Series 7 Sponsorship

Sponsorship and Testing

Certain NASD exams require sponsorship from an NASD member firm or another Self Regulatory Agency. The most popular representative exams requiring company sponsorship include:


SERIES 6 - Investment Company and Variable Products Representative

SERIES 7 - General Securities Representative

SERIES 11 - Assistant Representative

SERIES 62 - Corporate Securities Representative


Exams not requiring sponsorship include:


SERIES 3 - Futures and Commodities

SERIES 63 - Uniform State Laws

SERIES 65 - Registered Investment Adviser

SERIES 66 - Combined State Law (S63/S65 combined)


“What does sponsorship mean and why do I need it?”

Sponsorship means that a firm registered with the NASD (basically all Stock brokerage firms) must approve and present a candidate to the NASD for testing. The purpose and application of a SERIES 7 license for instance, is to sell securities to customers. Well, that is only possible if the person is representing a firm in some capacity. So the NASD requires a firm to act as sponsor, to basically be the responsible party for that candidate. Now you can work as an investment broker independently (working out of your own office or home) but you still must be affiliated or employed with a firm before you can sign up for a sponsored test. Basically, you can’t sell securities yourself without a firm facilitating the trading of that security. We dedicate a section to the set up process of working independently later on.

“ I want to get my Series 7 before I look for a job”

Some people looking to enter the industry inquire about getting licensed first before securing employment. Well, there are some licenses that you can get on your own but the SERIES 7 isn’t one of them. Again, because the NASD does not consider the license relevant unless you are with a firm at that time to sponsor you. It is not like a Real Estate license. But, what many people do not realize is although some wish to hire SERIES 7 brokers; most firms do not require a SERIES 7 for employment consideration.

“I want to work as an independent broker out of my office or my home”

Literally hundreds of different firms allow individuals to work as independent brokers for them. There are thousands of brokers working in their home making very good incomes working out of their house. What firms like this do is get you set up as a broker including sponsorship for the SERIES 7 (if required)

Note: If you are only selling Mutual Funds, Retirement Plans and other types of certain “packaged securities”, you will only need a SERIES 6.

You will basically act as a broker as if you are in the firm’s very own office. They will provide you with phone access to the traders to call in your transactions. You will have access to the firm’s research. The firm will also allow you to have access to real time quotes and pricing software. Another big advantage to working independently with a firm is payout. The payout for someone in working on their own can be as high as 70-80% of the total trade compared to 40-50% working at a firm’s office. There is no long-term salary in these situations. They are simply setting you up and you must now run it as your own business. Some companies will also look for some sort of minimum sales volume after you are established.

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