Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

What must Series 6 representatives avoid selling?

1. Municipal bonds

2. Exchange-traded funds

3. Fixed annuities

4. Individual stocks

The correct answer is: Individual stocks

Series 6 representatives are specifically licensed to sell mutual funds and variable products, but they do not have the authority to sell individual stocks. The Series 6 license is limited in scope, designed primarily for individuals representing investment companies and variable contracts. This limitation is in place because individual stocks are considered to require a different level of knowledge and regulatory oversight, which is typically covered under a Series 7 license. By not being authorized to sell individual stocks, Series 6 representatives concentrate their efforts on products that are more aligned with their licensing, such as mutual funds and variable annuities, which allow for more diversified investment strategies and involve pooled investments. This distinction ensures that investors receive the appropriate guidance based on the complexity and risk associated with various types of investments.