What Is the FINRA Series 7 Exam? Requirements, Cost, Pass Rates & Salary
Passing the SIE exam is a great first step for starting your career in the securities industry. However, if you want to trade securities as a registered representative of a FINRA firm, you’ll also need to pass the Series 7 exam, also known as the General Securities Representative Qualification Examination. Both exams are required if you want a General Securities license, which you’ll need if you want to work as a financial advisor, client relationship manager for a broker-dealer, securities trader, investment consultant, or registered representative for an investment firm.
Although this test doesn’t have a reputation for being particularly difficult, it does cover a lot of information. To get you ready, here are some answers to common questions about the Series 7 exam and how to prepare for it.
What is the Series 7 exam?
The FINRA Series 7 exam is a 125-question test that you’ll get three hours and forty-five minutes to take. The questions are all multiple-choice and consist of four answer choices. You’ll take the exam on a computer, either at a local test center or on your own computer while you are proctored remotely. After you finish, you’ll receive your results on the screen, so you’ll find out right away if you pass or fail. If you fail, you’ll receive more detailed information about your performance on the various topic sections.
Who is eligible to take the Series 7 exam?
There are no education or work experience requirements to take the exam. However, you do need to be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm.
What is on the Series 7 exam?
On the Series 7, FINRA will test you on your knowledge of options and government securities, direct participation programs, variable annuities, investment company securities, municipal securities, and corporate securities. You must be familiar with applicable FINRA rules, SEC regulations, MSRB rules, CBOE rules, and other applicable legislation. You’ll also be tested on record-keeping, ethics, and client communication.
FINRA separates questions into four “Major Job Functions.” These are the functions, as well as how many of the 125 questions come from each function:
- (F1) Seeks Business for the Broker-Dealer from Customers and Potential Customers: 9 questions
- (F2) Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives: 11 questions
- (F3) Provides Customers with Information about Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records: 91 questions
- (F4) Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions: 14 questions
As you can see, nearly three-quarters of the questions pertain to information provided to customers. Thus, you’ll want to focus your studying on those questions. FINRA publishes a Series 7 Content Outline to guide your studying.
How hard is the Series 7 exam?
Unfortunately, FINRA doesn’t publish Series 7 pass rates. Some sources estimate a 65-70% pass rate, but it is unclear where they’re getting their numbers. However, compared to other standardized tests like the CPA Exam, Series 7 is not considered terribly difficult or complex. The trade-off is that the exam covers a broad range of topics.
In terms of passing scores, you must score at least a 72% on the test to pass.
What does it cost to take the Series 7 exam?
You must pay a $395 registration fee to take the Series 7 exam. However, the firm that is sponsoring you may pay this fee on your behalf. Additionally, we recommend purchasing study materials, which we’ll cover in a moment. Ask whether your firm covers these Series 7 costs as well.
What are the other Series 7 license requirements?
Unfortunately, passing the Series 7 test alone is not enough to earn your license. You’ll also need to pass the SIE (Securities Industry Essentials) exam. In most states, you’ll also need to pass Series 63 in order to actually sell securities within that state.
How much can you earn with a Series 7 license?
Obviously, there’s more than one job opportunity for people who hold a Series 7 license. How much you make will depend on your job title, experience, and geographic location. However, according to Payscale, here are some average salaries for Series 7 license holders at the time of this article’s publication:
- Financial Advisor: $47,000-$121,000
- Financial Planner: $51,000-$132,000
- Registered Client Service Associate: $48,000-$78,000
- Registered Client Associate: $49,000-$83,000
- Certified Financial Planner (CFP): $55,000-$141,000
- Wealth Advisor: $57,000-$135,000
- Compliance Officer: $67,000-$131,000
Do I need to take the SIE exam first?
In a word: No. The SIE and Series 7 exams are co-requisites for a General Securities license. Although you’ll need to take them both at some point, you can take them in any order. However, you don’t need to be sponsored by a firm to take the SIE exam, and it’s substantially cheaper, so many people choose to take it first.
Do I need to take FINRA Series 7 before Series 63?
Since passing the Series 63 exam is required before you can sell securities in a particular state, many people pursuing finance careers take them both. Series 63 is a much shorter exam—60 questions taken in 75 minutes—and there are no prerequisites, but most people take it after they’ve passed Series 7. You must possess both Series 7 and 63 licenses to be able to sell securities in all states except Colorado, Florida, Louisiana, Maryland, the District of Columbia, and Puerto Rico.
How do you study for the Series 7 exam?
First, you’ll need to take a close look at the official FINRA content outline and make sure you have a working knowledge of everything listed. However, it’s not a good idea to stop there. You need to become familiar with the types of questions you’ll be asked and how they’re worded. Thus, we recommend answering a lot of practice questions and taking at least one Series 7 practice exam.
Where can you find Series 7 practice questions?
FINRA does not publish official practice questions, but there are plenty of Series 7 study guides and question banks out there to help you prepare.
What is the best Series 7 study material?
Overall, we recommend Securities of America’s Series 7 exam prep course. For self-studiers, it offers the best balance of price and comprehensiveness. You can purchase the full package, or partial packages that focus on textbook/software or video lessons. Additionally, all of Securities of America’s Series 7 products come with a money-back guarantee. The company boasts a 90% pass rate. However, this is based on their company data, and we cannot fact check this information.
Of course, a self-study course isn’t right for everyone. Check out our full article on the best Series 7 study materials for our full list of recommendations.
