Lawyers vs. Brokers
by Jim Toes
STA recently filed a comment letter that included a recommendation on an issue that acutely impacts women in finance: lapsed licenses. According to FINRA regulations, a Series 7 license expires after an employment lapse of two years. While STA did not comment on whether two years is too long or too short a period of time, we did recommend that FINRA institute a new reinstatement policy that has characteristics similar to lawyers. This includes the ability for individuals in a lapse state to take continuing education classes, and guidelines that would allow employers to reasonably expect that a potential hire will have his or her license(s) reinstated upon employment. Further, we state that the existing policy is flawed because it “creates an unreasonable barrier of re-entry for qualified individuals” particularly those who are primary childcare providers.
STA’s position on instituting a new reinstatement policy for licenses is based partially on fairness, but more so on a fundamental belief that investors will better served from a policy that retains qualified individuals. We all know someone who made a positive impact on our industry and the investors we serve, who then decided to leave for an extended period of time to raise a family. When this individual looks to re-enter our industry they face an unreasonable barrier, in part, because they are uninformed on current practices, and it is difficult to find an employer willing to sponsor them on retaking their exams. Consequently, many of these individuals seek employment elsewhere resulting in a loss of talent for our industry. If that individual were an attorney, they would be able to take continuing education classes during their time off, pay an annual fee and have their license remain valid. Upon re-entering the field of law, they would be educated on current issues and an employer could reasonably expect them to be productive since their license would be valid. STA believes a similar policy in financial services would be beneficial for our industry because it would ultimately benefit investors. Retaining talented people is something every industry must do to be effective. STA will continue to advocate on this issue and we hope you will join us.
STA’s letter to FINRA dated June 19, 2017
Obtaining the necessary licenses to practice in the financial services industry requires an intense commitment by individuals who must demonstrate mastery in the securities business and their employers who must sponsor them. STA supports the high standards required to pass such exams in order to obtain these licenses. However, STA believes that the requirements for individuals whose employment lapses beyond FINRA’s regulations to retake exams in order to re-enter the financial services industry are too onerous.
STA believes FINRA’s current policy is flawed because it creates an unreasonable barrier of re-entry for qualified individuals, in particular those who are primary childcare providers. According to FINRA regulations, the Series 7 license expires after an employment lapse of two years. STA has no comment on whether two (2) years is too long or too short a period of time, but we do believe that FINRA should institute a new reinstatement policy and process that has the following characteristics: the ability for individuals in a lapse state to take continuing education classes; requires individuals to apply and upon approval have their license(s) reinstated and guidelines which would allow employers to reasonably expect that a potential hire will have their license(s) reinstated upon employment. Reinstatement policies and processes exist in other industries such as the practice of law, therefore there are examples to compare.