<SPECIAL FEATURE>
April 7, 1999

Wall Street Credentials

RR
Registered Representative
(a.k.a. "broker")

Overview -- While few may use the actual letters "RR" after their name, many registered representatives go by the common title of "stockbroker." Registered representatives sell securities to the public, exact trades on behalf of their clients, and may even have discretionary trading rights to certain client funds. Unfortunately, many registered representatives derive their income from trading commissions and are more familiar with sales techniques than actual financial analysis.

As with any other field where the hurdle to entrance is quite low and the potential income rather high, there are invariably some unscrupulous types working as brokers. Therefore, it is important that you research a broker's background before entrusting your money to him. Luckily, the National Association of Securities Dealers Regulation (NASDR) makes separating the good apples from the bad relatively easy. A simple phone call (800-289-9999) is all that is needed to check the work history of any registered representative.

While the academic and experience requirements to become a registered representative are comparatively low (as can be seen below), the NASDR and SEC do a relatively good job of maintaining oversight in the securities markets. Furthermore, many brokers may -- by osmosis -- pick up the skills of a talented financier simply by being exposed to research reports and the stock markets for days on end. Brokers who have been in the field for some time may possess that important but nearly invisible trait of experience.

Requirements -- In addition to getting a license from the state in which they plan on working, those wishing to become a registered representative must pass what is called the "Series 7" exam administered by NASDR. There are numerous other tests in the Series for lines of work such as options and commodities brokers, but the Series 7 is the exam associated with becoming a stockbroker. Some registered representatives may, however, take a large number of tests in order to broaden the scope of products they are able to sell.

The Series 7 test covers the subjects of elementary accounting and finance as well as the various mechanics and regulations involved in buying and selling stocks on behalf of clients. The exam is proctored via computer and can be taken at essentially any time. There is no academic requirement to be able to sit for the Series 7 exam, but a candidate must be an employee of a NASDR member firm. Most member firms, not surprisingly, look for employees with at least a bachelor's degree.

There are also periodic continuing-education requirements to remain in good standing with NASDR. Essentially, these continuing-education classes are to make sure that registered reps maintain a current understanding of rules and regulations. NASDR also requires certain disclosures about previous employment as well as disciplinary actions taken against any given representative.

To look into the history of your broker or for more information about the Series 7 test, visit the NASDR website at http://www.nasdr.com.

Time Needed To Fulfill Requirements -- The Series 7 is generally not considered a very difficult test, and most taking the exam can pass it after studying for a matter of weeks. Those with an educational background in business or accounting may even be able to pass with only a few days of brushing up.

</SPECIAL FEATURE>