How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lane Your Own Question

Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3694
Experience:  Providing Financial & Tax advice since 1986
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

Do I need to take the series 7 exam or need asponsor become

Customer Question

Do I need to take the series 7 exam or need a sponsor become a Commodities and Forex Broker? I'm interested in becoming an independent Commodities Broker or Forex Broker and to own my own Commodities and Forex company? What exams do I need to take to be a Commodites Broker and Forex Broker of my own company? Do I need sponsors for any of the exams? Also, do I need a Bachelors degree in Business? What is the start-up cost for a Commodities and Forex Broker company? What is the average revenue for Commodites and Forex Broker company? Also, do I need a Bachelors degree in Business?

Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

The series 7 is the (FINRA) general securities exam for reps registered with a broker/dealer and you do need a sponsor for that, and you do not need a degree for that.


The typical stock broker (series 7) that sell stocks, bonds, funds, ETFs any security is the by far more common, and some folks hold both, but the typical series 7 licensed broker has to refer any commodities or futures business to a series 3 licnesed individual.

www.finra.org/



The series 3 exam is the all-encompassing test that is required by the National Futures Association (NFA) and the Commodities Futures Trading Commission (CFTC) in order to be considered a commodities and futures pro.


http://www.nfa.futures.org/



Hope this helps Good Luck!





Forex Brokers (although there are several registration entities within thst (introducing broker, Swap Dealer, Swap Participant, etc etc) are regulated by the Self Regulatory Body NFA, National Futures Association

Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3694
Experience: Providing Financial & Tax advice since 1986
Lane and 9 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.
Thanks for the feedback

And good luck!

Lane



Customer: replied 1 year ago.

I only have to take the series 3 exam for commodities broker? Do I have to legally become a stock broker first to become a commodities broker? What is the start-up cost for a commodities business and what may the revenue or sales be for a commodities business?

Expert:  Lane replied 1 year ago.
That's right.

If you're only going to deal with commodities, you will not need to take the S7 at all.

The sales are completely a function of your activity.

Commissions on trading commodities have come down considerably. In the 1990’s, many commodity brokers were charging in excess of $150 per round-turn. Since about 2005, full-service rates have typically ranged between $30 and $80. Remember, commission rates on futures contracts are paid per contract, not per order.

One thing you might want to consider, is registering as an investment adviser, where you're paid based on the amount of money in the account, rather than on the transaction .

That way, you're interests are aligned with the investor/client ... rather than simply being paid on every contract, regardless of you customers' success.


... Just a thought.


Lane



Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3694
Experience: Providing Financial & Tax advice since 1986
Lane and 9 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Is a financial planner (investment advisor) license required to start hedge fund manager business and investment club in Illinois?

Expert:  Lane replied 1 year ago.

Your licensing depends on the level of assets you manage.

Currently managers that have less than 100 million under management are regulated by their state securities division (Used to be 25 million. Looots of RIAs - all those managing between 25 and 100 million had to re-register at the state level).

AND some states have what's called a de minimus exemption for less than a certain number of clients.

Hang on and I'll check IL for you.

Lane

By the way, if you just set up as an officer of the investment club there's NO licensing required .... BUT if you are charging a fee FOR you investment advice, whether it's a hedge fund, investment club, 401(k) plan or individuals, you havde to register under the investment advisers act.

Hang on and I'll get the IL specific info for you


Expert:  Lane replied 1 year ago.

Here's the information for Illinois (looks like they haven't update the info to the change where the SEC pushed regulation of any advisory firm under 100mil to the states ...

But everything's there ... the forms, filing fees, etc.

http://www.cyberdriveillinois.com/departments/securities/investment_advisers/home.html



If you do go the investment adviser route (which I would advise)... you'll have to develop and ADV (which is essentially your record with FINRA/SEC AND your brochure to the public regarding fees, services offered, etc.

Then you'll have to do a form called a U-4 which is where you disclose all of your personal information (as an advisory rep of your advisory firm).

And yes, as an advisory rep of your advisory firm you'll have to take, and pass, the series 65 test (uniform Investment Adviser Exam).




Once you jump through those hoops and become registered (and they've issued your CRD number, then you will initiate relationships with the institutional side of brokerages, trust companies banks to be the custodian(s) for your investment advisory clients.




Finally, I have two pieces of advice:

(1) Go this route. Doing it this way (rather than becoming a registered rep of a broker/dealer) you are truly representing your clients, rather than representing some broker/dealer (series 7) and working under a real conflict of interest, where you actually owe more allegiance to the B/D than to your clients.

(2) By doing it this way, that CRD number gives you access to all of the institutional shares out there. And DOES NOT (although some custodians tend to talk a lot like broker/dealers) create any allegiance to any specific broker, bank or trust company.

As a matte of fact, of you read the 1940 act (Registered Investment Advisers Act) you owe your client the due-diligence of finding a custodian that best fits their needs.


Some good ones:

TD Ameritrade Institutional
Schwab Institutional
Scottrade Investment Advisors division
Northern Trust
(for self directed IRAs Pensco trust is excellent)
Qualified plans ... Lincoln Trust
Fiedlity institutiional

and there are others





Let me know if you have questions

Lane

If not,positive Feedback (or an “Accept”) would be appreciated. That’s the ONLY way experts are paid!

However, if you need CLARIFICATION, please COME BACK here, AND feel free to bookmark.


Expert:  Lane replied 1 year ago.

As a follow-up here are the designations that will exempt you from having to take the series 65 in Il:

Waivers. The examination requirements shall not apply to any person who currently holds one of the following professional designations:

1) Certified Financial Planner (CFP) awarded by the Certified Financial Planner Board of Standards, Inc.;

2) Chartered Financial Consultant (ChFC) awarded by the American College, Bryn Mawr, Pennsylvania;

3) Personal Financial Specialist (PFS) awarded by the American Institute of Certified Public Accountants;

4) Chartered Financial Analyst (CFA) awarded by the Institute of Chartered Financial Analysts;

5) Chartered Investment Counselor (CIC) awarded by the Investment Adviser Association; or

6) Any other professional designation as the Secretary of State may recognize by rule or by an order under Section 8 of the Act.


For example, I am a CFP, which exempted me from having to take the test in GA.

If you want a rigorous training in all of the areas; Investments, Tax, Estate, Insurance, Finance & Budgeting, Income tax then the CFP is the way to go...

But it you want to get there quickly, do the 65

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.