One of the most common questions candidates we receive from candidates: which license should I pursue first, the Series 65 or the Securities Industry Essentials “SIE” exam? While there are nuanced exceptions, these exams are designed to prepare candidates for distinct career paths.
Before the creation of the SIE, an aspiring broker would have to be hired and “sponsored” by a broker dealer before they were allowed to sit for the Series 6 or Series 7 exams. The Series 6 allows a representative to sell products such as mutual funds or variable annuities, while the Series 7 allows for the sale of individual securities. Thus, it’s important that licenses are attained immediately. This created an obvious “chicken or the egg” issue for aspiring brokers and hiring managers alike. It was quite risky, and potentially expensive, for a company to hire someone with no licenses or experience. Further, the new employee couldn’t trade or earn commissions until he or she began acquiring licenses. The SIE was designed to remove a barrier to entry and provide aspiring brokers with the opportunity to gain basic industry knowledge, without being sponsored by a firm. Once hired, “top off” exams will be necessary to gain the Series 6 and/or 7, though they are much shorter than they were before the advent of the SIE.
The Series 65 paves the way for an entirely different career path. This license allows an advisor to provide investment advice for a fee. Those who hold the Series 65 are Investment Advisor Representatives for a Registered Investment Advisor or “RIA”. This is a stark contrast to the Series 6 and 7, which allow holders to sell commissioned products. For candidates who wish to pursue a career providing financial planning advice at an RIA, the Series 65 is the best place to start. Of course, attainment of the CFP® designation fulfills the Series 65 requirement in most states.
If you’re seeking employment at a broker dealer, it may be beneficial to pursue the SIE exam. However, if you aspire to be a paraplanner or associate planner at an RIA, the Series 65 is the license you should pursue. Further, it may be beneficial to consult the ADV and/or FINRA registrations of your target firms and identify which licenses their advisors maintain. It’s also important to mention that regardless of your initial choice, making the transition to various segments of the industry is increasingly feasible.
Are you looking to join the financial planning industry or simply need advice on “what’s next” in your career? If so, please reach out. We’re eager to connect with you!
Article written by J. Lineberry - Account Executive, New Planner Recruiting, LLC