Are you interested in selling variable annuities? If so, the license required to sell variable annuities differs depending on where you live.
All individuals selling annuities and other investment products must have a Series 6 or 7 securities license issued by the Financial Industry Regulatory Authority (FINRA). Additionally, you may need an insurance license in some states or jurisdictions, as annuities are an insurance product.
Learn more about the specific requirements and steps you need to take to obtain the licenses needed for selling variable annuities in this guide.
What Licenses Do You Need to Sell Variable Annuities?
You must obtain the appropriate licenses, and you may need to register with the SEC to sell variable annuities. Below are the licenses you may need to obtain to sell these products. However, verifying the specific requirements in your state or local jurisdiction is essential.
1. Series 6 or Series 7 Securities License from FINRA
All individuals selling annuities and other investment products must obtain a Series 6 or 7 securities license from FINRA. You must first pass the Securities Industry Essentials exam to take either exam. You must also be employed by a FINRA member firm or be a member of an authorized self-regulatory organization.
The Series 6 license, also known as the Investment Company and Variable Contracts Products license and allows you to sell variable annuities, mutual funds, and other financial investment products. However, the Series 7 or General Securities Representative license allows you to sell a broader range of products.
2. Insurance License
In some states, individuals selling variable annuities may also need to obtain an insurance license. You can check with the department of insurance in your state to determine which insurance license you need.
For example, in Texas, you must obtain an insurance license through the Texas Division of Insurance. Agents wanting to sell variable annuities after January 2022 must also pass the Annuity Best Interest 1 or Annuity Best Interest 4 exam and maintain registration with FINRA.
3. Additional Requirements for People Selling Variable Annuities
If your state requires you to obtain an insurance license, you must complete a federal background check and fingerprinting. There may be other steps you need to take before or after taking your insurance exam and documentation that you must submit to the insurance division.
In addition to the requirements above, you may need to register with the federal Security Exchange Commission (SEC) and a state-level securities commission in some states. In most states, you must also complete continued education (CE) requirements and adhere to the laws for individuals selling securities.
Failing to maintain memberships with the appropriate agencies and completing the required CE can cause you to lose your ability to sell annuities and may result in you or your firm being ticketed, fined, or charged with a crime. Your license may also get revoked if you do not comply with all standards for people selling annuities.
Why Do Some State Require Insurance Licenses to Sell Annuities?
The insurance division in many states requires an insurance license for people selling investment products or assets that insurance companies offer. Annuities are popular for people looking to diversify their retirement investment portfolios. However, they are most commonly obtained through an insurance agency, and therefore, they fall under the jurisdiction of the insurance division.
What Education Do You Need to Sell Variable Annuities?
In most areas, insurance agents do not need a college degree. However, the division of insurance in your state may require you to take a course and pass basic insurance and securities exams before you can obtain licenses to sell investments and annuities.
If you already have an insurance agent or broker’s license, the requirements may differ from those for individuals getting licensed for the first time. So, you must contact the division of insurance in your state to determine the specific requirements for someone with your credentials.
Final Advice on the License Required to Sell Variable Annuities
In many states, several licenses are required to sell variable annuities. After obtaining the appropriate licenses, staying up-to-date on the latest industry standards, laws, and education requirements is essential.
States may change the process, testing, and requirements necessary to sell variable annuities at any time. Failing to adhere to the latest regulations can cause you to lose your ability to sell insurance products, including annuities.
No matter where you live, you must follow the guidelines by FINRA and obtain a Series 6 or 7 license for people selling annuities. You must also maintain employment with a FINRA member agency or a FINRA-approved self-regulatory organization.
For help with other investment topics, like investing in funeral home stocks, read the other guides on our site.