The Series 6 is a securities license entitling the holder to register as a company’s representative and sell certain types of mutual funds, variable annuities, and insurance. Holders of the Series 6 license are not authorized to sell corporate or municipal securities, direct participation programs, and options. With Series 6, an individual can purchase or sell certain types of mutual funds, variable life insurance, municipal fund securities, variable annuities, and unit investment trusts.

As you begin your study and preparation for the Series 6, be aware of two things:

  1. What securities a Series 6 qualifies a candidate to sell
  2. The relative importance of the topics that make up the exam.

Key Takeaways

  • The FINRA Series 6 is a securities license entitling the holder to register as a company’s representative and sell certain types of mutual funds, variable annuities, and insurance.
  • Candidates must pass the Series 6 exam to obtain a Series 6 license, and the Securities Industry Essentials (SIE) exam is a corequisite for the Series 6 exam.
  • Candidates must be sponsored by a member of FINRA or a self-regulatory organization (SRO) to take the exam.
  • Series 6 exams were traditionally taken in person at test centers, but FINRA began offering them online in 2020.
  • The greatest disadvantage of a Series 6 license is that holders are not authorized to sell exchange-traded funds (ETFs).

Who Needs the Series 6?

The Financial Industry Regulatory Authority (Formerly NASD’s) Study Guide for the current Series 6 exam states that:

“The Investment Company/Variable Contracts Products Limited Representative Qualification Examination (Series 6) is used to qualify persons seeking registration with the NASD under Article II, Section 2 of the NASD By-Laws and applicable NASD Membership, Registration and Qualification Rules. Registered Representatives (RRs) in this limited category of registration are permitted to transact a member’s business in redeemable securities of companies registered pursuant to the Investment Company Act of 1940, securities of closed-end companies registered pursuant to the Investment Company Act of 1940 during the period of original distribution only, and variable contracts and insurance premium funding programs and other contracts issued by an insurance company…”

Simply put, a person who wishes to become a registered representative (RR) and sell mutual funds, unit investment trusts (UITs), variable annuities, or variable life insurance must pass the Series 6 exam. A Series 6 RR cannot sell closed-end funds except at their IPO (a prospectus offering).

The Series 6 Exam

The Series 6 exam underwent a major revision that became effective Nov. 30, 2005. However, the changes to the examination are not primarily in subject matter; they are more structural. One, the number of questions allocated to various topics has changed. The exam is now more heavily oriented toward RR interactions with customers. Two, the exam is now divided into six topical sections rather than four. The exam must still be completed within 90 minutes and contains 50 questions. The passing score of 70% also remains unchanged.

There is no prerequisite for the exam, but the Securities Industry Essentials (SIE) exam is a corequisite for Series 6. Before October 2018, the exam was 100 questions and didn’t have the SIE corequisite.

Scratch paper, pencils, and calculators are loaned to candidates at the testing center.

Exam Topics

The Series 6 exam will be broken up into the following questions:

  1. Securities Markets, Investment Securities and Economic Factors (8 Questions)
  2. Securities and Tax Regulations (23 Questions)
  3. Marketing, Prospecting and Sales Presentations (18 Questions)
  4. Evaluation of Customers (13 Questions)
  5. Product Information: Investment Company Securities and Variable Contracts (26 Questions)
  6. Opening and Servicing Customer Accounts (12 Questions)

As you can see, Sections 3, 4, and 6 are directly related to the interaction between the RR and the customer. These three sections comprise 43% of the exam.

What does this mean for Series 6 exam candidates? Focus your attention on the topic areas that count the most. Remember, you need to achieve an overall score of 70% to pass.

Note that the topics in Section 1 are now only 8% (compared to the previous 23%) of the exam.

Exam Time Management

Because there are 100 questions on the exam and 135 minutes to complete them, candidates have 1.35 minutes to complete each question. Therefore, candidates should carefully budget their time.

Flag the Hard Questions

Series 6 candidates will normally encounter several questions on the exam that are long and wordy. These are situation-type questions and can take quite a bit of time to work through and answer. Although it is easy to get wrapped up in these questions, you should remember that the simple questions count just as much as those that are long and complex.

A good strategy, therefore, might be to flag a question—the computer program at your testing center will allow you to do this—that will take more time. That way, you can go back and work on answering it after you’ve finished the test. Choose the questions that you flag carefully: you won’t want to do it for 30 questions in a row!

Follow the Bell Curve

Those who have recently taken the exam report that the structure of the questions is a “bell curve.” That is, the first question and the last question on the exam are quite simple. The level of difficulty increases until one is past the midway point, then drops off steadily until the end. Be aware that this is likely to be your experience and don’t let the increasingly complex questions frustrate you. Press on. Easier questions will be on the way.

Don’t Second Guess Yourself

The majority of those who take the Series 6 report that they had time remaining after answering all the questions. If this also happens to you, finish the exam, wait for the congratulatory message, smile and go on about your life! Don’t go back and change answers! Statistically, when you change answers, you’re wrong most of the time. If you must guess, your first guess is usually the best.

Sharpen Your Skills

To help increase your speed in answering questions, do many practice questions. As you do the questions, keep track of your progress by noting your weakest topics If you are not performing well—especially in those areas that have a significant number of questions—you’ll need to review the subject matter more closely.

Exam Day

When you go to the testing center, be sure to arrive early. After you’ve signed in and put your personal effects in a locker, you’ll be given scratch paper, pencils and a calculator to use during the exam.

You will normally only need to use the calculator two or three times during the whole session. The current test is much less a mathematical exercise than it was several years ago. You must, however, be aware of the basic formulas for mutual funds. The database has a number of questions that require a candidate to recognize the formulas, although you won’t have to use them to do computations.

The scratch paper is another matter. Before you start the exam, make all the notes you need on the scratch paper. One of the most useful tools is the teeter-totter illustrating the yields on discount and premium bonds. You may be able to use these to simplify answering several questions. Anything else that you want to use as you take the exam should be on your scratch paper before you start the exam.

Exam-Taking Hints

  • Read each question all the way through and look at all the answers. Then go back to the question before attempting an answer. Did you see the word “not” or “except”? Can you spot repeated keywords in the question and a specific answer?
  • After you’ve followed the process, look at the answers. Eliminate the incorrect answers as quickly as possible. If two of the answers are exactly opposite the odds are very high that one of those is correct.
  • If you are confronted with a question—particularly about rules—and can’t decide between the final two selections, carefully consider the longer answer. The question writer will normally include everything in the correct answer. However, you should only use this technique when you have to guess
  • Don’t rush. In your haste, you might miss an easier question by failing to read carefully. Some of the questions are tricky, but don’t get too caught up with any one of these; easy questions count just as much as the longer, more difficult ones.

Continuing Education

Licensees must fulfill continuing education (CE) requirements and receive sponsorship from a FINRA registered company to keep their Series 6 licenses.

FINRA’s continuing education program includes two elements: a regulatory element and a firm element. On the regulatory side, FINRA requires licensees to complete a computer-based training session within 120 days of the second anniversary of registration. FINRA also requires a computer-based training session every three years after that. The firm element requires broker-dealers to establish and maintain a continuing education program.

The Bottom Line

If you follow the advice we’ve outlined here, you will be well on your way to passing your upcoming exam. To ensure you are at your best, go to bed early the night before the exam and do not try cram in study time immediately before your test. Relax as much as possible and go into the exam confident that you’ll pass the first time. Remember: 70% is a passing score—an A. 71% is an A+!

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