You have to "hang" your license somewhere at a registered FINRA firm. Many prop firms as well as RIA's and other brokers will allow you to hang your license at their shop provided that you pay for the cost and have a clean u-4 (your public record document/form is a U4). IIRC the cost is ~$200/year. Once you let your FINRA license expire (two years after your sponsoring firm stops carrying you) then you have to not only take the test all over again but you have to have a firm sponsor you - this is not something you can just take on your own. If you are considering leaving your firm and leaving on good terms why not ask them to keep your license for you if you pay the costs associated?
independant what? i was told that it is illegal and they will not do it. theyre response was that if i am not employed there i cannot be registered with them.
Most firms will still expect you to maintain your E&O at about $2k/year plus do a minimum amount of production per year. That minimum varies per firm. Most firms nowadays would not do it.
better than what? but either way if youre not registered in any states or with any firm for two years it expires as well... on tuesday i will call finra, i just got back in this evening from trip. havent had an opportunity to contact them.
Depends on the firm's moral standards I heard that most of the props that allowed licenses to be "hung" at their firms required that you work there first..and I would guess that any others have gone bust. (I may be speaking out of turn here since I just registered on ET, but just thought I'd put in my 1 cent.)
How about once every 1.5 years, you get an itch to go back to prop trading, register with a shop that requires your licenses and doesn't have a capital lockup. Then, a short while later, you reconsider and close your account.
Just like cubsguy81 said: Become an independent, private trader and trade your own money. If you're going to be dependent on a brokerage firm and prop establishment so you can trade their money, then go get your license renewed. Work for yourself or work for someone else. You decide.
i am trading my own money, that is why i am asking how do i go about not losing the license... since i am not affiliated with a firm it will expire/lapse.
Ok, I have my S7, 66 and Life & Health. As for your S7, if you leave a FINRA (Fine-ya...LOL!) member firm, you have two years to go back to another member firm before you lapse and have to re-take the ignorant thing. While you hold a S7, you have to complete regulatory element exams (more ignorance) every third year, and firm element every year. This year's flavors were anti-money laundering, compliance issues, marketing to seniors, etc., for firm element. As for regulatory element, you will have to go to some place like Prometrics, and sit in front of a computer answering ignorant regulatory stuff for 4 hours. Oh yes, if you don't get the answers right to about 80%, you get to re-take the ignorant mini exams all over again. The REALLY sad part is the FACT that you get to do all this ignorant regulatory stuff so you basically are at least "competent" enough to solicit general securities sales. That's what the S7 is all about. What you can and cannot do, along with rules and regs you have to memorize. Why do you need to know the ___ ____, and ____ investment act years they were passed???? LOL!!!! Who knows. What you will NOT learn from all of this ignorance is how to make money for people; how to NOT lose their asses in the markets! You will NOT learn how to trade. You will NOT get a test question about market psychology, elliot wave, etc., It's really sad. Can you imagine a doctor graduating from Med School and not knowing anything about how the human body works, but is allowed to write prescriptions? Welcome to the Series 7! LOL!!!!!! As for E&O, yes you'll have to pay that, and it's about $2,000/yr. In addition, technology fees for your clearing/trading platform about another $2,000/yr (if you're an Independent Broker and Investment Advisor Rep like me) Like one poster said, you can't just take the S7. You have to be sponsored by a member firm. So, it's not as easy as it sounds to "go take the S7 and all is good." You'll have to do the above, as well as find a firm that has no major production requirements. (they're out there. Get Registered Rep magazine, and look in the back. You'll have a ton of B/D's in there touting low production requirements.) What's in it for the B/D? They'll probably put you on a 70-90% payout (if you go to an Independent firm). That means if they have a low production requirement, and you produce $50,000 in a year in commission's, the firm gets to keep anywhere from $5,000-$10,000 off the top. In addition (they won't tell you this), they'll probably get a point from investment companies for "due dilligence." That means if you put $100,000 in a Private Placement that pays 8%, the firm really receives 9% total. Out of that, you'll get to keep anywhere from $5,600 to $7,200. The firm will get to keep anywhere from $3,400 to $1,800 depending on your payout. There are 150 Independent Brokers and IAR's at my Firm. The average guy's doing $210,000. That takes into account the one's doing $50,000 and averaging them with the top few who do several million per year in production. To make it simple to show you why I'm on the wrong side of the business, I'll use simple math that doesn't take into account the Firm's salaries for 10 office staff, 2 compliance officers, etc., If every Broker was on a 90% payout, the B/D would make $3,150,000 per year based on 150 Brokers doing an average of $210,000 per year. Now if you go to a captive firm (run!!!!!!!!) like Merrill Lynch-ya, Organ Stanley, JP Organ, etc., you're going to be on a 40-50% payout. Sure, they'll pay your E&O, and all other registration fees while they rape you. Oh yes it's true, they'll take more than half the money, AND tell you that the Clients you thought were yours are really theirs!!!!! The second you leave, there will be 25 Brokers in your office calling YOUR Clients telling them you left, and they're going to "help them" with their account. Again, run away!!!!!!! The days of captive firms being even semi-professional are long over with. As for the prop firms, I have no clue how they are structuring their payouts. Never gone that route. At least there you have a fighting chance of learning how to trade though! LOL! I'd recommend you find a Firm with LESS than 150 Brokers as the more they have, the less time they're going to have for you. It's all about the bottom line, and the B/D's are looking for numbers of Brokers just like you'll be looking for numbers of Clients. (Or small numbers of Clients with multi-millions.) Good luck to you!