Finra parking licenses

When there is a large enough brokerage business to justify an investment adviser to be dually registered as a registered representative RR of a broker dealer firm while simultaneously operating as investment adviser representative IAR of an RIA firm, such an individual will often be referred to as a hybrid advisor. It should also be noted that RIA firms do not hold any licenses for individual investment advisers, regardless of it being the Series 7, Series 65 , Series 66, etc.

The concept of the Series 7 license being held by a firm is unique to the broker dealer industry. If that threshold is out of reach for an advisor, unfortunately it is not generally possible to simply "hang" or "park" a Series 7 license with a broker dealer firm. Not only does "parking licenses" not make business sense for the broker-dealer firm, it can also lead to regulatory sanctions against the firm.

As such, a financal advisor's Series 7 license will remain active for 24 months after the advisor leaves his or her current broker dealer firm. If the advisor wishes to rejoin a broker dealer after the 24 months have passed, the advisor will need to retake the Series 7 examination. As RIA registration specialists, we often find that financial advisors are initially quite concerned about losing their Series 7 license, but they quickly come to realize that the advisory fee focus of their business has made the Series 7 license unnecessary and there is often no business reason to try and keep it active for the future.

Topics: RIA Compliance. In an increasingly regulated U. Some states require florists, ball-room dance instructors, hair braiders and interior designers to pass a certification test and periodically pay a fee to a regulatory body to maintain their licenses.

It should be no surprise, then, that investment advisers who may handle hundreds of millions of dollars of other people's money should also be required to pass tests to become certified - that is, that they are only at that point legally allowed to give investment advice to others and, in some instances, to execute stock trades on their behalf.

If you're wondering about maintaining your Series 7 and Series 66 licenses after leaving an investment firm otherwise known as a broker-dealer , you already know the details of those licenses. For interested readers who've never had the pleasure of taking the Series 7 exam: it's fairly grueling and, once you've passed it, you can do the kinds of things your broker does - in fact, your broker must have a Series 7 License to handle your account.

FINRA also requires anyone working at a brokerage and handling securities which, if you're a broker representative, is pretty much inevitable to pass the less-rigorous Series 66 exam as well. The Series 66 exam has a similar requirement. A complication of the Series 7 and 66 licenses is that you can only maintain them in good standing for two years once you've left an investment firm. It would be nice if there were a work-around, but there really isn't.

As close as a workaround comes - and it's not exactly illegal, although it's frowned upon - is if you've left a firm in good standing and on good terms. In that event, the firm may be willing to "park" your license, which means simply not reporting your departure to FINRA.

While that does happen, it's not a good idea. If FINRA sees you as noncompliant and you've exceeded the two year limit, they'll make you start all over again, which means taking that unpleasant six-hour Series 7 test and, for good measure, the Series 66 exam, as well. They'll also put you through some time-consuming hoops to determine if you've broken any other FINRA regulations.