Series 6 Difficulty Level: High, Low, or Just About Right?

FINRA’s Series 6 Exam difficulty level needs some explaining. It is among the shortest of FINRA’s myriad licensing exams, but packs a punch. In the post below, we unpack some of the main components that present challenges to our students. If you need to take the Series 6 Exam for your job, a quick glance below might be just what you need.

Annuities vs. Life Insurance

A big focus for the Series 6 Exam is on retirement plans, and other products used to plan for retirement or protect against mortality risk. In other words, annuities, variable life insurance, 401(k)s, IRAs, among others, are all covered. While each of them on their own are fairly straightforward to remember, trying to remember them all at once tends to trip people up. The best way to approach these is to make flash cards, or a study sheet. As a Series 6 tutor, we highly recommend that you write out their definitions and two or three key points for each. You don’t need to write down everything. As long as you know a few points about each, then you can eliminate enough in a multiple choice question to effectively answer a question. For instance, know the difference between a qualified vs. non-qualified retirement account. Also, know the difference between variable annuities vs variable life insurance. Once you have the basics, go a little deeper and it will start to come together.

Suitability

We also see another area that trips people up quite frequently. Suitability.

Series 6 Suitability questions are not too different from Series 7 suitability questions. The overall goal is to identify the most appropriate investment for an investor after being given the situation, goals, or temperament, of the investor. This section also inadvertently tests your knowledge on products. For example, you need to know that someone hoping for “growth” may prefer variable annuities to fixed annuities. Variable annuities have exposure to stocks through the separate account, for instance. In other questions, you may need to know whether it’s more suitable to hold a short term, or long term bond when interest rates are falling – Hint: long term bond. This requires knowledge of whether long term bond prices move more than short term bond prices when rates change.

All in all, the suitability section adds another layer of complexity to the Series 6 difficulty level. To determine suitability focus on a few main areas:

1. Investor’s age
2. Goals
3. Emotional language (e.g., concerns, worries, etc.)
4. Situation (e.g., retired, single mother, wealthy saver, etc.)

Run down this list for every question, and it should help steer you to your answer.

Rules, Rules, Rules

Lastly, like most other FINRA exams, there is no shortage of rules to know. Fortunately, many will overlap with some of the ones you learned from the SIE Exam. For example, Rule 147, Rule 144, SEC Act of 1933, SEC Act of 1934, Investment Company Act of 1940, among many others are included. Your best bet for learning the rules is to make yourself a study sheet. The most effective study sheet only includes terms, definitions, and dates that you continue to forget.

Important: Don’t include terms and definitions that you already know.

The reason for this is that your study sheet (or flash cards) will get too large and daunting. Most people don’t even want to look at a study sheet that is 90 pages long. You might as well read the textbook at that point. Stick to what you know you don’t know! Aim to memorize about 10 words a day, and increase that number if you believe you can get through more. However, we don’t recommend that you try to jam in too many. It’s better to know 20 or 30 cold, than it is to roughly know 40 or 50. The former ensures that you will be able to confidently identify, or eliminate, certain options from multiple choice questions.

Overall, the Series 6 difficulty level is somewhat comparable to the SIE exam difficulty. Both tests are certainly digestible, but require enough memory work to weed out anyone not willing to put in sufficient effort. It takes most of our students about 1 to 1.5 months to study for the exam. Put in the required work, and you’ll be on to your next exam in no time. If you need some help to get there, book a tutor. Either way, good luck!