Comparing FINRA vs NASAA Exams

🔍 Comparing FINRA vs NASAA Exams

Both FINRA (Financial Industry Regulatory Authority) and NASAA (North American Securities Administrators Association) are key regulators in the securities industry, but they have distinct roles and exam requirements. Understanding the differences between their exams will help you determine which certification is necessary for your career goals. Here’s a detailed comparison:

1. What is FINRA? 📊

• Role: FINRA is a private, non-profit organization that regulates member firms and registered representatives in the U.S. securities industry. Its primary mission is to protect investors by ensuring that brokers and firms follow industry rules and regulations.
• Key Exams: FINRA offers a range of qualification exams for individuals seeking to work in securities sales and trading. Popular exams include:
  • Series 7: General Securities Representative Exam (qualifies individuals to sell a broad range of securities).
  • Series 63: Uniform Securities Agent State Law Exam (covers state securities laws).
  • Series 6, 66, 24, and others tailored to specific roles.
• Focus: FINRA exams focus on the rules and regulations governing the sale of securities, and the duties of registered representatives to clients and firms. These exams are primarily designed for securities brokers, dealers, and their representatives.

2. What is NASAA? 🏛️

• Role: NASAA represents state securities regulators in the U.S., and its mission is to protect investors by promoting uniform securities regulations across states. It helps ensure that investment professionals adhere to state-specific securities laws.
• Key Exams: NASAA provides exams that are required to register as a state securities agent or investment adviser. These exams include:
  • Series 63: Uniform Securities Agent State Law Exam (required in most states for individuals selling securities).
  • Series 65: Uniform Investment Adviser Law Exam (required for investment advisors who provide advice for compensation).
  • Series 66: Uniform Combined State Law Exam (combines content from Series 63 and 65, allowing individuals to become both securities agents and investment advisors).
• Focus: NASAA exams focus on state-specific securities laws and regulations, including ethical standards and the duties of investment professionals to investors.

3. Exam Content Comparison 📚

FINRA Exams

• Series 7: Covers a wide range of financial products and regulations, including:
  • Equity securities, options, mutual funds
  • Debt instruments and government securities
  • Regulatory requirements and ethics
  • Customer accounts and trading practices
• Series 63: Focuses on state-specific securities laws, including:
  • Registration requirements for securities agents
  • Ethics and standards for transactions
  • Blue sky laws (state regulations regarding securities registration)

NASAA Exams

• Series 63: Same content as FINRA’s Series 63 (focused on state law).
• Series 65: Covers:
  • The fundamentals of investment advising
  • Ethical and regulatory practices for advising clients
  • Portfolio management, financial planning, and client relationships
• Series 66: Combines Series 63 and 65 content, focusing on:
  • State securities law (Series 63 content)
  • Investment advising (Series 65 content)
  • Ethical standards and regulations

4. Who Needs Each Exam? 🧑‍💼

• FINRA Exams:
  • Series 7: Required for anyone wishing to sell a broad range of securities products, including stocks, bonds, options, and mutual funds.
  • Series 63: Typically required in addition to Series 7 for individuals who wish to sell securities in most states.
  • Series 6, 66: Required for specific roles, such as mutual fund sales representatives or those providing financial advisory services.
• NASAA Exams:
  • Series 63: Required for individuals who want to act as securities agents and sell securities in multiple states.
  • Series 65: Required for individuals wishing to provide investment advisory services (must be licensed as an investment adviser).
  • Series 66: A combined license for those who want to both sell securities and provide investment advice (combines Series 63 and 65).

5. Exam Format and Requirements ✍️

• FINRA:
  • Administered by: FINRA, through Prometric testing centers.
  • Exam Length: Varies depending on the exam. For example, the Series 7 has 125 questions and lasts 3 hours and 45 minutes.
  • Passing Score: Generally, a 72% is required to pass.
• NASAA:
  • Administered by: NASAA, in partnership with FINRA for certain exams like the Series 63.
  • Exam Length: Typically shorter exams like the Series 65 (140 questions, 3 hours) and Series 63 (60 questions, 1 hour and 15 minutes).
  • Passing Score: Generally 70% or higher.

6. Registration and Costs 💸

• FINRA Exams:
  • Registration Fee: Varies per exam (e.g., the Series 7 costs around $300).
  • Eligibility: Must be sponsored by a FINRA-member firm.
  • Location: Available at Prometric test centers nationwide.
• NASAA Exams:
  • Registration Fee: Varies per exam (e.g., the Series 63 costs around $135).
  • Eligibility: Must be sponsored by a FINRA-member firm or meet state-specific requirements.
  • Location: Available at Prometric test centers or through state regulators.

7. Summary Comparison Table 📊

Final Thoughts 🧠

• FINRA exams are more focused on federal-level regulations and securities products, while NASAA exams dive deeper into state-level regulations and investment advisory practices.
• If you plan to work as a broker or investment representative, you will likely need both FINRA and NASAA certifications, depending on the role and your state of operation.

For specific guidance on what exams you need based on your career goals, you may want to consult with your employer or a professional licensing advisor.