How to Get a Series 7 License

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Series 7 Overview

The Series 7 license is known as the General Securities Registered Representative license and is the most comprehensive exam offered by FINRA. This license gives an individual the ability to sell most, not all, investment products on the market. This includes, mutual funds, stocks, bonds, variable annuities, options, and other packaged securities products.

The four key components to the exam are:

  1. Finding business for the Broker Dealer from current and potential customers
  2. Account opening after obtaining a customer's financial profile and evaluating their investment objectives
  3. Providing customers with information about investments, making suitable recommendations, making records and transferring assets
  4. Obtaining and verifying customer purchases, sales instructions, completing and confirming transactions

Plan to spend most of your time on the 3rd component because this is where most calculations are found. The exam does not test you on your methodology of the calculations, but only the final product of them. Always be sure to reference the organization's website to see what type of calculator and resources are allowed and be sure to set your study area up in the same manner.

Who is the Series 7 license for?

The Series 7 license is for individuals looking to become a registered representative in the securities industry. This person is hired by a broker dealer and sells registered products to the public. The Series 7 license also gives the individual the ability to sell private placement securities which are not traditional investment products and have their own specific requirements.

Steps to Obtain a Series 7 License

  • Pass the Securities Industry Essentials (SIE) Exam

New members entering the financial services industry are required to first pass the Securities Industry Essentials (SIE) examination. This exam introduces an overview of the industry, best practices, prohibited practices, fundamental regulations.

  • Find a Sponsorship

An individual must find a sponsor firm in order to register for this FINRA exam. Firms sponsor an individual by submitting Form U4, also known as the Uniform Application for Security Industry Registration. This form initiates the appropriate background checks, including fingerprinting, and registration filing of the individual with FINRA and it's member firm.

  • Study for the Exam

The Series 7 is the most comprehensive exam FINRA offers. To that point, be prepared to spend 200 to 300 hours studying the different concepts, regulations, products, and calculation methods depending on your experience. It is highly recommended to take an educational course to learn the appropriate information. This type of course can be found on the Study.com website under Financial Securities Courses. Plan on taking practice exams before the real thing. It is recommended to take at least two but possibly more if your practice scores are not above the passing rate or it takes you longer than the required time restraint.

  • Pass the Exam

The exam consists of 125 multiple choice questions and must be completed in 3 hours and 45 minutes. An individual must score at least 72% to pass the Series 7 examination.

Series 7 Exam Resources

It is advisable to first start by reading what FINRA publishes on their website because it will lead you to the specific laws, requirements, and legal documentation of the industry. This resource will also provide regulatory updates and changes to the exam format and topics. Make sure to take note of information or topics you are not familiar with and find outside resources (listed below) for further education.

Next, reference a study prep website, Study.com. This type of website is best because it translates the legal documents into educational pieces and typically makes it easier to learn. This is the best place to find best practices, educational resources, and practice problems. Material found here is produced by industry professionals who have passed the exams and directs you to the most salient topics to focus on.

Continue reading: How to Get an SIE License

In this lesson, we will discuss various types of finance certifications and associated exams. Included are important terms, examples of each exam and certifications, and the career path within the industry.

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