The Series 7 license is necessary for individuals aspiring to sell different investment products. These include corporate stocks and bonds, which represent ownership in companies, and more.
Additionally, it encompasses municipal bonds issued by local or state governments and mutual funds that pool investors’ money to purchase various securities. The license also covers variable annuities, which offer a combination of investment and insurance features, along with options that provide the right but not the obligation to buy or sell assets at predetermined prices.
Furthermore, it permits participation in direct participation programs and the sale of packaged securities, enabling financial professionals to offer comprehensive investment solutions to their clients.
What is the Series 7 Exam?
The Series 7 Exam, also known as the General Securities Qualification Examination (GS), is essential when assessing an individual’s ability to perform in the capacity of a general securities representative.
The examination determines one’s ability to perform functions as a general securities representative, including sales of corporate securities, municipal securities, investment company securities, and more. Individuals must pass the Series 7 and Securities Industry Essentials exams to obtain their General Securities Representative registration.
How to Get a Series 7 License
Many individuals want to know how to get the Series 7 license. To be eligible for the exam, an individual must be sponsored by a FINRA member firm or a self-regulatory organization (SRO) member firm. These sponsorships can either come from an employer or a course such as the Financial Advisor Training Institute (FATI). Additionally, the SIE exam is a corequisite of the Series 7 exam.
Once you have a sponsor, you can register for the exam. After you register, FINRA will provide individuals with a 120-day window for the exam to be taken. You should schedule your test as soon as you receive the window to get your preferred date. On the day of your exam, you will have to take the exam at a test center or online, if applicable. You must pass the exam, which has four different components, in order to obtain your Series 7 license.
Series 7 Exam Breakdown- Key Topics & Exam Format for How to Get Series 7 License
The Series 7 Exam is made up of 125 questions and encompasses four primary job functions, including:
Section 1: Seeks Business for Broker-Dealer from Customers and Potential Customer
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- The first section comprises nine questions, accounting for 7 percent of the exam
- For this section, individuals will need to know about some of the following topics: types of communication, regulation D offering, prospectus requirements, product-specific advertisements and disclosures, processes for bringing new issues to the market, foreign securities prohibited from being sold to US investors, standards and required approvals of public communication, and more.
Section 2: Open Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives
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- The second section comprises 11 questions, accounting for 9 percent of the exam.
- Within this section, individuals will need to know information about some of the following topics: types of accounts, requirements for opening customer accounts, wealth events, customer screening, retirement plans, investment objectives, account registration types, account authorization, investment strategies, circumstances for refusing or restricting activity in an account or closing an account, physical receipt, delivery, and safeguarding of cash or cash equivalents, information security and privacy regulations, and more.
Section 3: Provides Customers with Information about Investments, Makes Recommendations, Transfers Assets, and Maintains Appropriate Records
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- The third section of the exam is 91 questions, accounting for 73 percent of the total exam.
- As a part of this section, it is essential to know information on some of the following topics: principal tools to measure financial health, types of stocks, rights and warrants, balance sheet and methods of inventory valuation, portfolio theory, electronic exchange, auction markets, tax treatments of equity securities transactions, fundamental analysis of financial statements, types of financial statements, required disclosures on specific transactions, tax considerations, types of investment returns, types of investment risk, books and records retention requirements, withdrawals and tenders, account closure procedures, and more.
Section 4: Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions
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- The last section of the exam is fourteen questions, making up about 11 percent of the total.
- For the last section, some of the information and topics an individual will need to know about include types of security quotes, trade execution activities, best execution obligations, securities lending, delivery requirements, settlement of transactions, regulatory reporting requirements, good delivery, form U4 reporting requirements, methods of formal resolution, marginal accounts, special memorandum account (SMA), and more.
The exam takes roughly three hours and forty-five minutes to complete, and an individual must be at least seventy-two to pass it.
Often, individuals will seek our coures to help them learn how to get a Series 7 license, such as the one offered through the FATI. Through FATI’s course, you can gain sponsorship to take the Series 7 exam. By completing a course through FATI, individuals have a first-time pass rate of eighty-five percent, much higher than FINRA’s pass rate of seventy-one percent*.
By passing the exam, you will have various areas you can explore within the financial industry.
Career Opportunities with a Series 7 Exam
After obtaining your Series 7 license, you can participate in various financial activities with clients depending on your areas of interest. Some include mutual funds, rights and warrants, hedge funds, venture capital, options on mortgage-backed securities, money market funds, public offerings, unit investment trusts (UITs), exchange-traded funds (ETFs), and more.
In some cases, registered Series 7 individuals may earn commissions based on the type of securities transactions they facilitate.
Prepare for the Series 7 Exam: Take the Next Steps on How to Get Series 7 License
Are you ready to kickstart your career in the financial industry with a Series 7 license? Now is the time to explore the steps needed to obtain this critical credential. Consider enrolling in the courses offered by the Financial Advisor Training Institute, which provide comprehensive preparation for the Series 7 exam. Their certificate course will equip you with the knowledge and skills necessary to succeed. Once you find the right training, take the following steps to enroll and begin your journey toward obtaining the Series 7 license.
Additional Information/Resources
* https://financialadvisortraininginstitute.org/certification-requirements/
https://www.finra.org/registration-exams-ce/qualification-exams/series7
https://www.finra.org/sites/default/files/Series_7_Content_Outline.pdf
https://www.kaplanfinancial.com/resources/getting-started/how-to-get-your-series-7-license
https://www.indeed.com/career-advice/career-development/how-to-get-series-7