The pain of taking the Series 7 exam isn't just for brokerage employees anymore; now more bankers are taking the test.
Bankers wanting to sell securities are clamoring to pass the exam, a requisite for the coveted "registered representative" title.
"Banks have been in (securities sales) for a while, but they're looking for a level playing field," said Barbara J. Simmons, president and chief operating officer at Investment Training Institute-Nash Inc., Tucker, Ga. "With Glass-Steagall coming down, more bankers are taking the Series 7 or upgrading from the Series 6."
The demand for training has become so pervasive that Ms. Simmons once received separate calls from different divisions at one institution- NationsBank Corp., Charlotte, N.C.
Bank regulators require anyone who sells investment products to have a Series 6 or 7 license. The Series 6 license lets dealers sell mutual funds and annuities, but the Series 7 allows for sales of all kinds of securities, including stocks, bonds, and options.
The six-hour Series 7 exam was developed by the New York Stock Exchange and is administered by the National Association of Securities Dealers.
More than half a million people are registered representatives, or one for every 520 Americans. Last year alone, nearly 30,000 registered reps entered the market, according to the National Association of Securities Dealers.
While the NASD does not track the percentage of registered reps who are bankers, anecdotal evidence, at least, indicates that bankers increasingly seek the title.
At the New York Institute of Finance, bankers comprise 20% of the students, a 7% increase from a year earlier, said president Robert Gulick.
"I attribute it to the changes in section 20," allowing banks to use up to 25% of their capital for securities underwriting (up from 10%), said Mr. Gulick. "We tell people, 'If you want to collect credentials, go to college; if you want to make money, come to us.'"
And Ms. Simmons' company, which traditionally served brokerage trainees, now gets 40% of its business from bankers aiming to pass Series 7 or Series 6 exams, she said.
"There are some banks that have a good Series 6 platform. The purpose of the platform is to handle small transactions and refer up to Series 7 salespeople the larger business," she said. This so-called hub-and-spoke system is used by her largest client, First Union Corp., Charlotte.
Still, she added, "I see this trend changing somewhat, with Series 6 people upgrading to Series 7."
Series 7 study plans typically range from 80 to 100 hours. (Series 6 preparation takes about one-third that time.) Most bankers work full-time while taking the courses, which are often led by teachers dispatched to the bank.
By contrast, full-service brokerages prepare new hires for the Series 7 exam almost immediately, offering intensive course work either in-house or through contractors, said Margaret Draper of the Securities Industry Association, New York. "There are a number of variables, depending on the size of the firm," she said.
Beyond brokers and bankers, even the companies that serve banks are jumping into the licensing boom. "As a mutual company, as long as you stay in mutual funds and annuities, you're fine with the Series 6," said Bruce D. Barton, president of Delaware Distributors LP, Philadelphia. "But as soon as you get into another area, (the Series 7) is necessary."
Indeed, early next month, Delaware will complete an acquisition of Voyageur Fund Managers, a Minneapolis firm with a product whose sale requires a Series 7 license.
"Voyageur specializes in UITs, unit investment trusts, which are annuity accounts that are treated like securities," said Mr. Barton.
For still others in the industry, titles and training go beyond even the Series 7. The designation "certified financial planner," or CFP, has drawn interest among bankers, said Judith W. Lau, president of the Institute of Certified Financial Planners, which has 34,000 members. "It's a way for them to gain credibility" in a hotly contested field, said Ms. Lau.
After all, she argued, CFP is a recognizable symbol showing a planner's understanding of banking, estate planning, insurance, and investment and tax matters.
"This business has changed, and as more industries get into financial planning, they're going to need this," she said.
