Getting Started in Your Career Articles
What Is an Insurance Producer?
An insurance producer sells insurance products to clients on behalf of an insurance company. It is a rewarding career with amazing growth potential. Becoming an insurance producer is also a great way to get started in finance or to make a much-needed career change. This article explains what an insurance producer does, shows you the differences between an insurance producer, agent, and broker, and describes how you can become a producer.
What an Insurance Producer Does
Insurance producers are licensed to sell and negotiate life, health, property, or other types of insurance offered by an insurance company. As an insurance producer, you may work for one insurance company only or represent multiple carriers.
Being a producer includes finding new clients and maintaining relationships with those you already have. Insurance producers need to be a reliable first point of contact when a client needs to file a claim or increase coverage due to major life events, like purchasing a new car or having a child. Other responsibilities include:
- Calculating premiums and establishing payment methods
- Monitoring insurance claims and helping clients settle them
- Fulfilling all policy requirements
- Customizing insurance programs to suit individual customer needs
- Inspecting property to examine its overall condition and decide its insurance risk
- Acting as an intermediary between a customer and the insurance company
What’s the Difference Between an Insurance Producer and an Insurance Agent?
There is no difference. The two terms are used interchangeably to describe selling insurance on behalf of a company or multiple carriers. “Insurance agent” is the term used most often in the industry, but “insurance producer” is often the official title that states use for licensing. No matter which term you use, you will have the same responsibilities.
What’s the Difference Between an Insurance Producer and an Insurance Broker?
Insurance producers or agents represent insurance companies. By contrast, insurance brokers represent insurance buyers. In other words, producers look for clients who will buy insurance products, while brokers look for insurance products that will meet their clients’ needs. In addition, an insurance producer can bind a client to a policy whereas an insurance broker cannot. Once a broker has found a product for a buyer, a producer must complete the transaction.
How to Become an Insurance Producer
Before you can become an insurance producer (or agent), you must have a high school diploma and be 18 years of age or older. If you meet these requirements, here are your next steps:
- Decide what kind of insurance you want to sell. Examples include life and health, property and casualty, auto, and workers’ compensation.
- Learn your state’s prelicensing requirements. Many states require you to complete a specific number of hours of prelicensing education for each type of insurance.
- Pass your state’s insurance licensing exam.
You can get all the details on these steps in this article.
Ready to Get Started?
If a career as an insurance producer or agent is appealing to you, you can learn more about the job in this article. Or, if you’ve decided to take the exam and earn your license, prelicensing exam preparation and education can help.
Popular Careers in the Insurance Industry: What You Can Do with Your License
What are the most popular insurance careers? If you’re getting ready to graduate or you’re considering a more exciting career alternative, you might be wondering what you can do if you earn your insurance license. To help you decide which license to earn and how to use it, this article describes the most popular types of insurance agents and other top jobs you can get with an insurance license.
Life Insurance Agent: One of the Most Popular Insurance Careers
Life insurance agents sell life insurance policies and annuities and work with clients and beneficiaries to process insurance claims. Life insurance agents do a lot of selling, so it’s important to be interested in marketing and have a knack for it. Excellent interpersonal and communication skills are also required because life insurance agents have to explain the ins and outs of all the products they sell in a way that is easy to understand. Life insurance agents can either be “captive” and work exclusively for one insurance company, or they can be “independent,” selling products from multiple companies.
To earn a license to sell life insurance, you might need need to complete prelicensing education for the state where you plan to work (26 states require prelicensing education). You must also pass either a life insurance or a life and health insurance exam. Agent pay is on commission. The average salary for a life insurance agent as of November 2019 was $79,606. You can learn more about this popular option for people with insurance licenses in this article about what a life insurance agent does.
Thinking about a career in insurance? Get advice from 100 insurance professionals in our free eBook, Launching Your Insurance Career.
Health Insurance Agent: Helping Clients Get Healthcare
Health insurance agents sell health-related products and insurance to their clients. Typically, these agents look for clients, share options that meet their requirements, and, when necessary, help them get their claims settled. Health insurance agents can also help people navigate healthcare exchanges and sign up for the coverage that best suits their needs and budget. They must have strong customer service and analytical skills, and they must excel at verbal and written communication, time management, critical thinking, and decision-making. Like life insurance agents, health insurance agents can be captive or independent.
In almost all U.S states, health insurance agent licenses are packaged with life insurance qualifications. You must complete prelicensing education and pass a combined life and health insurance exam to earn your license. The average salary for a health insurance agent as of November 2019 was $55,839. Agents are paid by commission.
Property and Casualty Insurance Agent: A Great Entry-Level Choice
Property and casualty insurance agents help clients insure property, such as auto, home, and jewelry, against possible damage or legal liability, and they help them settle their claims. These agents navigate clients through all the available property and casualty insurance products to help them decide the best way to protect their valuable assets. All states require licensed drivers to carry auto insurance, and mortgage loan companies require homeowners insurance, so there will always be buyers. This makes property and casualty a good entry-level position for a newly licensed agent. Like life insurance and health insurance agents, property and casualty insurance agents can be captive or independent.
To earn a property and casualty insurance license, completing prelicensing education and passing a licensing exam for your state (or the state where you plan to sell) are required. The average salary for a property and casualty insurance agent as of November 2019 was $48,723.
Claims Adjuster: An Investigative Insurance Career
Claims adjusters gather information about what happened in an incident or catastrophe to find a fair settlement price. They collect police reports, witness statements, and photos of an incident or property damage, for example. Adjusters are either full-time employees or contractors who are paid a fee. Some work for only one insurance company. Others work with multiple companies (usually after a catastrophe, often traveling to affected areas). And there are others who work on behalf of policyholders, helping them file insurance claims if a proposed settlement seems unfit from an insurer.
Most states require adjusters to earn a license. They can do this by completing licensing education and passing an exam. The average salary for a claims adjuster as of November 2019 was $54,479. This article explains everything you need to do to become a claims adjuster.
Insurance Underwriter: A Different Insurance Career Path
An insurance underwriter evaluates insurance applications in order to decide whether to provide the insurance and, if so, the coverage amounts and premiums. Underwriters act as go-betweens for insurance agents who are eager to sell a policy and insurance companies who want to minimize risk. For someone with an interest in finance or insurance, an eye for detail, and decision-making skills, it is an attractive career option.
Unlike most other insurance careers, an underwriter does not have to be licensed. However, most participate in underwriting professional development to sharpen their skills and knowledge. Others have found that having an insurance license in the same specialty as their underwriting, such as life or property and casualty, can be beneficial. The average salary for an insurance underwriter as of November 2019 was $71,116. You can get all the details about the insurance underwriting career in this article.
Insurance Careers Are Rewarding and Satisfying
There are a variety of career paths you can take in the insurance industry, depending on your interests and qualifications. Start your new career by downloading this free eBook on launching your insurance career or by checking out our insurance licensing education options.
AAMS® vs. CFP® Mark: Which Designation Is Right for Me?
A special designation in financial planning can set you apart from the competition and boost your career. But should you earn the AAMS® or the CFP® mark? Both lead to rewarding, professional opportunities for those who want a career in personal finance and planning, but the topics they cover, their requirements, and their benefits are slightly different. In this article, we compare the AAMS® vs. CFP® mark to help you choose the credential that’s right for you.
AAMS® Designation Overview
The Accredited Asset Management SpecialistSM (AAMS®) program provides advisors with fundamental financial knowledge of asset management and investments. Offered exclusively online by the College for Financial Planning®—a Kaplan company (CFFP), the AAMS® credential and program are designed to help personal financial advisors who are just starting out in their careers. However, more experienced financial advisors can benefit from the credential, too, because it lets clients know they have a specialty in asset management.
Get more details in this AAMS® designation article.
Requirements for Earning the AAMS® Designation
To earn the AAMS® designation, follow these steps:
- Complete a 10-module education program provided by CFFP. There are no prerequisites for this program, which typically takes 9–11 weeks to complete. The modules cover the asset management process; risk, return, and investment performance; asset allocation and selection; investment strategies; taxation of investments; investing for retirement; deferred compensation and benefit plans; insurance products for investment clients; estate planning for investment clients; and fiduciary, regulatory, and ethical issues for advisors.
- Take and pass the AAMS® exam. You must take the test for the first time within six months of enrolling for the program, and you have a year to pass it. There are 80 questions on the exam, and the passing score is 70 percent. Plan on studying for about 80–100 hours.
- Agree to abide by a code of ethics.
The AAMS® designation is recognized as the industry benchmark for asset management credentials and is endorsed by leading financial firms. Compared to earning an MBA or other credentials, the AAMS® designation is a relatively low-cost ($1,300) way to advance your career and lets clients know you have deep knowledge in asset management and investments. Financial advisors with the AAMS® credential report an average earnings increase of 20 percent, as well as client-base growth and greater job satisfaction.
CFP® Certification Overview
The CERTIFIED FINANCIAL PLANNER™ (CFP®) mark enables finance professionals to help individual clients create comprehensive plans for meeting their long-term financial goals, such as retirement, college tuition, business start-up, a home, and so on. Its governing body, CFP Board, administers the credential. In 2017, CNN Money reported that jobs for CFP® professionals are expected to grow 30 percent over the next 10 years, making it an excellent career option for young financial professionals.
Requirements for Earning the CFP® Mark
The requirements for earning CFP® certification are:
- Complete a CFP Board-registered education program. CFP Board must be notified when you’ve completed it.
- Pass the CFP® exam. Offered three times a year in March, July, and November, the CFP® exam focuses on testing your financial planning knowledge in client situations. The topics covered include professional conduct and regulation, general financial planning principles, education planning, risk management and insurance planning, investment planning, tax planning, retirement savings and income planning, and estate planning. You should plan to spend 250 hours studying for the six-hour, 170-question, computer-based exam. This exam FAQ has more details.
- Hold a bachelor’s degree from an accredited university or college. You can hold the degree before you complete the education program and pass the exam or earn it afterward. (You have up to five years after passing to get your degree.)
- Have financial planning experience. This can be 6,000 hours of full-time, relevant personal financial planning or 4,000 hours of apprenticeship.
- Pass the CFP Board candidate fitness standards. To do this, you must agree to adhere to CFP Board’s ethical standards, disclose any criminal or employment termination history, and pass a background check.
For all the details about how to become a CFP® professional, check out this article.
CFP® Certification Benefits
Like the AAMS® designation, the benefits of earning the CFP® mark include a rewarding career that involves a relatively low investment ($7,000 for the course work plus exam fees) compared to the tuition for an MBA or other credentials. The most common careers include financial planner, wealth advisor, estate planning specialist, trading and research associate, financial consultant, financial representative, or financial analyst. If you want to become a branch manager at a financial firm, CFP® certification can help you achieve that level in your organization as well.
AAMS® vs. CFP® Mark: How to Choose
The AAMS® designation is respected as an achievement milestone. If you would like to quickly earn a credential to demonstrate your asset investment expertise to clients and employers, the AAMS® program takes less than three months to complete. If you are in training to become a personal financial planner, earning your AAMS® can put you on the path to an entry-level position.
The CFP® mark is highly respected in the industry, and it can open many doors for you in your career. Firms know that CFP® professionals are preferred by clients. In fact, a recent CFP Board study revealed that 69 percent of surveyed consumers said they would insist that their financial planners have the CFP® certification. As a result, many companies will offer financial assistance to employees interested in earning the CFP® mark.
As you ponder the benefits of each, ask yourself what your long-term goals are. If you would like to get a headstart in your financial planning career, earning the AAMS® designation is a good option. If your dream is to work in a large firm where you can apply personal financial planning knowledge and skills more broadly—and you have the time to invest in an intense program—the CFP® mark is an excellent choice.
Who Says You Have to Decide?
There is a third option: earning both the AAMS® and the CFP® mark. Many financial planners and advisors start with the AAMS® designation. Then, after gaining experience in the field, they enroll in the CFP® program and earn that credential. In fact, financial advisors who want to follow that path can test out of two of the seven courses in the CFFP CFP® certification education program by earning their AAMS® designation.
Performing well in the AAMS® designation program and on the exam also increases your odds of passing the CFP® exam. A study by CFFP that was submitted to the 2019 Annual Meeting Academy of Financial Services shows that students who did well (either an A or B grade) in the AAMS® program had a good chance of doing well in the CFP® program. Testing out of two courses offered by CFFP and performing better in the CFP® program are two powerful arguments for earning your AAMS® before your CFP® mark.
Ready to Get Started?
What is the SIE Exam Passing Rate?
If you’re taking the FINRA Securities Industry Essentials (SIE) exam, you might be wondering about the passing rate. And you probably want to know how hard the exam is. Although more than three-quarters of those who sit for the SIE exam end up passing it, it’s still challenging. Let’s take a look at the data and then see what you can do to increase your chances of passing.
SIE Exam Passing Rate
You need a score of 70% or better to pass the SIE. As of August 31, 2019, the overall passing rate of the SIE exam was 82% out of 67,445 exams administered. Of the 58,264 candidates who were taking it for the first time, the pass rate was 74%. The rates for those taking the SIE with the Series 6, Series 7, and Series 79 exam were as follows:
- SIE and Series 6: 80%
- SIE and Series 7: 84%
- SIE and Series 79: 96%
Thinking about taking the SIE exam? Our free Candidate's Complete Guide to the SIE Exam is packed with useful information.
How Hard Is the SIE Exam?
The SIE exam is not easy. You should be prepared for a challenge. You are expected to know about capital markets, securities products, and regulations, as well as how to trade securities and what products are prohibited.
Although the exam requires some math and a few calculations, mostly you are being tested on how well you read the exam questions and your understanding of finance and securities concepts. Knowing definitions will not be enough. You should also be prepared for one word being used to mean different things and, conversely, several different words being used to mean the same thing. For examples and more details, read our article on frequently encountered SIE exam roadblocks.
Despite the challenges, you can be part of the 82% passing rate if you know the topics and prepare properly.
SIE Exam Questions and Topics
The SIE exam consists of 75 multiple-choice questions plus 10 unscored questions, and you have an hour and 45 minutes to complete it. The topics and the number of questions assigned each are:
- Knowledge of Capital Markets: 12 (16% of the exam)
- Understanding Products and their Risks: 33 (44% of the exam)
- Understanding Trading, Customer Accounts, and Prohibited Activities: 23 (31% of the exam)
- Overview of the Regulatory Framework: 7 (9% of the exam)
As you can see, the second and third sections make up 75% of the exam, so you need to do well on both those sections. But don’t overlook the other two. They are important because you will need to know how to apply those concepts in future securities licensing exams.
SIE Exam Study Tips—How to Increase Your Odds of Passing
These tips will help you develop the knowledge and confidence necessary to increase your odds of passing:
- Layout a study plan. Use the SIE Exam Content Outline from FINRA as a starting point. An SIE exam prep package is even more helpful for developing your study plan and determining how many hours to study. Because the SIE exam was just implemented in October 2018, guidance on how many hours of study to put in varies widely. Some say 20 hours. Others say 100-150 hours. Kaplan advises no less than 50 hours, and you should add more hours if you don’t have a financial background.
- Develop a steady, regular study routine. A routine can increase your retention dramatically. Balance your studying between reading and practicing with breaks in between that enable concepts (and how to apply them) to percolate. Relying solely on frantic cramming a few days before the exam is not recommended because you aren’t tested on memorization.
- Be sure you have a thorough understanding of finance and the markets, and are keeping up with trends. Take some extra study time to listen to podcasts or youtube videos about investing. Subscribe to updates from financial news sources online. Visit online discussions of finance, the stock market, and securities on quora and reddit. Build your confidence by answering practice questions and taking practice exams.
- Practice questions and exams enable you to assess how well you understand and apply critical concepts. You’ll be able to address weaknesses and become accustomed to the kinds of questions you’ll be asked on the exam.
Ready for the Challenge?
All about CFP Board: The Organization behind the CFP® Exam
CFP Board is the accepted short name for Certified Financial Planner Board of Standards, Inc., a non-profit organization that administers the CERTIFIED FINANCIAL PLANNER™ (CFP®) designation. Along with granting the CFP® mark, the mission of CFP Board is to advance and ensure that the certification is the recognized standard of excellence for personal financial planning. In this article, you’ll learn about the history of CFP Board, its structure and activities, and its role in developing the CFP® exam.
CFP Board History
In 1969, 13 men met in Chicago to formalize personal financial planning as a profession. Before that time, personal financial planning required searching numerous areas of the financial services industry for ways to help individuals plan for their financial futures. At that meeting, they created the International Association for Financial Planners (IAFP) and the College for Financial Planning, which introduced an education program for what would later become CFP® certification.
Sixteen years later, in 1985, the College for Financial Planning agreed to the establishment of an independent, non-profit certifying and standards-setting organization. It transferred ownership of the CFP® mark and responsibility for continuing the CFP® certification program to the new organization, now known as CFP Board. In November 1991, 81 people received the CFP® mark after passing the very first CFP® exam, which tested their ability to integrate and apply the knowledge gained from the financial planning curriculum.
Get a sneak peak at the beginning of the Kaplan education program to get a feel for whether CFP® certification is right for you by downloading our free eBook.
CFP Board Today
Today, CFP Board is headquartered in Washington, D.C., and its CEO is Kevin Keller, CAE. Among its responsibilities is maintaining current, and developing new, financial planning standards as the industry changes. It accepts volunteers for its various councils and research projects, and it counts all CFP® professionals in good standing (those who have earned the certification and keep it active through continuing education) as its members. As of August 31, 2019, there are 85,434 CFP® certificants, and they are located all over the U.S.
CFP Board has a board of directors, which oversees CFP Board and sets policy. The current chair is Susan John, CFP®, of Financial Focus, Inc., Wolfeboro, NH. CFP Board has a number of research initiatives on topics such as racial and ethnic diversity, women in financial planning, and consumer surveys. It has councils for business models, public policy, and education, and a standards commission. It also operates CFP Board Center for Financial Planning, which is dedicated to making sure every American has access to financial planning advice that is competent and ethical through greater diversity and sustainability.
CFP Board Education and Ethics
CFP Board sets the standards for the financial planning education required to earn the CFP® certification. In other words, before you can become a CFP® professional, you must complete a comprehensive course of study at a college or university that offers a financial planning curriculum approved by CFP Board. After CFP Board is notified that you’ve successfully finished that education, you can take the exam. Once you pass the CFP® exam, gain the requisite years of experience, and earn the certification, it’s good for two years. After that, you must renew it every two years by taking continuing education courses approved by CFP Board.
CFP Board is also the keeper of “The Rules of Conduct.” These rules require that CFP® professionals put client interests ahead of their own at all times and that their financial planning services are “fiduciary,” which means they are acting in the best interest of their clients. CFP Board can, if it chooses, sanction CFP® professionals who violate these standards.
CFP Board and the CFP® Exam
CFP Board develops the CFP® Certification Exam, which tests how well candidates can apply financial planning knowledge to real-life situations. Volunteer CFP® professionals guide all aspects of the exam, which include setting the criteria for scoring and passing. Some of these volunteers are subject matter experts (SMEs) who determine what the content will cover, write the questions, and review them. Others are volunteers on the CFP Board Council of Examinations (COE), which reviews and approves the questions. Testing experts assure the exam is current, reliable, valid, and legal.
Before you take the exam, you must meet the education requirement by completing the CFP® curriculum at a CFP Board-approved educational institution. The topics covered on the CFP® exam include general financial planning principles, investment planning, retirement savings and income planning, risk management and insurance planning, tax planning, estate planning, professional conduct and regulation, and education planning. It consists of 170 multiple-choice questions, and candidates take it over the course of six hours with a 40-minute break after the first 3 hours. It’s offered in eight-day windows, three times a year. (This CFP® Exam FAQ has more details.)
Ready to be Recognized by CFP Board as a CFP® Professional?
If you’re interested in taking the exam, we have CFP® exam study packages. Or, if you’re just starting out and need to complete the required education, explore our CFP Board-registered education program.
I Failed the Series 7 Exam: Now What?
So, you failed the Series 7 exam. You might be a little down right now, but you don’t need to feel that way for long. Most brokerages and investment firms offer you at least two opportunities to pass the exam and get your license. So, sign up for a retake. If you think positively as you prepare and follow the six tips in this article, you can increase your odds of success when you take the exam again.
Failing the Series 7: The Good News
Yes, there’s good news. You have already put in a great deal of study time, so it’s unlikely you need to study that much again. Also, you don’t have to fear losing what you learned because of long cycles between exam dates. You can retake the exam as early as 30 days after you fail. For these reasons, it should be much easier to balance your work, family, and study commitments this time around.
You are also likely to have learned what your weak spots were based on how you felt about the questions when you took it the first time. In addition, you probably won’t feel as anxious and panicky on exam day, which could cost you a passing score, because you now know what you can expect. Unsure about how to prepare for your retake? Here are six tips that can increase your odds of passing when you take it again.
Download our free eBook, Launching Your Securities Career, to get tips and advice from more than 100 successful securities professionals.
1. Take time to reflect on why you failed the Series 7 exam.
What were the reasons you failed? Did you feel the questions were more in-depth than you expected or that the questions focused on topics that were unfamiliar? Did you have high scores for certain types or categories of practice questions, only to find that the exam had different kinds? Did you rush your study time, perhaps only putting in a week or so of study right before the exam? Maybe you thought you didn’t need an exam prep package or practice. Don’t feel embarrassed if one (or more) of these is why you didn’t pass because these are all common reasons for failing. In fact, it’s good to be honest, because that can guide your study plan for the retake.
2. Create a study plan based on why you didn’t pass.
Now that you’ve done an inventory of what might have caused you to fail the Series 7, you can create a study plan to address your issues. If you didn’t put in enough hours, make sure your plan includes them this time around. If you sailed through some topics and stumbled on others, focus on the ones that tripped you up. However, you should also make sure that you dedicate some time to reviewing the others just to keep them fresh in your mind. If you tried to “go it alone,” consider investing in a Series 7 test preparation package and practice questions this time around.
3. Make sure that your study materials are up-to-date.
Securities rules and regulations change frequently and test topics can reflect them almost just as fast. Try to keep up with the latest information from FINRA, starting with their notices web page. Check to make sure that any guides you have or review packages you purchased are based on the most recent information. Although some providers update their packages and guides regularly, it’s good to do a little homework to make sure that what you’re studying is current.
4. Start studying as early as you can.
You can’t cram for the Series 7. If you tried that last time, it is most likely the main reason why you didn’t pass. So, get in a study routine early. A steady, regular study method will increase your retention dramatically. And if you didn’t cram, good for you, but you should still start studying as soon as you can. You will some breaks to let concepts percolate. Also, you'll need time to sleep, because that’s very important for peace of mind on exam day.
5. Take practice exams.
Some test takers fail the Series 7 exam because they spend too much time on reading and memorizing calculations and concepts. In this article that lists 7 strategies for passing the Series 7 exam, it says to balance studying between manuals and practice questions, which is sound advice for first-time exam takers. For this second time around, you should practice much more than you read. You should take practice exams, which closely replicate the real exam in degree of difficulty, weighting, and format. Most are updated to address the latest regulations, and you receive a score with diagnostic feedback.
6. Read the whole question.
You’d be surprised at how many people failed the Series 7 because they missed something important in some of the questions. So, for each question, be sure you read it in its entirety and don’t start to answer until you’ve also read all the answer choices. Then read the last sentence of the question again before starting to eliminate answers. Here’s another valuable tip: if you have read the question thoroughly, and there are at least two answer choices you cannot eliminate, consider choosing “all of the above” if it’s an option.
Ready to give it a try again?
If you failed the Series 7 exam the first time, remember that it’s a challenging exam, and you are not alone. If you follow the tips in this article and invest in exam preparation packages and study tools, you will improve your odds of passing it on your second try.
How Hard is the FINRA Series 7 Exam?
How hard is the Series 7 exam? FINRA designed it to test Series 7 license candidates on how well they can apply their knowledge of securities concepts to specific scenarios. It is a corequisite of the SIE exam, which tests you on general securities topics. By contrast, the questions on the Series 7 exam are detailed and related to the day-to-day activities, responsibilities, and job functions of stockbrokers. Therefore, it can be considered a challenging exam. In this article, we’ll share the details, including Series 7 pass rates and topics, and how to improve your odds of success.
Series 7 Pass Rate
At the FINRA 2019 annual conference, it was announced that from October 1, 2018 to March 31, 2019, 10,542 individuals sat for the exam, and the Series 7 pass rate for that period was 71 percent. That rate applies only to those who passed both the SIE exam and the Series 7 exam. FINRA also reported that this pass rate was better than those from before October 1, 2018, when the SIE was introduced. However, this improvement was just a few percentage points and factors in a 74 percent rate for the SIE alone. Therefore, the exam is still no walk in the park.
Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.
Series 7 Exam Questions and Topics
The Series 7 exam consists of 125 multiple-choice questions, and each question has four answer choices. The topics include investment risk, taxation, equity and debt instruments, packaged securities, options, retirement plans, and interactions with clients. The focus of the exam is the nature of these securities and financial instruments, and it tests knowledge relevant to the day-to-day activities, responsibilities, and job functions of general securities representatives. The 125 questions are broken into four sections as shown in this table:
|1 - Seeks Business for the Broker-Dealer from Customers and Potential Customers||7%||9|
|2 - Opens Accounts after Obtaining and Evaluating Customers' Financial Profile and Investment Objectives||9%||11|
|3 - Provides Customers with Information About Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records||73%||91|
|4 - Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions||11%||14|
As you can see, the third topic dominates the Series 7 exam curriculum. Therefore, it is essential that you have a firm grasp on how to provide investment information and recommendations to customers, how to transfer assets, and how to maintain appropriate records. You should keep this in mind as you study.
Series 7 Exam Study Tips—How to Increase Your Odds of Success
The Series 7 exam is not easy. It requires a significant investment of time to be successful. Proper preparation is the key. These tips will help you develop the knowledge and confidence necessary to increase your odds of passing:
- Develop a solid study plan and stick to it: You need to spend 80-100 hours studying for the FINRA Series 7 exam if you have a finance background and about 150 if you don’t. The first thing you should do is lay out a study plan that ensures you put those hours in. Give yourself enough time to take breaks from study to let concepts percolate. Consider making a Series 7 preparation package part of your plan.
- Set a routine early: A steady, regular study method will increase your retention dramatically compared to frantic cramming at the end. Balance your studying between manuals and practice questions so you don’t burn out on either. Be sure to take a day off to rest your mind when you need to.
- Focus on learning concepts: Most of the exam questions will test how you incorporate all your knowledge about securities and financial instruments to make suitable recommendations for a hypothetical client. For that reason, understanding concepts and how to apply them should be your focus, not memorizing formulas.
- Practice, practice, practice: There is no better way to build your confidence ahead of the Series 7 exam than by doing practice questions. You should also take practice exams. Both types of exam practice help you truly assess your comprehension of critical concepts, identify and address weaknesses, and get comfortable answering the kinds of questions you’ll face on exam day.
Read this article on Series 7 study strategies for more details about preparing for the exam, including what to do on exam day.
Ready for the Challenge?
How to Find and Secure a Financial Advisor Internship
Financial advisor internships offer a great opportunity to get experience before earning a finance degree and fully entering the workforce. Internships enable aspiring financial advisors to learn the ropes firsthand, and the knowledge and “on-the-job” training can be beneficial during a later job hunt. Internships also benefit financial firms by providing additional help to address pressing demands. This article shares ways you can find a financial advisor internship and the steps you can take to secure it.
Financial Advisor Internships Aren’t Just for Summer Anymore
Before you start your search, think about whether you’d be willing to consider something other than a summer internship. Some universities and companies offer co-op positions throughout the year. Fall and spring internships are also available at some financial services firms. These longer-term internships are often easier to secure because there is less competition. So, if you go for one of these positions, you could already be an intern when the majority of students are applying for summer opportunities.
Another benefit of longer-term internships is that they look good on your resume. They can also, on occasion, lead to a job offer from the same firm because they have had more time to evaluate your work and see your skills and knowledge.
Considering a finance career? Download the free eBook Getting There from Here: Career Path Stories from Finance Professionals
Searching for Financial Advisor Internships
Once you decide what kind of internship you’d like, a good place to start the search is at your college or university career center. These centers often have a list of financial services firms who are specifically interested in hiring interns. The career center can also help you determine where you would like to work when you graduate and in what capacity, which can help you hone your search.
Another avenue for finding open internships is searching the websites of major financial services firms. Some of the most well-known, such as Merrill Lynch, Bank of America, and Wells Fargo, advertise for internships on their sites. Others have their own special programs for college students. Vanguard, for example, has a College to Corporate Advice Internship Program.
Independent finance associations such as CFP® Board, NAIFA, and the Society of Financial Services Professionals have career listings that include internships. For less specialized sources, visit internships.com, Glassdoor.com, LinkedIn, and indeed.com and do a keyword search for internships as a financial advisor.
And, here’s a great tip for internet searches that can save you time if you are interested in interning close to home or your university: simply go to Google and type “finance internship” or “financial advisor internship.” It will return listings of all the internships available in your area or state, including those that are advertised by financial firms or on all the major job search sites, including internships.com. You even have options for where and how to apply.
Getting a Financial Advisor Internship Interview
Like any career opportunity, you need to stand out in a sea of online applications so you can get an interview. Here are three good tips that can help you meet that goal:
- Contact the financial firms on LinkedIn before you apply: Do a search for the firms’ job openings. There is usually a contact name there. Or, you can do a search for “talent” with the company’s name to find a talent manager. Reach out to that person and express your interest in the internship and explain what makes you the best candidate. Let them know you plan to apply.
- Go over your resume carefully to make sure that it honestly represents your experience: Eliminate language that stretches the truth, such as saying you have cash management experience because you were a retail sales associate. Put your most relevant experience at the beginning and don’t forget to include any related volunteer work, such as helping people with their taxes at the library or being part of an investment club at a charitable organization.
- Apply early: As in just about every job market, competition for internships is fierce. The earlier you can get your application to financial services firms, the better. It helps you make a great first impression. You should also read the application carefully to make sure you follow the instructions to the letter. That also goes a long way toward impressing the firm.
Although these tips can’t guarantee you an interview, they can get you closer to one. If you don’t get an interview on the first try or first few tries, do not become discouraged. Look for other opportunities and keep applying. This article on getting a finance internship has additional advice that can help.
Acing the Interview
If you’ve been notified that you have an interview for a financial advisor internship, there are a number of things you can do to make sure you come through it with flying colors. Here are a few that have worked successfully for others:
- Before the interview, brush up on your finance knowledge and technical skills and work through the common finance problems or processes on which you could be tested. Then consider them in the context of the firm that is interviewing you and how to apply them in real-life scenarios. In addition, read this article on common finance internship interview questions and practice answering them.
- On the day before the interview, practice “selling yourself”: What are you good at? What makes you different from every other candidate who is applying for this internship? What soft skills, personality traits, passions, and values do you bring to the table that others don’t?
- On the day of the interview, bring your own set of questions: This article on preparing for a finance interview has some really good ones that focus on the work you’ll do, the organizational culture of the firm, and what skills and abilities you’ll have gained at the end.
- Emphasize your flexibility: Although many interns have set duties, you might be asked to do work outside those duties or they might vary or change frequently. Let the interviewer know you are willing and able to take on new or different tasks. Be as professional as possible throughout the interview and in other interactions you have with anyone else in the firm. However, you should also relax and have confidence in yourself. Smile when you can because that always makes a good impression.
Personality Wins Out
A final note: personality is key to landing a financial advisor internship. Companies really aren’t interested in hiring robots; therefore, you can stand out from the crowd by demonstrating that you’re passionate about something other than work. Help the company get past your interview “game face” by letting them learn more about you as a person. Situations that demonstrate your ability to lead or be an active member of your community are great examples to cite in your resume, application, and interview.
You Got the Internship! What’s Next?
The questions shouldn’t stop once you’ve gotten hired. Read our article on the five valuable questions you should ask your employer during your financial advisor internship to learn more.
What Jobs Can I Get After Earning the CFP® Mark?
With the CERTIFIED FINANCIAL PLANNER™ (CFP®) mark, you have a credential that can set you apart in the financial services industry. Earning the CFP® designation opens the door to unique professional opportunities for those with a bachelor’s degree who want a career in personal finance and planning. So, what kind of CFP® jobs are available to you after you’ve earned the credential and what kind of firms are hiring? Let’s take a look.
A financial planner helps clients organize their finances and estimates the results of their savings and investments so they can see how well prepared they are to meet long-term financial goals. Financial planners also have certain areas of expertise, such as retirement planning or education funding planning. They assist with budgeting, cash flow planning, and saving for college and retirement. As a financial planner, you’ll likely create a comprehensive plan to help clients after assessing their current financial situations and researching what they can do to improve them.
A financial advisor helps clients manage their money, so the role is more general and broader than that of a financial planner. Financial advisors often specialize in investment management, estate planning, retirement planning, insurance, debt repayment, tax planning, or any other aspect of the finance industry. They can be stockbrokers, insurance agents, money managers, estate planners, bankers, and more. Financial planners with the CFP® designation are likely to create short-term and long-term financial goals for their clients and then devise financial plans for achieving them.
A financial consultant focuses on the accountability aspects of financial planning by designing action plans and a financial strategy and by helping clients run their financial systems. As part of this accountability, financial consultants collaborate with other financial professionals, such as attorneys, accountants, and investment managers to ensure their clients' financial needs are met. They also stay up-to-date on financial news and economic events that might affect the plans they’ve designed for their clients.
Investment Advisor or Investment Adviser Representative
Investment advisors, also known as Investment Adviser Representatives, recommend investments or conduct securities analysis for their clients. Although this position is generally associated with selling securities, investment advisors are often CFP® certificants, especially if their recommendations are for financial planning purposes, such as retirement, college, and estate.
Wealth managers provide services to high-net-worth individuals and ultra-high-net-worth individuals, which can include types of financial planning. Examples include investment management, financial planning, tax services and planning, retirement planning, legal planning, philanthropic planning, and estate planning, among others. Wealth managers are usually more hands-on, and their solutions are usually more comprehensive than other financial planning and advising disciplines because of the special needs of their high-net-worth clients.
CFP® Jobs: What Types of Firms Are Hiring?
Finance and insurance companies, including securities and commodity brokers, banks, insurance carriers, and financial investment firms, are the most common employers of finance professionals with the CFP® credential. Other sources of employment are wealth management firms, pension funds, and Registered Investment Advisers.
Interested in Pursuing the CFP® Designation?
Although earning the CFP® designation does not guarantee you a job, it can make a difference when an employer is deciding between two otherwise equally qualified candidates. Passing the CFP® Exam and earning the designation takes hard work and dedication. It demonstrates to potential employers that you have a mastery of the important concepts in financial planning. Therefore, companies are more likely to choose the candidate with the CFP® mark. It’s a career move worth considering. Our CFP® Exam prep study packages can certainly help you on your journey.
Frequently Asked Questions About the FINRA Series 79 Exam
The questions most frequently asked about Series 79—such as what the license is for and Series 79 exam difficulty, passing score, pass rates, questions, and topics—are answered in this article. Read on to get all the information you need to plan for a career in investment banking.
What is the Series 79 License?
The Series 79 license is for investment bankers, enabling them to offer advice on or facilitate public or private debt or equity offerings, mergers or acquisitions, tender offers, financial restructuring, asset sales, and divestitures or corporate reorganization. Administered by FINRA, the Series 79 license is good for the entire period that you work for a FINRA-member firm or self-regulatory organization (SRO). It only expires if you are terminated or leave a firm and do not find employment within two years. Continuing education is required after you earn your license, however.
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What is the difference between the FINRA Series 79 and Series 7 license?
If you hold a Series 79 license, you can engage in the activities of investment banking. By contrast, the Series 7 license enables you to sell corporate stocks and bonds, municipal bonds, mutual funds, variable annuities, options, direct participation program partnerships, collateralized mortgage obligations, and more. Although each is independent of the other, the general industry consensus is that a representative with a Series 7 license who wants to work investment banking should earn the Series 79 license.
What jobs can I get with a Series 79 license?
If you’re interested in a career in investment banking and want to engage in its specific activities, this is the license to have. Officially listed as Investment Banking Limited Representatives by FINRA, Series 79 license holders are usually associates at an investment bank, investment banking analysts, or investment bankers. If you earn this license, you will most likely work in an investment firm or bank. In fact, you need to be employed by a sponsoring FINRA-member firm before you can sit for the Series 79 exam.
How do I earn a Series 79 license?
Earning a Series 79 license involves four key steps:
- Take and pass the SIE exam.
- Secure a sponsorship from a FINRA-member firm.
- Register for the Series 79 exam.
- Study for and pass the Series 79 top-off exam.
What is the Series 79 top-off exam?
As part of implementing the Securities Industry Essentials (SIE) exam, FINRA restructured their examination programs. FINRA is the governing body that ensures that anyone who sells securities products is qualified and tested. As part of this restructuring, FINRA created a tailored top-off examination for earning the Series 79 license. You should take the Series 79 top-off exam if you want to be licensed to sell investment banking products.
What are the requirements to sit for the Series 79 exam? Do I need a sponsor?
A FINRA-member firm or SRO must sponsor you to take the Series 79 exam. After you’ve worked for them for four months or more, they can file a Form U4 (Uniform Application for Securities Industry Registration) which registers you for the exam. Fortunately, most firms that hire or train you will have a mandatory Series 79 licensing program included in their training package.
There are no education requirements to sit for the Series 79 exam, although most candidates have a college degree in a finance-related field, and many choose to complete a Series 79 exam prep package before sitting for the exam.
May I take the Series 79 exam before the SIE exam?
Yes, although the more natural progression is to take the SIE exam first, mainly because you don’t have to be sponsored to take it, and it is a more general exam that covers securities concepts. The SIE exam and Series 79 top-off exams are “co-requisites,” which means you can take and pass them in any order. Of course, you have to pass both to earn your Series 79 license.
Do I need to take the Series 79 top-off exam if I already have a different securities license?
It depends. You might not need the Series 79 if you have a Series 7 license, and you want to sell a broader range of securities than those associated with investment banking. However, Series 7 license holders usually earn their Series 79 licenses if they plan to focus investment banking as registered representatives. You should consult with your firm before deciding whether you need a license or not.
Is the Series 79 exam paper or computer-based?
Like all other securities qualification exams, the Series 79 exam is administered by computer at a Prometric testing center.
What are the Series 79 exam dates?
The date of the Series 79 exam is a 120-day window that is opened when a candidate enrolls for the exam. So, after you enroll in the exam, you schedule an appointment with Prometric, and choose an available exam date within that 120-day period. We recommend scheduling your exam session as far in advance as possible to secure your desired Series 79 exam date.
What topics are covered on the Series 79 exam?
The Series 79 exam topics assess an entry-level registered representative’s competency and degree of knowledge associated with carrying out the three critical functions of an investment banking representative. This includes advising on or facilitating debt or equity securities offerings through a private placement or a public offering and mergers and acquisitions. Some of the topics covered are:
- Analysis of trends in the market, specific industry sectors, individual companies, and the capital structure and valuation metrics of comparable companies
- Due diligence by identification of information that is required to be disclosed in public or private offering documents Public offerings
- Sell-side and buy-side transactions associated with mergers and acquisitions, tender offers, and closing
How many questions are on the Series 79 exam?
The exam consists of 75 multiple-choice questions, and each question has four answer choices. There are also 10 additional, unidentified and unscored pretest questions that do not contribute to your score that are randomly distributed throughout the exam.
Series 79 exam questions all relate to the three functions shown in this table:
|Sections||% of Exam||# of Exam Questions|
|F1 - Collection, analysis, and evaluation of data||49%||37|
|F2 - Underwriting/New financing transaction, types of offerings and registration of securities||27%||20|
|F3 - Mergers and acquisitions, tender offers, and financial restructuring transaction||24%||18|
How much time does it take to study for the Series 79 top-off?
Most candidates spend 60 to 100 hours studying for the FINRA Series 79 exam. If you are looking for some exam study tips, this article about studying for all securities licensing exams has great advice.
How hard is the Series 79 exam?
Candidates must apply their knowledge to specific scenarios related to the three investment banking functions identified as critical by FINRA. The degree of Series 79 exam difficulty, therefore, is quite high. The questions are detailed with a heavy emphasis on data and analysis. So you should expect it to be challenging; however, with dedicated and focused preparation, it is possible.
How much does it cost to sit for the Series 79 exam?
The exam cost is $245.
What is the passing score for the Series 79 exam?
The Series 7 passing score is 73%. What is the passing rate for the Series 79 exam? FINRA announced that the passing rate as of April 2019 was 87%.
If I fail the Series 79 exam, what is the wait time before I can retake it?
Candidates who do not pass the exam must wait 30 days before taking it again. However, if you fail it three times in succession, you must wait 180 days. Your firm will also have to sponsor you again for each retake, and you will have to pay the full fee each time.
Ready to earn your Series 79 license?
We hope this article answers your pressing questions about the Series 79 top-off exam and license. If you’re interested in taking the exam, we have Series 79 exam preparation packages. Or, if you’re just getting started, check out our SIE packages.