Study for the Series 6 Exam

Planning to sit for the Series 6 Exam? Then be prepared for questions on Opening Customer Accounts, including the necessary items required for accepting a new customer. FINRA publishes a Content Outline for the Series 6 Exam, and Section 2.1 specifically talks about the requirements for opening customer accounts. Therefore FINRA is telling us that the Series 6 Exam will include questions on opening such accounts. Bob Eder in his Study for the Series 6 Exam discusses the customer account  requirements in Chapter Four. The SEC also publishes a list of these requirements. Here is what the SEC says at  (https://www.sec.gov/oiea/investor-alerts-bulletins/investoralertsib_openbrokerageaccount): "Information You Will Need to Provide "Brokers generally request personal information from their customers, including financial and tax identification information. Brokers need this information to comply with laws and other regulations. Some of the information a broker will likely ask you t

Are you planning to take the Series 6 Exam to qualify as representatives registered to sell mutual funds and variable annuities? Then be forewarned that FINRA's Content Outline for the Series 6 Exam includes account registration types in Section 2.1. These account registration types include  tenancy in common (TIC), tenancy by the entirety, joint tenancy with rights of survivorship (JTWROS), and others. Bob Eder has a full treatment of the types of account registration in his Study for the Series 6 Exam . Here is a sample of Bob Eder's discussion: Tenancy by the Entirety (2.1) This form of ownership is available only between married couples. About 20 states still permit tenancy by the entirety. It grants the wife equal right to the use of the property ab initio , i.e., from the very beginning of the partnership, for example, the family home. Tenancy by the entirety considers husband and wife to be one legal unit. It does not permit creditors to attach the interests of one of

Series 6 Exam candidates should expect  that several Series 6 Exam questions deal with FINRA and SEC rules on proper communications with retail customers and keeping written records of such communications. The  Record-Keeping Rules state that a brokerage firm has an obligation to keep written records of advertising material sent to customers by its registered reps. Such records must be in writing or electronic form, and be signed and dated by a registered principal of the broker/dealer.  But many reps do not know that the brokerage firm is also bound to keep records of all communications, even those that are sent or received through social media, such as Facebook, Twitter, et al. Yes, the Record-Keeping Rule covers communications with customers through social media, e-mail, digital messaging, and all other website and internet platforms. (These communications are known as "off channel.") That this is an important topic on the Series 6 Exam is underscored by an SEC Press Relea

I f you plan to sit for the Series 6 Exam, make sure that you thoroughly study and know the provisions of FINRA's rule on Retail Communications, Rule 2210. It is not necessary to identify Rule 2210 by its number, but it is necessary to know its major rule provisions.Why is Rule 2210 so important for the exam? The reason is that FINRA tells us that it is important in its Series 6 Content Outline in Section 1.1. Bob Eder devotes Chapter One of his Study for the Series 6 Exam to Rule 2210 and Retail Communications. Here is a sample of Bob Eder's treatment: EXAMPLE If Suzanne, a representative, recommends shares of a mutual fund, such as the XYZ Fund, in a public talk, she must have a reasonable basis for her recommendation; and Suzanne must disclose if she has a financial interest in XYZ Fund that she endorses. If she does have a financial interest, e.g., owning 500 shares of XYZ Fund, Suzanne must disclose and describe this interest. Furthermore, Suzanne must dis

One of the common misunderstandings of "living trusts" is that a person who sets up the trust, i.e., the "grantor," obtains sizeable and valuable tax benefits. This is not correct. The purpose of setting up a living or "revocable trust" is to provide an easier way to transfer assets to beneficiaries upon the death of the grantor, not to obtain tax benefits either for the grantor or for the beneficiaries. The subject of Trusts is contained in the Series 6 Content Outline published by FINRA, indicating that questions on living trusts are contained on the Series 6 exam. (See FINRA Series 6 Content Outline Section 2.2.) Bob Eder discusses Trusts and Estates in his Study for the Series 6 Exam . Here is a sample of Bob Eder's treatment of Living Trusts: Trust Accounts                                                                                                                (2.2) One of the most common trusts that is fairly easy to set up is the living

  Planning to take the Series 6 exam to qualify as a FINRA-registered representative able to sell investment companies and variable products? Then make sure you study the provisions of SEC Regulation D which governs the offerings of private placements. Oh? You didn't think that the Series 6 would include questions on private placements? Then read on . . . Section 1.2 of  FINRA's Content Outline for the Series 6 includes a chunk on the provisions of Regulation D. This regulation sets forth conditions under which an issuer may offer a new issue privately, i.e., without making an offering available to the general public. Regulation D consists of nine sub-rules, 500 through 508, that establish conditions and definitions. Rule 506 is especially important because it lists the conditions for an unlimited amount of securities to be offered. It allows only a limited number of unaccredited investors, but does allow accredited investors to be unlimited in number. Therefore, Series 6 appli