How to Obtain a Series 7 License?
Before you begin to pursue a career in selling financial products, it is important that you obtain required licenses for this profession. For instance, the Series 7 license is essential for any aspiring stock brokers, and there are several requirements that must be met to succeed in getting one.
Which Professions Require a Series 7 License?
Anyone who has the Series 7 license can begin selling their financial products except for commodities, futures and insurance. So, if you have plans of working as a full time seller of financial products, you need to get this license after successfully passing the examination. Upon getting your license, you can start selling variable annuities, derivatives, stocks and mutual funds.
Who Can Administer Examinations for the Series 7 License?
Are you hoping to get a Series 7 License, they should coordinate with FINRA, known previously as the NASD. The FINRA administers the examinations for the Series 7 license.
Why Should You Take the Examination and Get a License?
The Series 7 license equips individuals with key knowledge and skill that are necessary in selling financial products. Among the areas covered in the exam include economics, tax and securities law, securities market and marketing, to name a few. Aside from training individuals to become more proficient in these areas, their clients can have the assurance that the broker they are dealing with is legitimate and reputable.
What are the Steps Included in Applying for a Series 7 License Exam?
If you are opting to take the exam for the Series 7 license, you should first find employment in a company that is either a Self-Regulating Organization or has a membership to the FINRA. However, keep in the mind that you first need to secure a license before you can be employed in these companies. So, it helps to pursue several companies and find one that can sponsor you to take Series 7 license examinations.
The Series 7 licensing examination gives financial professionals an opportunity to present their competencies in various areas of trading (not including commodities or futures. This test serves as the initial step required for aspiring stock brokers. Before you can take the examination, be sure to find a member firm that will sponsor you. This organization will also file the Form U-4 or the Uniform Applications for the Securities Industry Registration with FINRA.
Before the U-4 form is filled out, the firm sponsoring you should serve the appropriate signatory. Hence, if you pursue to submit the form without any signature of the firm sponsoring your application, then you are most likely to be rejected. Furthermore, the amount you have paid for the registration will not be refunded.
Another option is by applying as an intern at FINRA-member companies. Eventually, you can gain necessary skills that will support your goals of taking and passing the licensure examinations. When the company has seen your potentials, it will be easier for you to find a sponsor for the exam.
You may also begin by applying as an insurance sales representative. You can use this career as a pathway to being sponsored for the licensing exam for the Series 6. Once you hold a license, you can start selling mutual funds and annuities. Soon, you will be more prepared to find a better company that can sponsor you to take the exam for the Series 7 license.
Where and When are the Licensing Exams Administered?
There are several options to choose from when it comes to the location and date of taking the exam. You can find several examination centers in the United States, as well as overseas, for applicants residing outside the country, As for the date of exam, there are schedules during weekdays, and it is only a matter of determining your level of preparedness for it.
How Many Hours Does the Exam Take?
You are expected to finish the test in six hours, and there is a morning and afternoon session with three hours each. Applicants may take the test online, and you can immediately receive a feedback on the outcome of the test.
If you fail the test, there is nothing to fear about having your employment terminated by the sponsor firm. However, you need to understand that whenever you retake the test, there is a required fee of $200 for the registration. Thus, you will have to settle the fee to your employer when you have a retest.
After failing the test thrice, you need to wait up to six months before you can take a retest. It is expected that by the end of the waiting period, you would have already paid the fee of $600 since the total cost of taking the test the fourth time is $800. Moreover, you should be well-prepared for the retest, so it is best not to rush into taking the examination again when you are not ready yet.
What is the Scope and Structure of the Examination?
There are 260 multiple-choice type of questions with four alternative answers to choose from. Ten of the questions are used as sample or practice tests, so you should be able to get more correct answers from the remaining 250 questions. Keep in mind that there is no way of knowing which among the 260 questions are only sample ones, so you will have to do your best in answering all questions to boost your chances of passing the exam.
The following are the ratings given per content area:
1. Giving Customers Information – 49%
2. Securities Markets Accounts – 21%
3. Opening Clients’ Accounts – 11%
4. Clients’ Economic Condition and Portfolio – 8%
5. Marketing – 4%
6. Judgment of Your Ability to Assess Clients – 2%
The Series 7 License is designed to test basic skills and knowledge required for professionals looking to sell financial products. In case you fail, you may always have a retest after 30 days. To boost your chances of passing, you may also take mock exams to give you further details about the test. By having an in-depth understanding about the Series 7 licensing examination, you can start conditioning and preparing yourself well before taking it. This way, you will not end up spending hundreds of dollars for the retest, and you can save time by getting a license immediately upon passing the examination.