| This newsletter has been developed to | | | | services professionals are other ways to |
| provide insights into the operation of | | | | describe an RIA. Insurance Agents are |
| the financial services industry, and to | | | | licensed by individual state Departments |
| help individual investors make decisions | | | | of Banking and Insurance. If the agent |
| concerning the type of advisement that | | | | sells variable products, such as |
| best suits their needs. While there are | | | | variable annuities or variable universal |
| many professionals who provide | | | | life insurance, they must also have an |
| investment advice in one form or | | | | NASD License. |
| another, there are certain credentials | | | | The NASD has many licenses, but many |
| and licenses financial professionals | | | | professionals have at least a Series 65, |
| should possess before you entrust them | | | | which is an NASD license needed to be a |
| with your savings. We will explore the | | | | Registered Investment Advisor in many |
| various licenses and certifications to | | | | states. This is the minimum, short of |
| determine which type of professional | | | | having no license at all. In order to |
| might be best suited to your needs. | | | | be a Registered Representative, the |
| Financial Advisor, Financial Consultant, | | | | minimum license needed is a Series 6 |
| Investment Advisor, Financial Planner, | | | | from the NASD. This entitles a |
| Registered Representative, Stock Broker, | | | | Representative to sell mutual funds, and |
| Variable Products Agent or Insurance | | | | obtain an affiliation with a securities |
| Agent are many of the terms used in the | | | | firm. An insurance license to sell |
| financial services industry to describe | | | | variable products enables the |
| the professional duties performed. Fee | | | | representative to also provide variable |
| based or commission based compensation | | | | annuities or variable universal life |
| are terms which get thrown into the mix, | | | | insurance. |
| causing client confusion. In reality, a | | | | In order to advise and transact stock, |
| licensed professional can have all of | | | | bond, REIT and limited partnership |
| those titles, perform all of those | | | | sales, as well as mutual fund, ETF's, |
| services, which we just identified, and | | | | variable annuity and variable universal |
| work in a fee or commission based | | | | life sales, a Registered Representative |
| capacity with a client. | | | | needs to attain a Series 7 license, as |
| The National Association of Securities | | | | well as a variable life license. By |
| Dealers (NASD) is one of the | | | | obtaining a Series 63, disclosing all |
| associations which self regulates the | | | | investment advisement relationships to |
| securities industry. The Securities and | | | | their broker/dealer and by registering |
| Exchange Commission (SEC) is the | | | | with their state Bureau of Securities or |
| government agency which oversees the | | | | the SEC, if assets are over 25 million, |
| NASD and the exchanges, such as the New | | | | a registered representative can have a |
| York Stock Exchange (NYSE). The NASD | | | | dual registration as a Registered |
| licenses Registered Representatives, | | | | Representative and Registered Investment |
| while the SEC or individual state | | | | Advisor. Once this stage has been |
| bureaus of securities register | | | | reached, an Investment Advisor can |
| investment advisors (RIA). Financial | | | | demonstrate to a client whether fee |
| Planner, Financial Consultant or other | | | | based or commission based compensation |
| terms used to describe financial | | | | is best for the client. |