Becoming a Stockbroker in Washington

Securities sales agents, who are sometimes called stockbrokers or broker-dealer agents, work for broker-dealer firms selling securities to retail investors.

To become a stockbroker in Washington, you will need to be licensed by The Washington State Department of Financial Institutions Division of Securities and registered with a self-regulatory organization (SRO), the largest and most influential of which is the Financial Industry Regulatory Authority (FINRA).

Follow this step-by-step guide for specific instructions on how to fulfill broker-dealer firm sponsorship, examination, and registration requirements in Washington.

Step 1. Get Your Education

1. Becoming sponsored by a Washington state-registered broker-dealer firm is a prerequisite to fulfilling exam requirements. When considering you for sponsorship, broker-dealer firms will give tremendous weight to your education, and some will require a bachelor’s degree at minimum.

   The following are among some of the more popular specialized degrees held by stock brokers:

• BS-Business/Finance
• BA-Accounting
• BS-Finance
• BA-Entrepreneurship
• BA-Management and Operations

Courses in business, sales, finance, and economics will be highly relevant to your career as a stockbroker:

• Business economics
• Finance/financial management
• Investment analysis
• Business law
• Business ethics
• Financial markets
• Financial services
• Statistics
• Sustainable development
• Business administration
• Accounting (such as financial or managerial)

Step 2: Take the Required Exams

1. Washington state exam candidates must be associated with a sponsoring broker-dealer firm that is currently registered in the state before taking securities exams such as the Series 7. Find a broker-dealer firm in the state willing to sponsor you by searching online, contacting professors and fellow students, and networking with professional groups. State law exams such as the Series 63 can be taken without first becoming sponsored.
2. Your sponsoring broker-dealer firm’s compliance department will help you complete the Form U-4, Uniform Application for Securities Registration or Transfer.

   Your sponsoring firm will file this application through the Central Registration Depository (CRD), which will be funded to cover the following fees:

• FINRA’s $85 processing fee
• Exam fees of $265 for the Series 7, $85 for the Series 6, $96 for the Series 63, and $128 for the Series 66
• The Washington State Department of Financial Institutions Division of Securities initial filing fee of $40
• Registration fees for all additional states in which you will retain clients

The application will register you for the required exams:

The Series 7, General Securities Representative Examination

AND

The Series 63, Uniform Securities Agent State Law Examination OR the Series 66, Uniform Combined State Law Examination.

When your application is approved you will have 120 days to schedule the exams through one of the testing locations in Washington, which include Prometric Testing Centers in Mountlake Terrace and Puyallup, and Pearson Professional Centers in Renton, Seattle, and Spokane.

Practice tests and study guides are available through FINRA, as well as from your sponsoring brokerage firm. Arrive one hour prior to test time on your scheduled day.

Scores will be presented immediately upon completion of each exam. You will be licensed as a Washington state broker-dealer agent once you have passed both exams required by the Washington State Department of Financial Institutions Division of Securities.

Step 3: Get Your On-The-Job Training

Your employer has a vested interest in seeing to it you acquire the sales skills and product knowledge necessary to solicit and retain clients, and to align them with suitable investments. Your employer will provide on-the-job training that supports the firm’s investment philosophy and sales protocols. This will involve verbal and written instruction, observation, and demonstration through job shadowing and classroom based teaching. Product knowledge training will expand on the securities covered in the Series 7 Exam:

• Stocks
• Registered options
• Commodities
• Mutual funds
• Variable contracts
• Investment company products
• Direct participation programs
• Government securities
• Corporate, options and municipal securities
• Insurance premium funding programs

Step 4: Keep Your Registration Current with Continuing Education

1. Annual License Renewal and Renewal Fees
   Every year on December 31, your broker-dealer agent license in Washington expires. It is the obligation of your firm to pay the $20 renewal fee owed to the Washington State Department of Financial Institutions Division of Securities through the Web-CRD (Central Registration Depository) system before your license expires each year.
2. Continuing Education Requirements
   All Washington stockbrokers must complete continuing education in two parts. These elements together comprise the Securities Industry Continuing Education Program:

• The Regulatory Element
  This component must be fulfilled within 120 days of your second license renewal, and then every three years thereafter.

  The S101 General Program is designed for Series 7 license holders. The four units making up the S101 program are focused on regulatory standards, compliance, and sales practices in the context of ethical concerns in the following categories:

  • Public communications
  • Suitability of client to product and vice-versa
  • Corporate Finance/New and Secondary Offerings
  • Trade and Settlement Practices and Handling Customer Accounts

• The Firm Element
  Your firm delivers this component of continuing education annually to cover:
  • Regulatory updates
  • Investment changes/modifications to products
  • Sales protocols

Updating your Form U-4
You must report any changes to information on your Form U-4 to your firm’s compliance department within 30 days of these changes occurring:

• Changing residences
• Getting married, divorced, or becoming widowed (name changes)
• Having disciplinary actions taken against you
• Customers lodging complaints about you
• Having civil judgments filed against you
• Having financial judgments filed against you
• Criminal activity or disclosures

Your Form U-4 information is available to the investing public at all times through FINRA’s BrokerCheck database.