The Licenses and Certifications You Need When Trading for Others - dummies

The Licenses and Certifications You Need When Trading for Others

By Michael Griffis, Lita Epstein

If you decide you want to trade for others as well as for yourself, you need to become a registered representative. The most comprehensive test you can take is the FINRA’s Series 7 exam, and you’ll need a sponsoring broker.

Most times, when you sign up for the required coursework for this examination, either through self-study courses online or through a nearby training school, the school can help you locate a sponsoring broker if you don’t have one.

This license enables you to purchase and/or sell all securities products, including corporate securities, municipal securities, municipal-fund securities, options, direct participation programs, investment-company products, and variable contracts. Most of the other representative exams are taken whenever you want to sell only a specific type of security rather than the broader options that a Series 7 certification enables you to market.

Professional certifications are not required to sell securities. Most pros who seek these certifications do so to show their clients that they have attained a level of proficiency and met or exceeded the standards within their specialties.

Many schools that train people for professional designations provide ways for others like you to take the coursework, even if you don’t plan to get the license or certification. You can even study for many of these courses at home online. Some of the schools offering online education services in the securities and financial advisor area include the following:

As you probably realize by now, selling securities is a highly regulated field that requires considerable training before you can sell even your first share of stock. Although some people privately trade for others, they risk the possibility of an investigation by the FINRA or their state regulators whenever they do so without registering at the state or federal level.

Be sure that the trading activities you do for others fit within the law, or you can end up in a legal mess facing significant fines.