Becoming a Stockbroker in Michigan

Securities sales agents are employees of broker-dealer firms, who are sometimes referred to as stockbrokers or registered representatives. Follow this step-by-step guide to become a stockbroker in Michigan licensed by the Michigan Office of Financial and Insurance Regulation.

Step 1. Get Your Education

1. Broker-dealer firms will give preference to individuals with a bachelor’s degree or higher.

   Degrees that are in high demand are:

• BA- Accounting or Consumer and Family Financial Services
• BS-Finance or Business
• BA-Accounting
• BS-Finance or Business Administration
• MBA

Discuss your educational goals with an advisor. Explain the need to enhance your sales abilities, as well as become an expert on securities and investment markets. Courses that an advisor may recommend include:

• Business law
• Finance
• Business communications
• Quantitative applications of business
• Statistics
• Taxation
• Accounting, especially financial and managerial accounting
• Economics
• Behavior of groups, organizations, and persons
• Business ethics
• Marketing

Step 2: Take all Required Exams

1. Obtain sponsorship from a broker-dealer firm. The Series 66 and Series 63 state law exams do not require broker-dealer firm sponsorship; however, the Series 7 Exam does. In order to locate a broker-dealer firm to sponsor you for the Series 7 Exam, contact one of the firms serving residents in your area to request an interview.
2. Register for all required exams.

   For registered reps of Non-FINRA member firms:
   Complete Form U-10, Uniform Examination Request for non-FINRA Members.

   For registered reps of FINRA member firms:
   Complete Form U-4 Uniform Application for Securities Registration or Transfer. The application consists of a questionnaire detailing your personal information, education, work experience, and any criminal history.

   Upon completion, the broker-dealer firm is required to submit the form through the Central Registration Depository (CRD).

• The firm will usually pay the $85 FINRA registration fee on your behalf
• The sponsoring broker-dealer will pay the initial $65 registration fee in Michigan.
• FINRA registration requires a fingerprint card for all applicants. Contact your local sheriff’s office or police station for appointments and fees. FINRA will charge a fee of $30.25 to process your fingerprint card.

After the firm has successfully submitted the application, they should receive a confirmation that you’ve been approved to take the Series 7, General Securities Representative Examination.

The Series 63, Uniform Securities Agent State Law Examination is the most common state law exam for prospective brokers. You may be instructed to take the Series 66, Uniform Combined State Law Examination, but a majority of broker-dealer firms prefer the Series 63 Exam.

Schedule both exams through one of the Michigan exam locations. You have four months from the initial registration date to schedule these exams.

Take time to prepare for the exams using resources provided by your employer. You will be notified of your score as soon as the exams are complete.

Step 3: Get Your On-The-Job Training

Embrace the opportunity to acquire the skills and training necessary to become a successful registered representative.

Training with the new firm will educate you on the processes involved in recruiting potential clients. Training will also provide a good deal of experience working with the following products:

• Direct participation programs like non-publicly traded real estate investment trusts or oil and gas leases
• Mutual funds
• Stocks
• Open-end and closed-end investment company shares
• Variable contracts
• Corporate, municipal and treasury bonds
• Options on stocks
• Corporate, municipal and treasury bonds
• Government securities

Step 4: Ongoing Requirements for License Renewal and Continuing Education

The annual renewal fee in Michigan is $65, paid by your employing broker-dealer firm through the Central Registration Depository on the anniversary of your initial registration.

Continuing Education Requirements
Continuing education modules are developed by the Securities Industry Continuing Education Program in concert with the Financial Industry Regulatory Authority (FINRA) has developed continuing education modules for registered representatives. This program breaks the areas of focus down in to two elements:

• The Regulatory Element
  The first Regulatory Element Training Program must be completed within 120 days after the second anniversary of your initial registration. Once every three years thereafter for the remainder of your career you are required to complete Regulatory Element training, as it is frequently updated to reflect industry changes.
  You must complete all four sections of the S101 General Program training requirements. This is mandatory for Series 7 Examinees. These sections are:

• Handling Customer Accounts/Trade and Settlement Practices
• New and Secondary Offering & Corporate Finance
• Communicating with the Public
• Client/Product Suitability

• The Firm Element
  Mandatory training is developed by the compliance department within each firm in accordance with recommendations handed down by FINRA through the Firm Element Advisory. An annual internal review will determine the specific training that is required, which will always incorporate the following topic areas:
  • Investment features and associated risk factors
  • Regulatory requirements related to products, services, and strategies
  • Sales practices and suitability standards

Updating your Form U-4
If a change should be made to any of the following information, notify your compliance department and update the Form U-4 immediately:

• Address updates for home and office
• Criminal charges and dispositions
• Civil judgments that are entered against you
• Pending and completely discharged disciplinary actions
• Customer complaints
• Financial judgments entered against you

Be sure that FINRA’s BrokerCheck contains accurate information about you. It is available to assist potential clients in researching broker-dealer firms and their registered representatives.