Should I Keep my series 7&66 License for REI?

Question

I am at a fork in my life where I am thinking about making the transition from my secure W2 job to REI Full Time. I recently got my real estate license and have a brokerage lined up for when I am ready (specializing in MFH and Commercial).

I am currently a financial consultant at an Asset Management firm with my 7 and 66 licenses (securities licenses). I worked hard to obtain these credentials and would prefer to keep them if I make the jump to REI full time. Unfortunately, your licenses will expire after 2 years if you aren't represented by a Broker/Dealer or IRA.

I would think that if I ever went down the road of raising private capital or joining a team that does syndication's ect... it would be an asset to have someone with these licenses?

Is there anyone who is currently 7 and 66 licensed doing REI full time that can offer advice on the best way to proceed? My original thought is reach out to as many smaller IRA firms, mom and pop shops if you will- that will hold my license in exchange for investor referrals and giving them my own finances to manage. From a compliance standpoint, I am not sure how it works to sponsor someone and NOT have them be a producing representative.

Appreciate any advice!

Michael Doherty · Answer

Thank you all for the advice- I appreciate it. I am leaning towards not hanging them up with any B/D at this point. The licenses are good for up to 2 years, so after 1.5 years of being in the RE industry, I will reassess. I suppose at that point (I should know) if RE is going to work out or not and if I'll even need them.

Dmitriy Fomichenko · Answer

@Michael Doherty

Like you I went full time in RE several years ago and wanted to retain my securities licenses. I actually found a BP who was willing to hold my license under his firm. But eventually I decided to gave up my licenses as I was not using them and it was just costing me $$ to keep them active.

Mark S. · Answer

My understanding is that most firms will not approve a real estate sales license to be a real estate agent while also a registered representative.

Michael Doherty · Answer

Account Closed appreciate the transparency. I guess my thought was- if it's not costly to hold a firm why not? Additionally, maybe RE doesn't work out- it would be nice to have those licenses to fall back on. But regardless, I understand where your coming from.

@Mark S. just to give you an update- my firm's compliance department approved the RE outside business activity. Is there something shocking about this that would be a cause for concern? As long as you report it, you absolutely can have an outside business activity. It may get murky if you were to start taking compensation for an outside business relating to financial advice, but for selling/buying real estate on the side- it is completely fine.

Account Closed · Answer

@Michael Doherty

Mike, it sounds like you are going into REI full time and will be using your real estate license to further your career.  Though it took some time for your FINRA licenses and a few bucks, it will not help you in your real estate venture.  If you do get involved in syndications or LP's, you're looking at conflicts of interest anyway if you were to maintain investment licenses/clients.  And not to be a jerk, but no investors or firms will really care if you have any series licenses in the real estate world.  I've learned that myself.  Being a CFP with over a decade of experience and a tremendous amount of hours/dollars going towards designations/licenses, very few people care about them at all....especially in real estate, unfortunately.  Save yourself the headaches and costs!  You won't need them for REI.

Mark Creason · Answer

@Michael Doherty

Finra does not allow BDs to park licenses.  That is their rule.  What the definition of parking is, is open to interpretation.  I also do not see Raymond James holding a license like this.  If you want to keep it, I would find a BD that specializes in RE and plan to use both your RE license and your 7.  By the way, I have a 7,24, 63 and 79, but have no problem with my multiple OBA licenses (re and mortgage).

Jennifer Gligoric · Answer

@Michael Doherty  I just asked Randy, my top advisor on my team since he held both a Series 6 and Series 63 when he owned his financial services corporation and he added to this - though I see you've gotten some interesting advice & feedback since I initially read this post  "Hello Jennifer, It’s my understanding with this securities license is that he would need to keep up his continuing education and contact a smaller firm where he can move his license to a new broker-dealer. I believe he has to write a minimum of 1 to 2 transactions per year to stay active. Then he would need to probably keep his fees paid on an annual basis. There’s a lot of smaller firms out there that will take on part-time representatives. One comes to mind is Primerica Financial Services or Raymond James."

Michael Doherty · Answer

@Mark S.I literally just got it the other day and have NOT hung it up at a brokerage- nor I have reported (yet) to my compliance department. I am allowed to have outside business activity so I assume I will be fine?

Mark S. · Answer

I’m shocked your firm would allow you to have securities licenses AND a real estate sales person’s license.  Did your compliance department really approve that?

Dmitriy Fomichenko · Answer

well, kind of both, to a degree... I still deal with retirement accounts but my niche is "self-directed" with "checkbook control". Majority of my clients are real estate investors, I help them establish the vehicle (IRA or 401k) which enables them to invest into alternative options (rentals, trust deeds, syndications, private placements, private lending, etc.) but I'm not involved in the investments at all, and did not really have a desire to go back and sell "traditional" investment options so there was absolutely no use for my securities licenses (I held 6, 63 and 26) and while like you I worked hard to get them, I decided to let them go and I don't regret it.

Should I Keep my series 7&66 License for REI?

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