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Financial Series 7
if you wish to work in the funding industry in the united states, you’ll possible should flow the commonplace Securities consultant exam, known most often as the collection 7. while the annual pass fee lands well above that of the CFA exam, only sixty five% effectively make it in the course of the sequence 7 on their first time, so the power is on. without it, you can not sell securities.
We spoke to Brian Marks, managing director of manhattan-primarily based FINRA Licensing exam education firm, Knopman Marks fiscal practicing, on what it takes to circulate the series 7 and other lesser-favourite financial tests.
1. Put the time in
whereas each and every stage of the CFA requires not less than 300 hours of analyze, the advised prep time for the sequence 7 exam – assuming you’re new to the business – is eighty-100 hours. This may still mean no longer most effective drinking the crucial analyze fabric, but undertaking as a minimum 1,000 apply questions and taking are living tests so that you can gain an realizing of the force you’ll be beneath on the day.
2. think concepts, now not questions
a standard mistake made by verify takers is memorizing answers instead of digesting the genuine material, Marks stated. It offers a false sense of self belief and is a components for no longer passing. if you with no trouble pair questions and solutions, wording and start can trade, and also you’ll need to be flexible enough to adapt. “individuals are attempting brute drive to memorize formulation as opposed to realizing the concepts. in case your memory fails on the examination, there isn't any backup,” he says.
3. Don’t waste time on the technical topics
in the series 7, loads of candidates are guilty of spending means too an awful lot time on the alternate options and company bonds sectors. “These two topics account for approximately 20% of the exam,” says Marks. "The ancient story concerning the series 7 was that options and municipal bonds used to make up near 50% of the test – that turned into your mother or father’s sequence 7, but that’s now not the case anymore. There’s greater range and greater emphasis on consumers and developing portfolios for them. There’s a trend in opposition t trying out practical abilities to ensure that people are well fitted to fulfill consumers’ investment needs."
four. understand the bell curve rule
There are two information to trust if you happen to’re pondering how a whole lot time to spend on every query. First, there are 260 questions in the series 7 tests but handiest 250 count number. The last 10 are experimental questions used with the aid of FINRA to help enhance the test in the future. So, don’t freak out if you see a query on an unfamiliar theme; this may put you off different questions. 2nd, there’s a bell curve approach to the examination. the first and ultimate 25 questions are the least difficult, so don’t panic if it unexpectedly gets greater tricky.
5. teach for what you’re getting yourself into
The series 7 examination is six hours long. It’s a beast. There’s a intent you should immerse yourself into follow checks in place of readily chunk-sized examine chunks. You should coach like an athlete to get your mind and physique used to this marathon period of time.
6. make certain your look at material is up to date
This feels like a small component, but out-of-date examine fabric ability that you’ve pretty lots missed the boat. here's particularly the case as regulators alternate the rules ever more unexpectedly. The analyze fabric you use ought to be under a year historical.
"preserve an eye out for crowd-funding questions, which might also come up," Marks referred to. "FINRA will also closely weight questions on issues which have been the field of abuses by means of business personnel. Examples consist of variable annuity income to senior residents and revenue of structured items to less sophisticated investors,” he provides.
FINRA normally updates the collection 7 content material define. One premium theme is making correct investment thoughts. “There’s an enormous trend toward the suitability of investments on the examination," says Marks. "It’s no longer so tons about rote memorization because it is realizing how specific consumers would want to assemble a portfolio and knowing what sorts of items could be applicable for them.
"for example, zero coupon bonds might be applicable for someone trying to store for his or her babies’s school training, cash market cash are respectable for a shopper searching for liquidity, whereas structured items corresponding to fairness-linked notes, sophisticated items with leverage, are doubtless applicable best for institutional buyers with a detailed figuring out of how they work," he provides.
7. Go above and past
You need 72% to pass the series 7 examination, however self belief is key. Realistically, you need to be hitting 80% in the observe tests to enter the day realizing you could move. The greater the margin for error, the stronger.
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Tangela Russell, economic controller on the Sterling economic neighborhood, has passed the series 7 examination after practising with Nassau-based The Nastac group.
The sequence 7 workshop coated rules and regulations within the capital markets; simple and secondary market operations; securities and financial evaluation; as well as packaged items, taxation and retirement plans.
Pictured left is Reece Chipman, The Nastac group’s president, congratulating Tangela Russell for her fulfillment.
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Thousands of FINRA's Series 7 questions, and their detailed explanations are now available at your fingertips.
Prepare for your Series 7 certification exam by answering thousands of questions written by veteran FINRA instructors.
Series 7 Exam Center covers all the chapters you need to in order to succeed in your exam:*SEC and FINRA rules and Regulations*Investment Companies and Insurance Products*Taxes and Retirement Plans*Equity Securities*Securities Markets*Municipal Securities and MSRB Rules*Investment Banking*Debt Securities*Securities Analysis*Margin*Limited Partnership*Options
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If you want to work in the investment industry in the United States, you’ll likely need to pass the General Securities Representative Exam, known most commonly as the Series 7. While the annual pass rate lands well above that of the CFA exam, only 65% successfully make it through the Series 7 on their first time, so the pressure is on. Without it, you can't sell securities.
We spoke to Brian Marks, managing director of New York-based FINRA Licensing Exam preparation firm, Knopman Marks Financial Training, on what it takes to pass the Series 7 and other lesser-known financial exams.
1. Put the time in
While each level of the CFA requires a minimum of 300 hours of study, the recommended prep time for the Series 7 exam – assuming you’re new to the industry – is 80-100 hours. This should mean not only consuming the relevant study material, but undertaking at least 1,000 practice questions and taking live exams so you can gain an understanding of the pressure you’ll be under on the day.
2. Think concepts, not questions
A common mistake made by test takers is memorizing answers rather than digesting the actual material, Marks said. It provides a false sense of confidence and is a formula for not passing. When you simply pair questions and answers, wording and delivery can change, and you’ll need to be flexible enough to adapt. “People try brute force to memorize formulas rather than understanding the concepts. If your memory fails on the exam, there is no backup,” he says.
3. Don’t waste time on the technical subjects
In the Series 7, a lot of candidates are guilty of spending way too much time on the options and corporate bonds sectors. “These two topics account for about 20% of the exam,” says Marks. "The old story about the Series 7 was that options and municipal bonds used to make up close to 50% of the test – that was your parent’s Series 7, but that’s not the case anymore. There’s more variety and more emphasis on clients and constructing portfolios for them. There’s a trend towards testing practical knowledge to ensure that people are well equipped to meet clients’ investment needs."
4. Know the bell curve rule
There are two facts to consider when you’re pondering how much time to spend on each question. First, there are 260 questions in the Series 7 exams but only 250 count. The remaining 10 are experimental questions used by FINRA to help improve the test in the future. So, don’t freak out if you see a question on an unfamiliar topic; this can put you off other questions. Second, there’s a bell curve approach to the exam. The first and last 25 questions are the easiest, so don’t panic if it suddenly gets more difficult.
5. Train for what you’re getting yourself into
The Series 7 exam is six hours long. It’s a beast. There’s a reason you need to immerse yourself into practice exams rather than simply bite-sized study chunks. You need to train like an athlete to get your mind and body used to this marathon period of time.
6. Make sure your study material is up-to-date
This sounds like a small thing, but out-of-date study material means that you’ve pretty much missed the boat. This is particularly the case as regulators change the rules ever more swiftly. The study material you use must be less than a year old.
"Keep an eye out for crowd-funding questions, which may come up," Marks said. "FINRA will also heavily weight questions on topics that have been the subject of abuses by industry personnel. Examples include variable annuity sales to senior citizens and sales of structured products to less sophisticated investors,” he adds.
FINRA constantly updates the Series 7 content outline. One premium topic is making suitable investment recommendations. “There’s a major trend toward the suitability of investments on the examination," says Marks. "It’s not so much about rote memorization as it is knowing how particular clients would want to construct a portfolio and knowing what types of products would be appropriate for them.
"For example, zero coupon bonds might be appropriate for someone looking to save for their children’s college tuition, money market funds are good for a client seeking liquidity, while structured products such as equity-linked notes, sophisticated products with leverage, are likely appropriate only for institutional investors with a detailed understanding of how they work," he adds.
7. Go above and beyond
You need 72% to pass the Series 7 exam, but confidence is key. Realistically, you need to be hitting 80% in the practice exams to go into the day knowing you can pass. The bigger the margin for error, the better.
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