In terms of fixed annuities, there are five main types: SPIAs, DIAs, MYGAs, QLACs, and FINAs (FIAs). A life insurance license is all that is required to solicit and sell fixed annuity schemes because they are designated as life insurance products.
What licensing do you need to sell annuities?
It is known as the limited-investment securities license, or the Series 6 license, in the financial industry. They provide their holders the ability to sell “packaged” financial products such as investment trusts, variable annuities, and mutual funds (UITs).
Can anyone sell annuities?
Yes, annuity payments can be exchanged for cash. Annuity payments can be sold for a lump sum of money if your financial circumstances change and you no longer require them. As a whole or in parts, annuities can be sold.
What license do you need to sell investments?
Without a license, you can’t sell securities at a brokerage business. Depending on the brokerage you’re working for or being sponsored by, you’ll need different types of licenses. When hiring new financial advisors, many companies require that they earn the appropriate securities licenses before they may market the company’s products or services. An independent broker-dealer must be licensed if you want to be a Registered Investment Advisor.
- An investment package salesperson must have this license in Series 6 if they want to market mutual funds and variable annuities. It is possible to sell packaged investment products with the Series 6 license, which is administered by FINRA and is known as the limited-investment securities license. You’ll also need this license if you’re an insurance agent looking to sell variable products.
- To become a stockbroker, you’ll need Series 7 licensing. As the general securities representative license administered by FINRA, the Series 7 license allows you to sell nearly any sort of individual security, such as preferred stocks and options, bonds and other individual fixed income instruments. With the exception of commodities futures, real estate, and life insurance, this license allows you to sell just about anything.
- Series 3: The FINRA-administered Series 3 license is required to offer commodities futures contracts.
- Series 31: The Series 31 license is an offshoot of the Series 3 license and is required if you intend to offer managed futures, which are pools of commodity futures.
- Anyone who wants to practice in any state as a stockbroker or mutual fund salesperson needs to be licensed in that state’s Series 63. The Uniform Securities Agent License (Series 63) is administered by NASAA and is referred to as such.
- Series 65: This license is required if you want to work as a stockbroker or other financial representative who interacts with managed-money accounts and are paid on an hourly basis rather than on commission. NASAA is also in charge of running it.
- Instead of gaining two licenses, you can choose to hold Series 66 if you already have the Series 7 license and have solved most of the questions on the Series 65 exam.
- Series 79: This license is required if you intend to provide advise or arrange public or private debt or equity issues, mergers or acquisitions, tender offers, final restructuring, asset sales, and divestitures or corporate reorganizations.
- Serial Number (Series) 99: This license is required for any position in the back office that requires the authority to make major commitments of capital by a senior manager or supervisor.
Obtaining one of these licenses is very usual. The FINRA and NASAA websites both include a more thorough list. Some of these licenses, such as Series 6 and 7, need sponsorship or employment by broker-dealers to obtain.
What is a Series 65 license required for?
Individuals who pass the Uniform Investment Adviser Law Examination, often known as the Series 65 license, are able to offer investment and financial planning services to their clients. Individuals can become Investment Advisor Representatives after passing the Series 65 test (IARs).
The Series 65 license is necessary for financial advisors who work with ERISA-regulated retirement accounts to provide advice.
What license do you need to sell equity indexed annuities?
To sell variable annuities or mutual funds, you’ll need a Series 6 from the Financial Industry Regulatory Authority (FINRA). Stocks and bonds can be sold with a Series 7 registration, while commodities can be sold with a Series 63 registration. Being a fixed product, no special permissions are needed to market an equity-indexed annuity. With a Series license, you’ll be able to educate your clients on a larger range of financial issues.
What is a Series 6 license?
Registration as a limited representative with FINRA is possible with the Investment Company/Variable Contracts Products Limited Representative License, part of the Series 6 license. In the insurance industry, the Series 6 is typically seen as the appropriate companion license.
Who needs a Series 6 license?
In the financial services industry, the Series 6 is sought after by professionals. The Series 6 license is used by financial planners, retirement plan professionals, investment advisors, and private bankers, among other professions. Candidate must pass the Investment Company/Variable Contracts Products Limited Representative (Series 6) exam in order to receive the Series 6 license The Series 6 test requires passing the Securities Industry Essentials (SIE) exam. For the SIE to function, there is no need for a sponsor.
The Series 6 test is administered by the Financial Industry Regulatory Authority (FINRA). Among the subjects covered are mutual funds and variable annuities; securities; taxation; retirement plans; and insurance products. By properly answering at least 35 of the 50 questions in 90 minutes, a passing grade is earned. There are 55 questions in total, of which five are not graded. Only computers are authorized to conduct the test, which costs $40.
Series 6 tests were generally taken at Prometric testing centers by candidates. FinRA began testing online in 2020, including the Series 6 exam, which was previously only available in paper form. The online tests were also given by Prometric. However, candidates or their employers had to install specialist software on their computers and provide cameras for the testing.
What is required for a Series 7 license?
- All securities products including but not limited to corporate and municipal securities, options, investment firm products and variable contracts may be sold under this license in Series 7.
- FinRA (previously NASD) members or self-regulatory organizations must sponsor you. Without a sponsor, you cannot take the Series 7 exam.
- The Series 7 exam, conducted by Prometric Testing Centers, requires a score of at least 72% to pass. Multiple-choice questions are part of the Series 7 exam. Completion will take 6 hours, divided into two sections of 3 hours each.
- Securities sales within a state generally necessitate the issuance of a Series 63 license.
- To sell securities in the United States, you must additionally pass the Series 6 or Series 7 examination.
- The Series 63 exam, conducted by Prometric Testing Centers, requires a passing score of 70% or above. Test-takers must answer 65 multiple choice questions on the Series 63 examination. You have 75 minutes to finish.
How much do agents make selling annuities?
Annuities are commonly criticized for paying too high a commission to the selling agent and charging too much in fees. Many often, this argument is used as a blanket statement against annuities with no comparison to other investment options.
We hope to shed some light on fixed annuity commissions, and how they affect policyholders, in this piece. Examples in this article include the vast majority of annuities and annuity carriers’ practices, however there are always exceptions to the rule.
How Much Commission Do Annuities Pay?
Annuity commissions can range from 2% to 8%, depending on the type of annuity. There is a general rule of thumb when it comes to annuity commissions: more intricate annuities mean a greater commission. As long as the multi-year guaranteed annuity (myga) provides the policyholder with a stable interest rate for the given period of time, the fee will be on the lower end (2 percent -3 percent on average). A more intricate and long-term annuity, like an index annuity, will have a greater commission (5 percent -8 percent ). The MYGA is a commodity-based product that is simple to explain and understand, but an index annuity has numerous moving parts and a lengthier surrender term, making it a more difficult sale.
Do the reduced commissions suggest a person should only buy things that are easier to find and less expensive? Definitely not. Situational factors dictate the type of annuity a person should purchase. After locking down your interest rate for a straight 10 year fixed annuity, you may expect to pay somewhere in the neighborhood of 3.30 percent (May 2020 Rates – Check Current Rates). Because the interest rate is related to an index (S&P, Nasdaq, etc.), you have the possibility for a considerably larger return on your investment, as well as additional features like lifelong income riders, nursing home benefits, and increased death benefits. In spite of the fact that index annuities have a higher commission, the overall value for the insurance holder might also be significantly higher in the correct circumstances.
