If you have already secured a finra member firm sponsorship, you are in an excellent place to benefit, grow, and gain from expertise you’ll discover throughout the relationship; however, the member firm will benefit from your alliance in substantial ways, as well. This strategic interim relationship has definite advantages while you are studying for the Financial Industry Regulatory Authority (FINRA) exams beyond the most obvious. In the following paragraphs, we’ll detail those distinctive benefits that will inform critical decisions for your firm within an interim FINRA sponsorship relationship.
First, it is crucial to recognize the many, varied requirements of a FINRA sponsorship for both parties and determine that each is prepared to meet the expectations of the relationship. A sponsor is required by FINRA for each of the following exams: Series 7, 79, 63, 82, 24, 27, and 28 exams, in addition to other exams. In the interim sponsorship, both parties may mutually agree to the sponsorship for one or all of the exams, depending on the goals of your firm and where you want to succeed professionally. Within the scope of the requirements, the sponsoring firm will need to make the application for the applicant for each exam through the Central Registration Depository (CRD) within FINRA.
Both sponsors and the exam applicant carry numerous responsibilities while registering for an exam, including the following: fees to be paid (by the sponsoring firm), completed U4 application by the sponsor on behalf of the exam applicant, exam designation, professional designations of the applicant, personal history of residences, employment history, personal conduct statements (financial statements, civil or criminal cases), and other related documents, as required (www.finra.org).
What can you expect while under a FINRA sponsorship? Top-tier broker-dealers will assign a team of experienced broker-dealers to bring your knowledge to full compliance with the exam requirements in testing and aptitude for the material. The team will educate and provide insight into areas that inform the actions of broker-dealers; which strategies are most successful in the broker-dealer role; which are not. Such invaluable advice and leadership skills will support your training for the upcoming exam.
Some of the best FINRA sponsors utilize platforms that include high-speed results and ease-of-use capabilities. You may be introduced to and benefit by using industry-specific task management tools and time-saving programs, such as customer relationship management software, financial planning, and administrative tech tools that increase efficiency across the board. These tools are invaluable when starting a dealer broker firm; you’ll want to become familiar with them if you haven’t already done so.
An additional benefit when under the sponsorship of a FINRA broker-dealer firm is that of research and resource tools, such as templates and forms, statistical repositories (S&P Capital IQ, IBISWorld, D&B Hoovers, Statista, etc), along with in-house files that will inform your ongoing education related to wins and losses in broker-dealer portfolios.
During the course of the interim sponsorship, you may also be introduced to and network with those individuals and companies that can lead to deals that include your involvement. Such networking is invaluable, as relationships are formed that can be sustained through mutual interests and goals. Deal-making can be offered on your behalf under the sponsoring firm, which solidifies your role, even as you add the benefit of your involvement to the sponsoring firm.
One of the unseen benefits of a mutually beneficial interim sponsorship comes with expanded relationships on both sides of the table. When your firm introduces and includes your sponsor firm in a relationship, you’ve enlarged the capabilities of both firms. Likewise, the benefits of your sponsor are equally visible when your firm is introduced and brought into relationships that benefit your firm.
When considering the benefits of sponsoring an exam applicant, there are definite winning aspects of the relationship found in learned experiences for both parties, perspectives, and potential clients that may have been introduced to the sponsoring firm, relevant research techniques that may have been unconsidered prior to the relationship, and, most importantly, a potential future relationship between the two firms at some point in the future.
When the interim sponsorship and exam process is complete, the sponsoring firm will guide the applicant’s firm through FINRA registration requirements, overseeing the transition of the applicant’s firm to a broker-dealer with full membership privileges. The benefits to both the exam applicant’s firm and the sponsoring broker-dealer are relevant and timely for both, as new relationships are formed, dealmaking ensues and both parties gain from the knowledge and expertise of the other during the process.