Posted by: Kaplan Financial Education
Published: April 9, 2019
The questions most frequently asked about the Series 6 top-off exam and license are answered in this article, equipping you with the information you need to plan for this next step in your career.
The Series 6 license (also known as the Investment Company/Variable Contracts Products license) enables you to register as a company's representative and sell mutual funds, variable annuities, and insurance.
Administered by FINRA, the Series 6 license is good for the entire period that you work for a FINRA-member firm or self-regulatory organization (SRO). It only expires if you are terminated or leave a firm and do not find employment within two years at another FINRA-member firm or SRO. You do have to maintain it with continuing education, however. FINRA explains this in an article about firm and regulatory requirements.
If you hold a Series 6 license, you’re called a limited representative, and you can sell mutual funds, variable annuities, and insurance premiums. By contrast, the Series 7 license enables you to sell corporate stocks and bonds, municipal bonds, mutual funds, variable annuities, options, direct participation program partnerships, collateralized mortgage obligations, and more. A Series 6 license is more restrictive in terms of what you can sell compared to a Series 7 license, which permits you to sell most securities except commodities futures, real estate, and life insurance. Both serve specific needs and are appropriate to financial professionals who want to offer certain capabilities to their clients.
If you’re interested in providing investment advice, retirement-planning services, and other types of financial guidance to clients. or you want a career in insurance or mutual fund sales, this is a good license to have. Officially listed as Investment Company Products/Variable Contracts Limited Representatives by FINRA, Series 6 license holders are usually financial advisers or insurance agents who also sell mutual funds; they work in brokerages, investment firms, banks, and insurance companies. In fact, you need to be employed by a sponsoring FINRA-member firm before you can sit for the Series 6 exam.
Earning a Series 6 license involves four key steps:
As part of implementing the Securities Industry Essentials (SIE) exam, FINRA restructured their examination programs. FINRA is the governing body that ensures that anyone who sells securities products is qualified and tested. As part of this restructuring, FINRA created a tailored top-off examination for earning the Series 6 license.
You should take the Series 6 top-off exam if you want to be licensed to sell mutual funds, variable annuities, and insurance.
To take the Series 6 exam, you need a FINRA-member firm or SRO to sponsor you. After you’ve worked for them for four months or more, they can file a Form U4 (Uniform Application for Securities Industry Registration), which registers you for the exam. Fortunately, most firms that hire or train you will have a mandatory Series 6 licensing program included in their training package.
There are no education requirements to sit for the Series 6 exam, although most candidates have a college degree in a finance-related field, and many choose to complete a Series 6 exam prep package prior to sitting for the exam.
Yes, although the more natural progression is to take the SIE exam first, mainly because you don’t have to be sponsored to take it, and it is a more general exam that covers securities concepts. The SIE exam and Series 6 top-off exams are “co-requisites,” which means you can take and pass them in any order. Of course, you have to pass both to earn your Series 6 license.
It depends on the license. You might not need the Series 6 if you have a Series 7 license and you don’t plan to sell life insurance. If you have a Series 3 license and decide to stop selling commodity futures in favor of mutual funds, you’ll need to earn the Series 6. You should consult with your firm before deciding whether you need a license or not.
Like all other securities qualification exams, the Series 6 exam is administered by computer at a Prometric testing center.
The Series 6 exam topics include mutual funds, variable annuities, securities and tax regulations, retirement plans, and insurance products. The focus of the exam is the day-to-day activities, responsibilities, and job functions related to selling and purchasing these products.
The exam consists of 50 multiple-choice questions, and each question has four answer choices. There are also five additional unidentified and unscored pretest questions that do not contribute to your score that are randomly distributed throughout the exam.
|% of Exam||# of Exam Questions|
|1 - Seeks business for the broker-dealer from customers and potential customers||24%||12|
|2 - Opens accounts after obtaining and evaluating customers’ financial profile and investment objectives||16%||8|
|3 - Provides customers with information about investments, makes suitable recommendations, transfers assets, and maintains appropriate records||50%||25|
|4 - Obtains and verifies customers’ purchase and sales instructions; processes, completes, and confirms transactions||10%||5|
Most candidates spend 40 to 60 hours studying for the FINRA Series 6 exam.
The Series 6 top-off exam expects candidates to be able to apply their knowledge to specific scenarios. The questions are detailed and related to the day-to-day activities, responsibilities, and job functions of limited representatives. Therefore, candidates should expect it to be challenging but quite passable with dedicated and focused preparation.
The exam cost is $40.
The passing score for the exam is 70%. Because the Series 6 top-off exam just went live in October 2018, a pass rate has not been announced. However, in our most recent customer surveys, 90% of respondents have reported passing the Series 6 exam after using Kaplan prep materials.
Candidates who do not pass the top-off exam must wait 30 days before taking it again. However, if you fail it three times in succession, you must wait 180 days. Your firm will also have to sponsor you again for each retake, and you will also have to pay the full fee each time.
We hope this article answers your pressing questions about the Series 6 top-off exam and license. If you’re interested in taking the exam, we have Series 6 exam preparation packages. Or if you’re just getting started, check out our SIE packages and our SIE and Series 6 combo series.
After identifying nine series exams with common content (6, 7, 22, 57, 79, 82, 86/87, 99), FINRA has decided to restructure their licensing process next year. The common content will be tested in the new Securities Industry Essentials (SIE) exam. Download this free guide to learn more about how the new securities licensing process will work, the rationale for the change, proposed SIE exam content, and how it could change hiring and recruiting practices.