Becoming a Financial Planner in Massachusetts

The Massachusetts Department of Labor and Workforce Development reported in 2006, that there were 9,950 insurance sales agents employed in the Commonwealth, many offering annuities and life insurance so as to offer financial planning services. That number is expected to increase by 4.9 percent by 2016. Financial service sales agents in Massachusetts will see a greater increase in the number of job opportunities in the current ten-year period ending 2016. According to Labor and Workforce statistics, there will be an increase of 14.5 percent in the number of financial services sales agents specializing in depository credit intermediation. For sales agents working in funds, trusts, and other financial vehicles, the increase is slated to be 17.9 percent. Still, these are conservative estimates, as these figures do not take into account the many self-employed financial planners working as independent contractors.

According to the 2009 U.S. Census Bureau, 21.7 percent of individuals living within the Commonwealth were age 18 and younger. This calls out the need for financial planners who specialize in college savings plans. According to the Massachusetts Department of Education, in 2008 47.7 percent of the state’s high school graduates planned to attend either a two-year or a four-year public college, while 31.9 percent intended to enroll in a two-year or four-year private college. With a total planned college enrollment of 79.6 percent for that year alone, it becomes very clear that there will be a significant demand for financial planners experienced in establishing college savings plans.

This same 2009 Census report revealed that 13.6 percent of Massachusetts’s residents were over age 65 and would be entering retirement. The rate of retirement continues to place a particular demand on financial planners specialized in providing retirement savings plans. The FDIC notes that the main deposit markets in Massachusetts are within the areas of Barnstable Town, where assets in deposit are over $10 billion. The Worcester and Springfield were close behind. These areas in which a higher concentration of higher net worth individuals and families reside are likely to be where the greatest need for financial advisors will be in the coming years.

How to Obtain an Investment Adviser Representative License in Massachusetts

The Massachusetts Securities Division is responsible for licensing investment adviser representatives (IARs) in the Commonwealth. IARs who are licensed in Massachusetts are eligible to work for any of the large investment advisory (IA) companies with a presence in the state or to obtain a license to establish their own firm. Before licensing in the Commonwealth, IARs must first obtain passing scores on the Uniform Investment Adviser Law Examination (Series 65), or on both the Uniform Combined State Law Examination (Series 66) and the General Securities Representative Examination (Series 7). In lieu of this requirement, an individual can be licensed as an IAR if they hold one of the following professional designations/certifications: Personal Financial Specialist (PFS), Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), Chartered Financial Analyst (CFA), or Chartered Investment Counselor (CIC).

There are a number of global and local investment advisory firms with offices located throughout Massachusetts. Some of the better-known IAs with locations in Massachusetts are Ameriprise Financial, which has offices in Boston and Worcester; State Street Corporation, also in Boston; Morgan Stanley Smith Barney, which has locations in Middleton, Wellesley Hills, Boston, Springfield and Danvers; and Goldman Sachs & Co., with a Boston office. Local, Massachusetts-area based or headquartered IAR firms include Wellington Management Company, LLP in Boston; the Massachusetts Credit Union League in Worcester; and Pat Licata & Associates, Inc. in Boston.

How to Obtain a Stockbroker License in Massachusetts

The Massachusetts Securities Division also licenses broker-dealer firms and stockbrokers in the Commonwealth. Each agent must pass the NASAA Uniform State Law Exam (Series 63) or the Uniform Combined State Law Exam (Series 66) in addition to either the Series 6 or 7, depending on the products the agent will be dealing in.

Continuing education programs must be completed to meet the standards of the Financial Industry Regulatory Authority (FINRA) and to maintain a license to sell securities in Massachusetts. This Regulatory Element of continuing education involves a computer based training program completed shortly after the two-year anniversary of a registered rep’s original licensing date, and every 36 months from then on. Additionally, broker-dealer and investment advisory firms must maintain in-house training programs in what is known as the Firm Element of continuing education so as to ensure their agents stay current on financial products and sales skills.

How to Obtain a License to Sell Life Insurance and Fixed Annuities in Massachusetts

The Massachusetts Division of Insurance handles licensing responsibilities for Commonwealth life insurance producers. With this license, these financial specialists may also sell fixed annuities. Those who wish to sell life insurance and/or fixed annuities in the Commonwealth must pass the Producer’s Exam for Life Insurance after taking the initial pre-licensing course through a Massachusettes-approved provider.

Under Massachusetts law, all insurance producers must fulfill continuing education (CE) requirements in order to maintain their licenses. During the first three-year licensing period, 60 hours of CE must be taken. Subsequent three-year licensing periods require 45 hours of CE to be completed. Prometric provides approved course review and CE materials for Massachusetts insurance providers.

Variable annuities can only be sold by insurance agents that also have a securities license through the Massachusetts Securities Division. Depending upon the financial products one wishes to offer, one must pass either the Series 6 Investment Company Products/Variable Contracts Limited Representative Exam or the Series 7 General Securities Representative Exam. FINRA’s CE requirements apply to sales agents who sell variable annuities, as do the CE requirements of the Massachusetts Division of Insurance.


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