Broker Check

Qualified Or Unqualified. What’s the Difference?

| August 17, 2015
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What makes your advisor qualified to help you with your investments?  It’s a question that you may not think to ask very often.


By whatever means you determine you want to work with a particular investment professional, I would imagine that checking their credentials does not always top the list.  If the potential advisor you are considering to handle your wealth seems knowledgeable and doesn’t give you a “bad vibe”, you may start to trust their judgment. When it comes to placing your hard-earned money into the hands of someone else to grow and protect your wealth, it is critical that they are qualified to serve you.  Don’t be afraid to ask questions!

Earlier this spring I was given the opportunity to test my knowledge of investments, and the laws that govern them, by taking the Series 7 licensing exam. This six hour, 250-question exam is administered by the Financial Industry Regulatory Authority, (better known as FINRA) and requires a passing score of 72%.   It covers topics ranging from all types of investment securities to permitted trading practices (such as margin accounts, options and stop/limit orders) to prohibited trading practices (such as insider trading, churning and selling away) to current laws designed to protect investors – and everything in between.   When passed, the Series 7 license allows an investment professional to trade all publicly-traded securities for his clients.

The ability to make recommendations on any publicly-traded security gives the advisor a great deal of flexibility in what he/she can ultimately suggest to the client.  Without this general securities license, it is difficult to prescribe investment solutions to the client if the advisor is not allowed to offer a complete range of investment choices & strategies.  It is simply unethical to give advice to an individual without securing the proper licenses to do so.

While I knew that the exam was a key requirement as a wealth advisor to do my job effectively, I never considered its value from a client’s perspective:  protection.

The Series 7 license holder is required by FINRA and the SEC to complete continuing education in the investment field each year in order to maintain his license. For clients, this means that the advisor is required to stay up-to-date on all regulatory, ethical, and sales practice standards established by the six different governing bodies that oversee their advisors; or to be more specific, their qualified advisors.   When clients know their advisor is Series 7 licensed, they should be able to feel more confident that their advisor has been trained and certified to be competent in their field.

At SRQ Wealth Management, attaining and maintaining all the necessary licenses to be qualified to offer our clients a comprehensive wealth management experience is part of our Standard of Care.  I feel fortunate to be part of this well-qualified team and look forward to serving our clients with quality investment advice for many years to come.   

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