Learn More About The Series 7 License Exam

Professionals in the finance industry must sit and pass the Series 7 License Exam before they can buy or sell bonds, stocks, derivatives or any other investment that is promoted to the general public. The Financial Industry Regulatory (FINRA) Authority normally administers these exams. The test covers a variety of topics ranging from financial products and instruments to investments. You can only take the exam if you have a sponsor who must be a registered member of FINRA. The good news is that if you are a Registered Investment Adviser, the state can act as your sponsor.

The Series 7 license is one of the many licenses that agents are required to have in order to communicate with individual investors. There are states where agents are required to have the Series 66 as well as the Series 63 licenses before they can practice. The Series 7 license is normally meant for financial advisers, analysts and account managers who work with registered Brokers and Dealers. This license assures the general public that they are dealing with competent members of the finance industry.

Candidates are required to correctly answer at least 72 percent of the 260 questions in the Series 7 license exam in order to pass. On average, 66 percent of candidates sitting the exam usually pass the exam with a mean score of 73 percent. In the test, 10 questions are used for practice or experimental purposes. Only 250 questions count towards the final score. For qualified candidates to sit this exam, each of them must pay a non-refundable fee of $265. However, this fee may change, so you may want to confirm the fee when booking the exam.

When registering for the exam, you must fill-out a U-4 application, disclosing previous criminal convictions and work history among other important issues. An important point to note is that these exams are offered daily, so you can book the exam whenever you are ready. The exam is offered in two sets, each of which must be completed within 3 hours. Each set has 125 questions.

The exam is easy to pass because each question comes with multiple choices and there is no penalty for guessing. In fact, reference materials are offered for some questions. For instance, Wall Street Journal clippings might be supplied at the testing center for candidates to use for reference. Some testing centers also provide non-programmable calculators to candidates. When booking your appointment, it is important that you check whether or not your preferred test center lends calculators to candidates who are sitting the exam.

Questions are asked to ascertain whether candidates know the following:

Bringing in new business for the dealer or broker. This may include the protocol to be followed when contacting potential clients. Issues of complete disclosure and transparency are also tested.

Evaluating the financial status of customers and their risk profiles to identify the products that will help them meet their investment goals.

Technical knowledge on buying and selling of securities, opening accounts, record keeping and how to transfer assets.

Keeping clients informed about market conditions, current investments and giving them investment advice.

Anyone who wants to work in the financial industry must sit and pass the series 7 license exam. This is a regulation that is not only meant to protect the general public, but also to enhance industry standards.

By: BucketTruck

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Sam is professional blogger about securities, specifically the Series 7 license. He helps people make the right choices and study before they take the Series 7 license exam.