FINRA/NASAA Licensing 101 - Ken Finnen

February 13, 2024

2024, A New Year of Financial Industry Transition - FINRA/NASAA Licensing 101 - an interview with Ken Finnen

From the desk of Stephen Kohn, Founder and Chair of Financial Professionals Coalition (www.finprocoalition.com) and a 25-year veteran owner of a FINRA broker-dealer, a, former member of FINRA’s National Adjudicatory Council and a Former Governor on FINRA’s Board. 

The Financial Professionals Coalition, Ltd. is a diverse resource for over 1.2 million registered representatives, associated persons, traders, bankers, back-office staff, and owners of broker-dealers and registered investment advisors. The Coalition provides courtesy consultations with industry experts. Membership is free.

Despite the 2023 turmoil of consolidations, hirings and firings, people are still lining up at the door to get into this crazy business.  The Coalition introduces its Founder who is a top-level, licensing exam preparation specialist. This is the second topic in a series of introductions.

Introducing Coalition Founder, Ken Finnen.

Kenneth Finnen is an executive with 35 years of experience within the financial services industry, and nearly two decades of expertise in managing the compliance and regulatory functions of broker-dealer and investment advisory firms.

In addition, Ken is the Founder and CEO of Capital Advantage Tutoring, a  firm specializing in the preparation for financial licensing exams. His firm runs the #1 FINRA and NASAA examination prep channel on YouTube, and they have over 15,000 active members who benefit from their expertise.

Ken began his career as an equity trader on the floor of the New York Stock Exchange working for a variety of firms, including Credit Suisse and Bank of America. He currently holds the following FINRA licenses: S3, S4, S7, S9, S10, S14, S25, S57, S63, and S66.

1.     As a former Chief Compliance Officer at a small Broker/Dealer, what do you see as the greatest supervisory challenge facing the small firm community as a whole?

Ken:  “I think the biggest issue within the small broker-dealer world is that a lot of the regulations are cookie cutter and they're more geared toward the big firms who have a lot more resources and can handle these problems with their compliance team.  I had one or two people in my compliance department, and if we ever had a big problem, it took all of our resources, and other items fell by the wayside.  FINRA expects smaller firms to be able to handle everything as efficiently as larger firms.”

2.     Has the current regulatory environment contributed to the number of small firms terminating their FINRA and/or SEC membership/registration? 

Ken:  “I absolutely think the new regulations and requirements have made it too cost-prohibitive for smaller firms to stay in the game.  Especially the financial burden.  There are a lot of reports, balance sheets, and net capital calculation treatments that are made for the big firms that absolutely do not apply to the small firms and sometimes it's just not worth it to keep fighting.”

3.     Have you seen a greater-than-usual interest in individuals aspiring to qualify for industry licensing?

Ken:  “It's been pretty consistent. I'm getting busier because of my social media channels and referrals, but it's pretty consistent.  I have seen more older people coming into the business and taking the Series 65 as a career change.  The younger people are about the same but I've seen a lot more older people coming in which is great to see.”

4.     Has the SIE requirement put a damper on the number of potential industry entrants?

Ken:  “No, not at all.  The SIE has actually increased the ability for people to take the exam while they're still in college, which I love, since you don't need a sponsor for the SIE Exam.  I tell all the college kids to take it early.  College professors are starting to tell people to take it before they even apply for jobs; it looks great on their resume.” 

5.     What is the most “popular” license that people are seeking?

Ken:  “I think the most popular one has always been the Series 7 Exam.  I get a lot of questions about the SIE Exam, but I usually tell them they can do it on their own or use my YouTube channel as a great resource.  I would have thought this Series 6 would have been more popular but it is and always will be the Series 7, the king of the tests.”

6.     Have you experienced an increase in the number of licensed individuals seeking additional licenses and if so, which ones?

Ken:  “The one exam I'm getting a lot more inquiries about is the series 65.  As I said before, a lot of people in their 30s, 40s, and 50s are changing careers.  The only worry I have is a lot of them are taking jobs where it’s commission only, "eat what you kill," and it's a tough road.  If you don't already have a pipeline of people who can give you business, you can go 7 or 8 months without earning a dime.  I try to be very clear on what they can expect and how long it will take to be self-sufficient.  Some of the more experienced ones who want to branch out and start their own firm I send to the Coalition for advice and guidance.”

7.     What are the biggest hurdles Test takers run into?

Ken:  “One of the biggest hurdles is lack of time; either they’re given a very tight time frame, like two to three weeks to study for each exam, and they have to work all day.  Some of them have kids, or they have sick family members, or they just work 18-hour days, and they have no time to study.  Many firms put a lot of pressure on them to get it done quickly but don't provide the proper resources to do this.  They give them a book and leave them alone, that's part of the reason I created my YouTube channel.  I provide a free resource to everyone so they can get questions answered during my weekly live Q&A's or just find one of my videos and learn what they need to know to pass the test.”

8.     What could FINRA/NASAA do to help candidates pass the exam? 

Ken:  “The biggest pet peeve of mine is one has to work for a broker-dealer to take it.  I think exams should be unsponsored because that would help underserved communities that just don't have connections to get a job.  Some of these people have to take less-than-ideal jobs just to get sponsored. I love that the coalition wrote a letter to FINRA requesting just this.

“On a realistic level, the feedback unsuccessful test takers receive after the test should be more detailed. If someone passes the SIE exam, they should at least let them see their score( with feedback) so they know if they barely passed or at least where they are weak.  This would help test takers be more prepared for the next exam.”

Join the Financial Professionals Coalition, membership is free, as is access to Ken Finnen’s expertise, in addition to a vast array of referral resources.

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The Financial Professionals Coalition, Ltd. is a diverse resource for over 1.2 million registered representatives, associated persons, traders, bankers, back-office staff, and owners of broker-dealers and registered investment advisors. The Coalition provides courtesy consultations with industry experts. Membership is free.

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