Series 6 Payout Structures Cheat Sheet
- April 1, 2025
- Posted by: 'FINRA Exam Mastery'
- Category: Finance
🧾 Series 6 Payout Structures Cheat Sheet
📘 Understand How Representatives Get Paid Under the Series 6 License
The Series 6 license qualifies financial professionals to sell mutual funds, variable annuities, and insurance products—but not individual stocks or options. Knowing the various payout structures is key to understanding how compensation works in this limited scope of securities. This cheat sheet breaks down the typical payout models used in Series 6 roles.
🎯 1. Commission-Based Payout
This is the most common structure for Series 6 reps working at broker-dealers or insurance-affiliated firms.
| Product Sold | How Rep Is Paid | Typical Range |
|---|---|---|
| Mutual Funds (A Shares) | Front-end load (commission) | 3%–5.75% upfront |
| Variable Annuities | Commission from insurance company | 4%–7% upfront |
| 529 Plans | Depends on share class | 3%–5% front-end or trail-based |
Key Notes:
- The firm receives the full commission first, then pays the rep a split.
- Typical rep share: 30%–90% depending on experience, production level, and firm policy.
🎯 2. Trailing Commissions (“Trails”)
These are ongoing fees paid for as long as the client keeps their investment, particularly for Class C shares and variable annuities.
| Product Type | Trail Fee |
|---|---|
| Class C mutual funds | 1% annual trail, paid quarterly |
| Variable annuities | 0.25%–1% trail based on contract value |
| 529 Plans (C shares) | 0.25%–0.50% trail annually |
Key Notes:
- Great for building recurring income.
- Less upfront but accumulates over time.
🎯 3. Salary + Bonus (Bank Reps / Captive Agents)
Some Series 6 reps—especially those working in banks or credit unions—are salaried employees with performance-based bonuses.
| Structure | Details |
|---|---|
| Base salary | $30,000–$60,000 (typical range) |
| Bonus/commission | Based on product sales volume |
| Quotas or scorecards | Tie bonuses to sales of annuities, funds, etc. |
Key Notes:
- More predictable income, less pressure.
- May include incentives for cross-selling.
🎯 4. Gross Dealer Concession (GDC) Split
Reps often receive a percentage of GDC generated from product sales.
| Production Level | Rep Payout from GDC |
|---|---|
| New reps | 30%–50% of GDC |
| Mid-level producers | 50%–70% of GDC |
| Top producers | 75%–90% of GDC |
Example:
If you sell a mutual fund with a 5% load and $10,000 invested:
- GDC = $500
- Rep at 60% payout earns $300
🎯 5. Hybrid / Fee-Based Structures (Limited)
Though Series 6 reps cannot manage fee-based advisory accounts (requires Series 65/66), some firms offer limited advisory roles under supervision, especially for variable contracts or fund wrap programs.
| Fee Type | Applicable to Series 6? |
|---|---|
| AUM-based fees | ❌ (requires Series 65/66) |
| Fund wrap fees | ✅ (if firm structure allows) |
| Insurance platform fees | ✅ (if paid through insurance carrier) |
🚀 Conclusion: What to Remember for Series 6 Exam and Real-World Practice
- Series 6 reps are typically commission-based, with upfront loads and trail income.
- Some work under salary + bonus models, especially in banks.
- Understanding share classes (A, B, C) and their payout differences is critical for the exam.
- You cannot charge asset-based advisory fees unless you also hold a Series 65/66.
🎓 Ready to master Series 6 content and compensation models?
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Stay sharp. Understand how you’ll be paid. Pass with confidence.