There are over 40,000 individuals per year who take the Series 7 examination, with only two-thirds passing. The others need to tell their new boss that, sadly, they won’t legally be able to trade securities. Likely not a fun conversation to have.
The key to passing the Series 7, and all tests really, is preparation. But just putting in the hours may not be enough. You’ve got to prepare strategically. Below are five things about the Series 7, or the General Securities Representative Exam, that you may not be aware of, courtesy of Brian Marks, managing director at Knopman Financial Training, a New York-based FINRA licensing exam preparation firm.
Keep them in mind as you put in all the work and before you walk in that building.
Certain topics get all the attention, but it’s not always the path to a passing score. The big two on the exam, according to most reps who have taken the exam, are municipal bonds and options. But these topics only account for about 25% of the exam and that percentage has declined in recent years. Don’t forget about topics such as investment companies, retirement plans, annuities and direct participation programs. Each of these topics could likely account for 10-15 questions.
There are multiple ways to a passing score on the examination. The exam is approximately 30% math (e.g. options, margin and convertible bonds). Some candidates feel strong in the math and will plan to score well there, allowing for a slightly weaker performance on the regulations. Other candidates “fear” the math – that’s okay too. Candidates who are stronger on the qualitative concepts and regulations and count on many of those questions on the exam.
The exam environment is highly regulated. When going into the exam, the testing center will provide you with a basic 4-function calculator, an erasable marker and an erasable note pad. You cannot bring any of your own materials to the exam. If you want to simulate test conditions, go to an office supply store and purchase these items. This will help make you more comfortable on exam day.
Don’t skip the book. Many registered reps advise only completing tons of practice questions and not reading the book. In fact, a large percentage of candidates who pursue this strategy do not pass. Do all the work and you will increase your chance of passing the exam on the first try.
Keep abreast of rule changes. The FINRA Content Outline specifically notes that candidates are responsible for staying abreast of all rule changes. So, if a new rule goes into effect just prior to your exam, that topic is fair game. Be sure to follow-up with your training provider prior to the exam for any recent rules changes.
Knopman Financial Training is a FINRA Licensing Exam preparation firm. Knopman offers Live, Virtual, On-Demand and Mobile App training programs.