What is the Series 6 Exam?
The Series 6, officially the Investment Company and Variable Contracts Products Representative Examination, is a FINRA securities license that qualifies individuals to sell mutual funds, variable annuities, and variable life insurance.
Unlike the Series 7 (which covers all securities), the Series 6 is a limited license focused specifically on packaged investment products.
Series 6 Quick Facts
| Feature | Details |
|---|---|
| Full Name | Investment Company/Variable Contracts Representative |
| Administrator | FINRA |
| Questions | 55 (50 scored, 5 unscored) |
| Time Limit | 90 minutes |
| Passing Score | 70% (35 out of 50) |
| Cost | $47 |
| Prerequisite | Must pass SIE first |
| Pass Rate | ~65-70% |
What Can You Sell with a Series 6?
Products You CAN Sell
| Product | Description |
|---|---|
| Mutual Funds | Open-end investment companies |
| Variable Annuities | Insurance products with investment subaccounts |
| Variable Life Insurance | Life insurance with investment component |
| Unit Investment Trusts (UITs) | Fixed portfolio investment trusts |
| 529 Plans | Education savings plans |
| Municipal Fund Securities | 529s and ABLE accounts |
Products You CANNOT Sell
| Product | Requires |
|---|---|
| Individual stocks | Series 7 |
| Corporate bonds | Series 7 |
| Municipal bonds | Series 7 |
| Options | Series 7 |
| Direct Participation Programs | Series 7 |
| ETFs (most) | Series 7 |
Series 6 vs Series 7
| Factor | Series 6 | Series 7 |
|---|---|---|
| Scope | Limited (packaged products) | Broad (all securities) |
| Questions | 55 | 135 |
| Time | 90 minutes | 225 minutes |
| Passing Score | 70% | 72% |
| Cost | $47 | $245 |
| Difficulty | Easier | Harder |
| Study Time | 30-50 hours | 80-120 hours |
| Career Options | Insurance, banks, mutual fund companies | Full-service brokerage |
Which Should You Get?
Choose Series 6 if:
- You work at a bank or insurance company
- You only need to sell mutual funds and annuities
- Your firm doesn't require Series 7
- You want a shorter, easier exam
Choose Series 7 if:
- You want maximum flexibility
- You plan to work at a full-service brokerage
- You want to sell individual securities
- You may change firms in the future
Series 6 Exam Content
Content Breakdown
| Section | Percentage | ~Questions |
|---|---|---|
| Seeks Business for the Broker-Dealer | 12% | 6 |
| Evaluates Customers | 24% | 12 |
| Provides Information and Recommendations | 50% | 25 |
| Completes Transactions | 14% | 7 |
Key Topics to Master
1. Mutual Funds (Heavily Tested)
| Concept | What to Know |
|---|---|
| NAV Calculation | (Assets - Liabilities) / Shares |
| Sales Charges | Front-end vs back-end loads |
| Share Classes | A, B, C shares and their costs |
| Breakpoints | Volume discounts on sales charges |
| Redemption | T+1 settlement, redemption fees |
| 12b-1 Fees | Distribution and marketing fees |
2. Variable Annuities
| Phase | Key Points |
|---|---|
| Accumulation | Contributions grow tax-deferred |
| Annuitization | Convert to income stream |
| Death Benefit | Minimum guarantee to beneficiaries |
| Surrender Charges | Penalties for early withdrawal |
| Subaccounts | Investment options (like mutual funds) |
3. Variable Life Insurance
- Death benefit and cash value
- Separate account investments
- Guaranteed minimum death benefit
- Policy loans and withdrawals
- Surrender charges
4. Suitability
| Factor | Considerations |
|---|---|
| Risk Tolerance | Conservative to aggressive |
| Time Horizon | Short, medium, long-term |
| Liquidity Needs | Access to funds |
| Tax Status | Tax bracket, qualified accounts |
| Investment Objectives | Growth, income, preservation |
5. Regulations
- Securities Act of 1933
- Securities Exchange Act of 1934
- Investment Company Act of 1940
- FINRA rules and conduct
- Anti-money laundering (AML)
- Customer identification (CIP)
Study Strategy
Recommended Study Time
| Approach | Hours | Timeline |
|---|---|---|
| Intensive | 30-40 | 2-3 weeks |
| Standard | 40-50 | 3-4 weeks |
| Part-time | 50-60 | 4-6 weeks |
Study Priority by Weight
-
Recommendations (50%) - Half the exam!
- Mutual fund characteristics
- Variable annuity features
- Suitability analysis
- Tax implications
-
Customer Evaluation (24%)
- Investment profiles
- Risk assessment
- Account types
-
Transactions (14%)
- Order processing
- Settlement
- Account maintenance
-
Seeking Business (12%)
- Prospecting
- Marketing rules
- Communications
Key Formulas
NAV (Net Asset Value):
NAV = (Total Assets - Total Liabilities) / Shares Outstanding
Public Offering Price (POP):
POP = NAV + Sales Charge
Sales Charge Percentage:
Sales Charge % = (POP - NAV) / POP × 100
Current Yield:
Current Yield = Annual Dividends / NAV × 100
Common Mistakes to Avoid
1. Confusing Share Classes
- Class A: Front-end load, lower 12b-1 fees
- Class B: Back-end load (CDSC), higher 12b-1 fees
- Class C: Level load, highest ongoing fees
2. Missing Breakpoint Opportunities
Know when clients qualify for breakpoints:
- Rights of accumulation
- Letter of intent
- Combination privileges
3. Variable Annuity Tax Rules
- Earnings taxed as ordinary income (not capital gains)
- 10% penalty if under 59½
- No step-up in basis at death
4. Suitability Violations
- Selling variable annuities to elderly clients inappropriately
- Recommending products for commission, not client benefit
- Ignoring stated investment objectives
Exam Day Tips
Before the Exam
- Get good sleep the night before
- Eat a balanced meal
- Arrive 30 minutes early
- Bring two forms of ID
During the Exam
- Read every question carefully
- Watch for "EXCEPT" and "NOT" questions
- Don't spend too long on difficult questions
- Flag and return to uncertain answers
- Use all 90 minutes
Time Management
- 55 questions in 90 minutes = ~1.6 minutes per question
- Don't rush, but keep moving
- Leave 10 minutes to review flagged questions
After Passing
Immediate Steps
- Receive results on screen
- Wait for FINRA processing (1-2 days)
- Complete firm registration
- Register in required states (Series 63 or 66)
Maintaining Your License
- Complete Regulatory Element CE annually
- Complete Firm Element CE as required
- Stay registered with a broker-dealer
- Follow all FINRA rules and regulations
Career Paths with Series 6
| Role | Typical Employer |
|---|---|
| Bank Investment Representative | Banks, credit unions |
| Insurance Agent | Insurance companies |
| Mutual Fund Representative | Mutual fund companies |
| Retirement Plan Specialist | 401(k) providers |
| Financial Services Representative | Financial planning firms |
Series 6 + Additional Licenses
| Combination | Capabilities |
|---|---|
| Series 6 + 63 | Sell packaged products in most states |
| Series 6 + 66 | Sell products + provide advice |
| Series 6 → Series 7 | Upgrade to full securities license |