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.
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.
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.
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:
Read this article on Series 7 study strategies for more details about preparing for the exam, including what to do on exam day.
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