Interviews - Dave

Location: California
Age: Mid-30s
Profession: Broker
College major: Finance

The Study Method
Dave is a securities professional who took the exam twice in the last 10 years. While making a temporary career change, his license expired, and he was forced to take the exam a second time. Consequently, he had a little bit of an advantage while studying, as he had some clue as to what to expect on the exam. Overall, he felt the experience was positive and did not study countless hours. Dave's study time was average, and his experience is one that the average securities professional should be able to identify with.

Exam Question Recall

  • Sharing gains and losses with clients. He recalls that knowing the difference between full and limited discretionary authority is a good thing to know.
  • Who can a broker borrow money from? The answer is no one, unless the person (a client) is specifically engaged in the regular business of lending, i.e., a mortgage banker or loan professional.
  • Dave remembered a question pertaining to whether a spouse of a client whose name is not listed on the account can enter orders or withdraw funds from an account while their significant other is away. The answer is no. The spouse of an account holder cannot enter an order, or withdraw money if he or she is NOT listed as a signer on an account.
  • Dave also recalled a question about whether an investment adviser can own a stock while issuing a report or advice concerning the equity. The answer would be no, unless there is specific disclosure of such. In addition, it would be unethical (and fraudulent) for an investment adviser to issue a report recommending buying a security, while he/she is selling the equity in his/her own account.
  • He recommended that prospective Series 63 candidates know terms like pegging, painting the tape and churning.


Look Out!

The practice of buying large amounts of an underlying commodity or security close to the expiration date of a derivative. This is done to encourage a favorable move in market price.
An investor writing a put option would practice pegging so that he or she will not be required, due to lowering prices, to purchase the underlying security or commodity from the option holder. The goal is to have the option expire worthless so that the premium initially received by the writer is protected.
Painting the Tape:
An illegal action by a group of market manipulators buying and/or selling a security among themselves to create artificial trading activity, which, when reported on the ticker tape, lures in unsuspecting investors as they perceive an unusual volume.
After causing a movement in the security, the manipulators hope to sell at a profit.
An unethical practice employed by some brokers to increase their commissions by excessively trading in a client\'s account. This practice violates the NASD (now known as FINRA) Fair Practice Rules. It is also referred to as "twisting".

A period of heavy trading with few sustained price trends and little movement in stock market indexes. Another negative result for the client is being stuck with higher tax bills.


  • There was a question about what to do with a complaint, should a customer issue one. The answer would be an agent should immediately notify his/her compliance department, which should then expressly reply to the customer.
  • Dave also remembered a question regarding suitability.

Exam Tips and Tricks
The SEC defines suitability as:

When a broker recommends that a client buy or sell a particular security, that broker must have a reasonable basis for believing that the recommendation is suitable for the client. In making this assessment, the broker must consider the client\'s risk tolerance, other security holdings, financial situation (income and net worth), financial needs and investment objectives.


  • There could also be a question on fictitious quotes and whether they are fraudulent. The answer is yes; they are fraudulent - and also a violation of the USA.

Final Words of Advice
While Dave did not study too much for the exam (one week as he recalled), he thought it would be wise for those planning on taking the test to spend much more time preparing. He also recommended taking as many practice exams as possible.

He stated, "Going into the test confidently will help immensely ... if you find yourself sweating it before you begin, chances are you are not well prepared."

We agree Dave!

Related Articles
  1. Professionals

    Career Advice: Stockbroker Vs. Insurance Agent

    Compare and contrast careers as a stockbroker and insurance agent. Understand the skills and attributes required for success in each career.
  2. Professionals

    Hedge Funds and the Law

    Learn how hedge funds have gotten in trouble for illegal insider trading. Read about questionable high-frequency trading (HFT) strategies.
  3. Economics

    Where Would the Dow Be Without Fed Intervention?

    What would the Dow look like without the accommodative monetary policies the Federal Reserve has implemented since the financial crisis?
  4. Investing

    Breaking Down the Federal Reserve's Dual Mandate

    The Fed has been tasked with a dual mandate by Congress to achieve monetary stability. We explain what the dual mandate is and what it means.
  5. Economics

    Should the Fed Be More Worried About Asset Bubbles?

    While the Fed should be concerned that assets bubbles might impact economic stability, monetary policy is not the best tool to mitigate this threat.
  6. Economics

    What's the 1913 Federal Reserve Act?

    The 1913 Federal Reserve Act was a pivotal congressional act that helped establish the Federal Reserve System as it exists today. It is one of the United States financial system’s most influential ...
  7. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  8. Professionals

    Will Interest Rates Rise at the Next Fed Meeting?

    Everyone wants to know what the Federal Reserve will do next, but the Fed doesn't even know what it's next move will be.
  9. Professionals

    Career Advice: Financial Analyst Vs. Investment Banker

    Read an in-depth comparison about working as a Financial Analyst vs. working as an Investment Banker, two highly prestigious business careers.
  10. Professionals

    3 ETFs to Play the Fed's Interest Rate Decision

    These three ETFs offer strong ways to play the Federal Reserve's decision not to raise rates.
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin ...
  2. Series 6

    A securities license entitling the holder to register as a limited ...
  3. Comprehensive Automated Risk Data ...

    The Comprehensive Automated Risk Data System (CARDS) is an initiative ...
  4. Corporate Financing Committee

    A regulatory group that reviews documentation that is submitted ...
  5. Division Of Reserve Bank Operations ...

    An entity under the Federal Reserve System that manages certain ...
  6. Series 79

    A examination to ensure a candidate is qualified to become a ...
  1. Is there a limit on the number of times I can re-take the Series 63 exam?

    There is no limit to the number of times a candidate may retake the Series 63 exam. The North American Securities Administrators ... Read Full Answer >>
  2. How long must I wait after failing the Series 63 exam before I can take it again?

    Waiting periods are in place for candidates who wish to retake the Series 63 exam. Between retakes, the waiting period is ... Read Full Answer >>
  3. My 120-day Series 63 exam window is about to close, but I need more time to study. ...

    Extensions are available on rare occasions. Candidates should apply for an extension with the North American Securities Administrators ... Read Full Answer >>
  4. Do I have to be a U.S. citizen to sit for the Series 63 exam?

    United States citizenship is not required for Series 63 test-takers. Candidates may take the exam inside or outside the U.S. ... Read Full Answer >>
  5. Are waivers granted to the 180-day waiting period to re-take the Series 63 exam?

    Candidates retaking the Series 63 exam must wait for 30 days after failing it on the first or second attempt. After failing ... Read Full Answer >>
  6. If I failed the Series 66, does the waiting period apply if I want to take the Series ...

    The waiting period only applies to retaking the same North American Securities Administrators Association (NASAA) exam. Candidates ... Read Full Answer >>
  7. How often, and how, is a series 63 exam updated?

    Series 63 exams draw questions from a test bank based on state regulations, the Uniform Securities Act and North American ... Read Full Answer >>
  8. Are series 63 exams given outside of the United States?

    Series 63 exams are offered at authorized testing centers around the world. The exam does not require U.S. citizenship. Test ... Read Full Answer >>
  9. Does NASAA or anyone else give out the series 63 exam questions?

    Outside of the proctored exam, no access to Series 63 exam questions is offered. Providing access to questions would invalidate ... Read Full Answer >>
Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!