Investment Broker Licensing Key Terms

Find out about FINRA and NCFE investment broker requirements

By Sandy Baker

Investment broker licensing is required of all who plan to sell investments in the United States. There are several licensing options, depending on the type of investments an individual wishes to sell. Many brokers will work through several exams including the Series 7 license, the Series 24 license and the Series 6 license. The FINRA and NCFE are regulatory bodies that approve preparatory courses, exams and licenses in this industry. There are several terms that can become confusing in the investment broker industry.

Series 7 license

The Series 7 license is required for those who wish to become general securities representatives. Individuals must complete a course to learn about retirement plans, taxation, equity security investment, options and derivatives and securities markets. The licensing exam is six hours in length and is administered by the Financial Industry Regulatory Authority.
Try: Visit American Investment Training to learn more about the Series 7 license.

FINRA

The FINRA, or Financial Industry Regulatory Authority, is the non-governmental body that regulates U.S.-based security firms. The group oversees more than 5,000 brokerage firms and 656,000 registered securities representatives. Those wishing to obtain a license to become an investment broker must take FINRA approved courses and sit for the exam designed by FINRA.
Try: Find out more about FINRA by visiting their website.

Series 24 license

The Series 24 license is administered by the FINRA. It is a required license for those who wish to oversee branch activities as investment brokers. These individuals must complete a course to learn trading market supervision methods, supervision of investment banking and sales supervision methods. Individuals with this level of training may be able to work for themselves. The Series 24 license is obtained through passing a 210-minute exam.
Try: Visit the the ABTraining Center to learn more about the Series 24 license and courses.

Annuities

To obtain an investment broker license, individuals will need to learn about annuities. Annuities are contracts between an individual and an insurance company. The individual makes a lump sum payment or makes several payments. The insurance provider then makes periodic payments to the individual. This is a tax deferred method of investment.
Try: The U.S. Securities and Exchange Commission provides a detailed explanation of annuities.

Series 6 license

The Series 6 license provides investment brokers with the ability to sell mutual funds, variable life insurance and variable annuities. Individuals will need to take a Series 6 course and pass the exam to obtain the Series 6 license.
Try: Visit the Empire Stockbroker Training Institute to find out what you need to do to prepare for the Series 6 license.

National Commodity Futures Examination, NCFE

The National Commodity Futures Examination is another type of investment broker licensing exam. The National Futures Association is a regulatory organization for investment brokers and agents in the United States futures industry. Individuals need to pass the NCFE within two years of applying for membership.
Try: Visit the National Futures Association to learn more about the group and the exam, as well as alternatives to taking the exam.