This guide will provide step-by-step instructions on how to become a stockbroker in Iowa by finding sponsorship with a registered broker-dealer firm, taking the proper exams, and becoming registered with the Iowa Securities Bureau and the Securities and Exchange Commission (SEC).
Step 1. Get Your Education
- Get a relevant college degree. Almost all stockbrokers, better known within the finance industry as broker-dealer agents, have a four-year college degree though it is not an explicit requirement for registration.
As a would-be stockbroker, it would be appropriate to hold a degree in accounting, business, finance or economics:
- BA-Consumer and Family Financial Services
- BS-Business/Finance/ Accounting
- BS-Business Administration- Finance
- BS- Economics
- Corporate finance
- Financial planning and forecasting
- Corporate accounting and taxation
- Risk management
- Mathematical modeling
Step 2: Take the Series 7 Exam to Earn your Securities Representative License
Registering for and taking the Series 7 Exam requires you to be sponsored by a broker-dealer firm registered in Iowa. As a licensed stockbroker, your securities license is tied to your sponsoring broker-dealer firm.
- Complete the required forms. As an employee of a FINRA-member firm you will use the Form U-4 Uniform Application for Securities Registration or Transfer. As an employee of a non FINRA-member firm you will use the Form U-10 Uniform Examination request for non-FINRA Members.
- Your employer will submit the appropriate form via the Central Registration Depository (CRD) system along with:
- $40 initial registration fee for Iowa and any other state in which you’ll serve clients
- $85 FINRA registration fee
- Fingerprint card for FBI criminal background check
- $265 Series 7 exam fee
- The fee to take series 63 or series 66 exam is $96 or $128 respectively
- Once your sponsoring firm obtains approval for you to test, you’re registered to take the Series 7 General Securities Representative Examination.
- Schedule the exam through one of the testing locations in Iowa.
- You have a 120-day window to take the exam once you have registered.
- Series 63/66 exam has to be scheduled on a separate day from series 7 exam.
- Your sponsoring firm may help you with the exam preparation by offering or guiding you to resources. Prepare for the test and arrive earlier than your scheduled time.
- These computer based exams show you the results immediately after completion.
You will be licensed as a broker-dealer agent in Iowa after receiving a passing score on all the required examinations (Series 7+Series 63/66).
Step 3: Receive On-The-Job Training
Your employer firm will provide relevant training in the areas of regulation, sales, and ethics in addition to its investment products training. This training would help you in building a client base and recommending the right investment products based on each client’s goals and financial position. The range of investment products this training will cover will likely include:
- Stocks and options on stocks
- Corporate, municipal and treasury bonds
- Variable contracts
- Government securities
- Open-end and closed-end investment company shares
- Corporate equity and debt securities
- Mutual funds
Step 4: Ongoing Requirements for License Renewal and Continuing Education
- Annual License Renewal and Fees
Your license can be renewed using the Central Registration Depository system. Iowa Insurance Division invoices the renewal fee through CRD.
- Continuing Education Requirements
All broker-dealer agents comply with the two-part Securities Industry Continuing Education Program:
- The Regulatory Element
Within 120 days of your second registration you are required to participate in a computer based training session. After that, you’re required to complete this training once every 3 years. The regulatory element covers the subject areas that apply to all stockbrokers such as applicable regulations, ethics, sales practices and compliance. The only variation, if any, will be because of the self-regulatory organization involved.
All series 7 professionals are required to comply with the General Program called S101. The program consists of 4 modules that you can complete in any order:
- Corporate Finance & New and Secondary Offering
- Communication with the Public
- Client/Product Suitability
- Customer Accounts/Trade and Settlement Practices
- The Firm Element
Unlike the regulatory element, the firm element can be different for each individual firm involved. In this element, the firm provides instructions on the investment products, services and business practices unique to the firm. The regulations, risk and other aspects of these products are covered so that you are prepared to weigh product suitability and client preferences.
- The Regulatory Element
- Updating your Form U-4
As a registered broker dealer agent, you have to update your form U-4 whenever there are material changes. Inform your manager and/or compliance supervisor to make the following changes to your U-4:
- Address updates
- Criminal disclosure
- Financial or civil judgments against you
- Pending or concluded disciplinary actions
- Customer complaints
Due to the nature of your work, FINRA maintains a BrokerCheck database accessible to clients that displays information on your Form U-4 as public record.