Can i keep my 7 if i move to a non hybrid RIA

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May 27, 2009 3:42 pm

I am considering moving from a discount brokerage firm to an RIA. The RIA is not hybrid with a B/D.  It is my understanding that since they do not do any B/D business or insurance business , I may loose my series 7 and insurance license. Does anyone know if this is true? Or are thier firms that can "hold" the license? 

May 27, 2009 7:11 pm

You have 2 years to 're-hang' your 7. If you are going with an RIA that doesn't carry a BD relationship, you'll have 2 years to find a place to hang your 7. But, I'd say this... if you aren't going to go back to a commission-based firm, why even worry about it?



Your insurance license is different - you don't need an insurance company, unlike your BD - so, this license can be active as long as you meet your continuing education requirements.



And no.... firms are really against 'holding' a non-producer's license. They (BD's) have been fined by FINRA for 'parking' a license for a non-producer. In fact, most BD firms now require a minimum production requirement EVEN for RIA-affiliated reps that choose to hang their 7 at an affiliated BD. So, if you aren't planning on doing at least $50k in new commissions, you might just cozy up to the idea that the RIA is your best bet. Let the 7 go, and if you don't make it with the RIA, there are others to consider.



Just my take, but you'll find it very difficult (see: impossible) finding a place to hang your 7 without doing any business. And, your NEW RIA will NOT be establishing a BD relationship just to make you happy... that would cause them to be scrutinized on BOTH sides of the spectrum... FINRA, and SEC.... something they most likely don't want to do.



Just my $.02.



C

May 27, 2009 7:20 pm

I appreciate your help this is exactly what I was wondering.  I am leaning towards the RIA route.  I am managing about 550 million in assets and bring is about 50 million a year but its all from existing clients. So i like the idea of working a book and positiong a managed stock portfolio vs our wraped fund product which is very poor. Thanks again

May 27, 2009 9:00 pm

Am I reading that right?  You manage $550mm, and bring in 50mm AUM each year?  Are you adding a zero?  It just seems strange to be managing half a billion and asking about your series 7 license on a blog.