How Hard is the FINRA Series 7 Exam?


Students wondering how hard is the Series 7
By: Kaplan Financial Education
August 26, 2019

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.

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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:

SectionWeightQuestions 
1 - Seeks Business for the Broker-Dealer from Customers and Potential Customers7%
2 - Opens Accounts after Obtaining and Evaluating Customers' Financial Profile and Investment Objectives9%11
3 - Provides Customers with Information About Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records73%91 
4 - Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions11%14 
Total 100%125 

 

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?

If you’re interested in taking the exam, check out our Series 7 exam preparation packages. Or, if you’re just getting started, we offer SIE packages and an SIE and Series 7 combo series.

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