This easy to follow guide will take you through the steps to becoming a stockbroker in Pennsylvania by satisfying broker-dealer agent licensure requirements maintained by the Pennsylvania Securities Commission, as well as registration requirements maintained by the industries largest self-regulatory organization, the Financial Industry Regulatory Authority (FINRA).
Step 1. Get Your Education
While the Pennsylvania Securities Commission does not require a college education for the issuance of a broker-dealer agent license, broker-dealer firms often require that candidates for Series 7 Exam sponsorship have a bachelor’s degree. Also, you may choose to pursue elective professional designations during your career, for which a degree is often required.
Consider one of the following degrees as you discuss your options with an academic advisor:
- BS-Finance
- BA-Accounting
- BS-Business/Finance
- BA-Consumer and Family Financial Services
- BS-Business Administration- Finance
- MBA
Focus on business and finance courses in the beginning of your academic career, while concentrating on sales and marketing courses toward the end. Broker-dealer agents can benefit from the following:
- Finance
- Economics
- Statistics
- Taxation
- Marketing
- Business ethics
- Business law
- Business communications
- Quantitative applications in business
- Behavior of organizations, persons and groups
- Accounting, in particular courses in financial accounting and managerial accounting
Step 2: Take the Required Exams
- You must become sponsored by a Pennsylvania-registered broker-dealer in order to take the required securities exams. Apply to open positions after you have researched firms in your area. Consider smaller independent firms and find an organization that supports an investment philosophy that agrees with your own.
- Your sponsoring firm will help you fill out the Form U-4, Uniform Application for Securities Registration or Transfer, which will allow you to take the required exams and, which also serves as the Pennsylvania Securities Commission license application.
- You will be required to provide a copy of your fingerprints to FINRA to be used for an FBI background check. If your broker-dealer cannot assist you with fingerprinting, you can be fingerprinted for a small fee at a local police station or sheriff’s office.
- The compliance department of your sponsoring broker-dealer will submit Form U-4 electronically through the Central Registration Depository (CRD) and pay the required fees from there general CRD account:
- $85 fee associated with registering with FINRA
- The test fees– $245 for the Series 7, $147 for the Series 63, and $177 for the Series 66
- $30.25 to process your fingerprint card
- $120 Pennsylvania registration fee
Once your broker-dealer has received approval from FINRA, you may register for the required exams:
The Series 7, General Securities Representative Examination, or any other limited securities license exam your sponsoring firm directs you to take
AND
The Series 63, Uniform Securities Agent State Law Examination OR the Series 66, Uniform Combined State Law Examination. (These exams cover the specifics of state securities laws.)
- Once your registration becomes active, you must schedule your exams within 120 days through third party exam facilitators. Find the Pennsylvania exam location that is most convenient for you.
- Your firm can help you prepare for your exams. On the day of the exam, plan to arrive an hour before the test is scheduled.
- You will be informed of your exam score immediately after completion. Once you have passed all required exams, you will be a licensed broker-dealer agent in Pennsylvania.
Step 3: Get Your On-The-Job Training
Once you have a position at a broker-dealer firm, you will participate in on-the-job training. This will help you to better understand appropriate investment strategies that align with your firm’s investment philosophy. On-the-job training may include shadowing a fellow employee or participating in group sessions.
The on-the-job training that you receive will most likely cover a number of different financial vehicles in the context of aligning clients with suitable investments:
- Stocks
- Options on stocks
- Variable contracts
- Mutual funds
- Government securities
- Corporate equity and debt securities
- Corporate, municipal and treasury bonds
- Open-end and closed-end investment company shares
Direct participation programs like non-publicly traded real estate investment trusts or oil and gas leases
Step 4: Ongoing Requirements for License Renewal and Continuing Education
Annual License Renewal and Fees
Each year, your Pennsylvania securities licenses will be renewed automatically. There is a $105 renewal fee owed to the Pennsylvania Securities Commission each year, which will be paid automatically from your broker-dealer’s general CRD account.
Continuing Education Requirements
In order to stay abreast of current regulations, you are required to complete the Securities Industry Continuing Education Program. The continuing education program is made up of two distinct elements:
- The Regulatory Element
Beginning in your third year, the Regulatory Element training program must be completed (within 120 days from your second annual registration). It is then completed once every three years thereafter.Broker-dealer agents that possess a Series 7 license must complete the S101 General Program. The S101 addresses a broad area of material within four modules:
- Handling Customer Accounts/Trade and Settlement Practices
- Communicating with the Public
- Client/Product Suitability
- New and Secondary Offering & Corporate Finance
- The Firm Element
Each year, FINRA assesses the most relevant topics affecting the financial industry. Your broker-dealer firm will then implement its own Firm Element program based on the requirements set by FINRA and the topics it deems appropriate. You are required to complete Firm Element training each year. The Firm Element addresses the following general areas:
- Regulatory requirements related to products, services, and strategies
- Investment features and associated risk factors
- Sales practices and suitability standards
Updating your Form U-4
You must disclose any changes that may affect your Form U-4 to your broker-dealer’s compliance department so that your registration information can be updated. Instances that would trigger an updated include:
- Changes to name or marital status
- Address updates
- Customer complaints
- Pending or completed disciplinary actions
- Financial judgments against you
- Civil judgments against you
- Criminal disclosure
Your securities registration and all information contained therein can be accessed by the public through FINRA’s BrokerCheck.