producer” is often the official title that states use for licensing. No matter which term you use, you will have the same responsibilities.

What’s the Difference Between an Insurance Producer and an Insurance Broker?

Insurance producers or agents represent insurance companies. By contrast, insurance brokers represent insurance buyers. In other words, producers look for clients who will buy insurance products, while brokers look for insurance products that will meet their clients’ needs. In addition, an insurance producer can bind a client to a policy whereas an insurance broker cannot. Once a broker has found a product for a buyer, a producer must complete the transaction.

How to Become an Insurance Producer

Before you can become an insurance producer (or agent), you must have a high school diploma and be 18 years of age or older. If you meet these requirements, here are your next steps:

  1. Decide what kind of insurance you want to sell. Examples include life and health, property and casualty, auto, and workers’ compensation.
  2. Learn your state’s prelicensing requirements. Many states require you to complete a specific number of hours of prelicensing education for each type of insurance.
  3. Pass your state’s insurance licensing exam.

You can get all the details on these steps in this article.

Ready to Get Started?

If a career as an insurance producer or agent is appealing to you, you can learn more about the job in this article. Or, if you’ve decided to take the exam and earn your license, prelicensing exam preparation and education can help.

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Posted by Kaplan Financial Education - January 13, 2020
Insurance Producer Concept

Popular Careers in the Insurance Industry: What You Can Do with Your License

What are the most popular insurance careers? If you’re getting ready to graduate or you’re considering a more exciting career alternative, you might be wondering what you can do if you earn your insurance license. To help you decide which license to earn and how to use it, this article describes the most popular types of insurance agents and other top jobs you can get with an insurance license.

Life Insurance Agent: One of the Most Popular Insurance Careers

Life insurance agents sell life insurance policies and annuities and work with clients and beneficiaries to process insurance claims. Life insurance agents do a lot of selling, so it’s important to be interested in marketing and have a knack for it. Excellent interpersonal and communication skills are also required because life insurance agents have to explain the ins and outs of all the products they sell in a way that is easy to understand. Life insurance agents can either be “captive” and work exclusively for one insurance company, or they can be “independent,” selling products from multiple companies.

To earn a license to sell life insurance, you might need need to complete prelicensing education for the state where you plan to work (26 states require prelicensing education). You must also pass either a life insurance or a life and health insurance exam. Agent pay is on commission. The average salary for a life insurance agent as of November 2019 was $79,606. You can learn more about this popular option for people with insurance licenses in this article about what a life insurance agent does.

Thinking about a career in insurance? Get advice from 100 insurance professionals in our free eBook, Launching Your Insurance Career.

Health Insurance Agent: Helping Clients Get Healthcare

Health insurance agents sell health-related products and insurance to their clients. Typically, these agents look for clients, share options that meet their requirements, and, when necessary, help them get their claims settled. Health insurance agents can also help people navigate healthcare exchanges and sign up for the coverage that best suits their needs and budget. They must have strong customer service and analytical skills, and they must excel at verbal and written communication, time management, critical thinking, and decision-making. Like life insurance agents, health insurance agents can be captive or independent.

In almost all U.S states, health insurance agent licenses are packaged with life insurance qualifications. You must complete prelicensing education and pass a combined life and health insurance exam to earn your license. The average salary for a health insurance agent as of November 2019 was $55,839. Agents are paid by commission.

Property and Casualty Insurance Agent: A Great Entry-Level Choice

Property and casualty insurance agents help clients insure property, such as auto, home, and jewelry, against possible damage or legal liability, and they help them settle their claims. These agents navigate clients through all the available property and casualty insurance products to help them decide the best way to protect their valuable assets. All states require licensed drivers to carry auto insurance, and mortgage loan companies require homeowners insurance, so there will always be buyers. This makes property and casualty a good entry-level position for a newly licensed agent. Like life insurance and health insurance agents, property and casualty insurance agents can be captive or independent.

To earn a property and casualty insurance license, completing prelicensing education and passing a licensing exam for your state (or the state where you plan to sell) are required. The average salary for a property and casualty insurance agent as of November 2019 was $48,723.

Claims Adjuster: An Investigative Insurance Career

Claims adjusters gather information about what happened in an incident or catastrophe to find a fair settlement price. They collect police reports, witness statements, and photos of an incident or property damage, for example. Adjusters are either full-time employees or contractors who are paid a fee. Some work for only one insurance company. Others work with multiple companies (usually after a catastrophe, often traveling to affected areas). And there are others who work on behalf of policyholders, helping them file insurance claims if a proposed settlement seems unfit from an insurer.

Most states require adjusters to earn a license. They can do this by completing licensing education and passing an exam. The average salary for a claims adjuster as of November 2019 was $54,479. This article explains everything you need to do to become a claims adjuster.

Insurance Underwriter: A Different Insurance Career Path

An insurance underwriter evaluates insurance applications in order to decide whether to provide the insurance and, if so, the coverage amounts and premiums. Underwriters act as go-betweens for insurance agents who are eager to sell a policy and insurance companies who want to minimize risk. For someone with an interest in finance or insurance, an eye for detail, and decision-making skills, it is an attractive career option.

Unlike most other insurance careers, an underwriter does not have to be licensed. However, most participate in underwriting professional development to sharpen their skills and knowledge. Others have found that having an insurance license in the same specialty as their underwriting, such as life or property and casualty, can be beneficial. The average salary for an insurance underwriter as of November 2019 was $71,116. You can get all the details about the insurance underwriting career in this article.

Insurance Careers Are Rewarding and Satisfying

There are a variety of career paths you can take in the insurance industry, depending on your interests and qualifications. Start your new career by downloading this free eBook on launching your insurance career or by checking out our insurance licensing education options.

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Posted by Kaplan Financial Education - November 22, 2019
Insurance Careers - Smiling Agent

AAMS® vs. CFP® Mark: Which Designation Is Right for Me?

A special designation in financial planning can set you apart from the competition and boost your career. But should you earn the AAMS® or the CFP® mark? Both lead to rewarding, professional opportunities for those who want a career in personal finance and planning, but the topics they cover, their requirements, and their benefits are slightly different. In this article, we compare the AAMS® vs. CFP® mark to help you choose the credential that’s right for you.

AAMS® Designation Overview

The Accredited Asset Management SpecialistSM (AAMS®) program provides advisors with fundamental financial knowledge of asset management and investments. Offered exclusively online by the College for Financial Planning®—a Kaplan company (CFFP), the AAMS® credential and program are designed to help personal financial advisors who are just starting out in their careers. However, more experienced financial advisors can benefit from the credential, too, because it lets clients know they have a specialty in asset management.

Get more details in this AAMS® designation article.

Requirements for Earning the AAMS® Designation

To earn the AAMS® designation, follow these steps:

  1. Complete a 10-module education program provided by CFFP. There are no prerequisites for this program, which typically takes 9–11 weeks to complete. The modules cover the asset management process; risk, return, and investment performance; asset allocation and selection; investment strategies; taxation of investments; investing for retirement; deferred compensation and benefit plans; insurance products for investment clients; estate planning for investment clients; and fiduciary, regulatory, and ethical issues for advisors.
  2. Take and pass the AAMS® exam. You must take the test for the first time within six months of enrolling for the program, and you have a year to pass it. There are 80 questions on the exam, and the passing score is 70 percent. Plan on studying for about 80–100 hours.
  3. Agree to abide by a code of ethics.

AAMS® Benefits

The AAMS® designation is recognized as the industry benchmark for asset management credentials and is endorsed by leading financial firms. Compared to earning an MBA or other credentials, the AAMS® designation is a relatively low-cost ($1,300) way to advance your career and lets clients know you have deep knowledge in asset management and investments. Financial advisors with the AAMS® credential report an average earnings increase of 20 percent, as well as client-base growth and greater job satisfaction.

CFP® Certification Overview

The CERTIFIED FINANCIAL PLANNER (CFP®) mark enables finance professionals to help individual clients create comprehensive plans for meeting their long-term financial goals, such as retirement, college tuition, business start-up, a home, and so on. Its governing body, CFP Board, administers the credential. In 2017, CNN Money reported that jobs for CFP® professionals are expected to grow 30 percent over the next 10 years, making it an excellent career option for young financial professionals.

Requirements for Earning the CFP® Mark

The requirements for earning CFP® certification are:

  • Complete a CFP Board-registered education program. CFP Board must be notified when you’ve completed it.
  • Pass the CFP® exam. Offered three times a year in March, July, and November, the CFP® exam focuses on testing your financial planning knowledge in client situations. The topics covered include professional conduct and regulation, general financial planning principles, education planning, risk management and insurance planning, investment planning, tax planning, retirement savings and income planning, and estate planning. You should plan to spend 250 hours studying for the six-hour, 170-question, computer-based exam. This exam FAQ has more details.
  • Hold a bachelor’s degree from an accredited university or college. You can hold the degree before you complete the education program and pass the exam or earn it afterward. (You have up to five years after passing to get your degree.)
  • Have financial planning experience. This can be 6,000 hours of full-time, relevant personal financial planning or 4,000 hours of apprenticeship.
  • Pass the CFP Board candidate fitness standards. To do this, you must agree to adhere to CFP Board’s ethical standards, disclose any criminal or employment termination history, and pass a background check.

For all the details about how to become a CFP® professional, check out this article.

CFP® Certification Benefits

Like the AAMS® designation, the benefits of earning the CFP® mark include a rewarding career that involves a relatively low investment ($7,000 for the course work plus exam fees) compared to the tuition for an MBA or other credentials. The most common careers include financial planner, wealth advisor, estate planning specialist, trading and research associate, financial consultant, financial representative, or financial analyst. If you want to become a branch manager at a financial firm, CFP® certification can help you achieve that level in your organization as well.

AAMS® vs. CFP® Mark: How to Choose

The AAMS® designation is respected as an achievement milestone. If you would like to quickly earn a credential to demonstrate your asset investment expertise to clients and employers, the AAMS® program takes less than three months to complete. If you are in training to become a personal financial planner, earning your AAMS® can put you on the path to an entry-level position.

The CFP® mark is highly respected in the industry, and it can open many doors for you in your career. Firms know that CFP® professionals are preferred by clients. In fact, a recent CFP Board study revealed that 69 percent of surveyed consumers said they would insist that their financial planners have the CFP® certification. As a result, many companies will offer financial assistance to employees interested in earning the CFP® mark.

As you ponder the benefits of each, ask yourself what your long-term goals are. If you would like to get a headstart in your financial planning career, earning the AAMS® designation is a good option. If your dream is to work in a large firm where you can apply personal financial planning knowledge and skills more broadly—and you have the time to invest in an intense program—the CFP® mark is an excellent choice.

Who Says You Have to Decide?

There is a third option: earning both the AAMS® and the CFP® mark. Many financial planners and advisors start with the AAMS® designation. Then, after gaining experience in the field, they enroll in the CFP® program and earn that credential. In fact, AAMS® designees receive credit for the completion of FP511 in the CFFP CFP® certification education program. This allows you to save both time and money.

Performing well in the AAMS® designation program and on the exam also increases your odds of passing the CFP® exam. A study by CFFP that was submitted to the 2019 Annual Meeting Academy of Financial Services shows that students who did well (either an A or B grade) in the AAMS® program had a good chance of doing well in the CFP® program. Testing out of two courses offered by CFFP and performing better in the CFP® program are two powerful arguments for earning your AAMS® before your CFP® mark.

Ready to Get Started?

Get your financial planning career on the right track. Learn more about our CFP® certification packages here, or explore the AAMS® program here.

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Posted by Kaplan Financial Education - November 18, 2019
AAMS vs CFP - Woman Trying to Decide

What is the SIE Exam Passing Rate?

If you’re taking the FINRA Securities Industry Essentials (SIE) exam, you might be wondering about the passing rate. And you probably want to know how hard the exam is. Although more than three-quarters of those who sit for the SIE exam end up passing it, it’s still challenging. Let’s take a look at the data and then see what you can do to increase your chances of passing.

SIE Exam Passing Rate

You need a score of 70% or better to pass the SIE. As of August 31, 2019, the overall passing rate of the SIE exam was 82% out of 67,445 exams administered. Of the 58,264 candidates who were taking it for the first time, the pass rate was 74%. The rates for those taking the SIE with the Series 6, Series 7, and Series 79 exam were as follows:

  • SIE and Series 6: 80%
  • SIE and Series 7: 84%
  • SIE and Series 79: 96%

Thinking about taking the SIE exam? Our free Candidate's Complete Guide to the SIE Exam is packed with useful information.

How Hard Is the SIE Exam?

The SIE exam is not easy. You should be prepared for a challenge. You are expected to know about capital markets, securities products, and regulations, as well as how to trade securities and what products are prohibited.

Although the exam requires some math and a few calculations, mostly you are being tested on how well you read the exam questions and your understanding of finance and securities concepts. Knowing definitions will not be enough. You should also be prepared for one word being used to mean different things and, conversely, several different words being used to mean the same thing. For examples and more details, read our article on frequently encountered SIE exam roadblocks.

Despite the challenges, you can be part of the 82% passing rate if you know the topics and prepare properly.

SIE Exam Questions and Topics

The SIE exam consists of 75 multiple-choice questions plus 10 unscored questions, and you have an hour and 45 minutes to complete it. The topics and the number of questions assigned each are:

  1. Knowledge of Capital Markets: 12 (16% of the exam)
  2. Understanding Products and their Risks: 33 (44% of the exam)
  3. Understanding Trading, Customer Accounts, and Prohibited Activities: 23 (31% of the exam)
  4. Overview of the Regulatory Framework: 7 (9% of the exam)

As you can see, the second and third sections make up 75% of the exam, so you need to do well on both those sections. But don’t overlook the other two. They are important because you will need to know how to apply those concepts in future securities licensing exams.

SIE Exam Study Tips—How to Increase Your Odds of Passing

These tips will help you develop the knowledge and confidence necessary to increase your odds of passing:

  • Layout a study plan. Use the SIE Exam Content Outline from FINRA as a starting point. An SIE exam prep package is even more helpful for developing your study plan and determining how many hours to study. Because the SIE exam was just implemented in October 2018, guidance on how many hours of study to put in varies widely. Some say 20 hours. Others say 100-150 hours. Kaplan advises no less than 50 hours, and you should add more hours if you don’t have a financial background.
  • Develop a steady, regular study routine. A routine can increase your retention dramatically. Balance your studying between reading and practicing with breaks in between that enable concepts (and how to apply them) to percolate. Relying solely on frantic cramming a few days before the exam is not recommended because you aren’t tested on memorization.
  • Be sure you have a thorough understanding of finance and the markets, and are keeping up with trends. Take some extra study time to listen to podcasts or youtube videos about investing. Subscribe to updates from financial news sources online. Visit online discussions of finance, the stock market, and securities on quora and reddit. Build your confidence by answering practice questions and taking practice exams.
  • Practice questions and exams enable you to assess how well you understand and apply critical concepts. You’ll be able to address weaknesses and become accustomed to the kinds of questions you’ll be asked on the exam.

Ready for the Challenge?

If you’re interested in taking the exam, check out our SIE exam preparation packages. You can also find answers to the most commonly asked questions about the exam in this SIE FAQ.

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Posted by Kaplan Financial Education - October 16, 2019
SIE Exam Passing Rate Celebrated by 4 Students

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