It is essential that you pass the Series 7 License Exam before working in the financial sector as a buyer or seller of stocks, bonds and other investments. The exam is set by the Financial Industry Regulatory Authority (FINRA) and deals with a number of publicly traded products. A member of FINRA must sponsor you if you want to take this exam, although the state will sponsor a Registered Investment Advisor in some instances.
If you want to work with retail investors, this is just one license you must hold. Licensing requirements vary from one state to the next, but the Series 7 is one license held by registered brokers and dealers. This is a means of giving the public confidence in your services.
There are 260 questions on the exam. Your mark to pass is 72%, which is achieved by an average of 66% of applicants. Anything below 72% is considered a fail, while the average passing score is 73%. This leaves 10 experimental questions for practice. The current exam cost is $265, which is non-refundable. Confirm this sum when you apply.
Usually, applicants need to complete a U-4 in which they disclose previous work history, any criminal convictions, and other important details which could influence their ability to work as a financial advisor. Exams are held daily, so pay your fee and make an appointment. Sit yours over 6 hours in two time slots set back to back, featuring 125 questions each.
The multiple choice format is easy to use. Select one from a possibility of four answers. This means you can guess and still get the answer right. A reference book will be supplied in some testing centers and this contains things like clippings from financial publications. You can also use a non-programmable calculator which is frequently provided for you.
Questions refer to things like ethical trading, evaluating the profile of a client to assess his risks prior to investing, and the technical aspects of opening accounts, buying, selling and transferring assets. Answer questions pertinent to record keeping, communicating with the client, and advising him. Prove that you understand what it means to stand up to scrutiny by customers, regulatory bodies and the law.
You must know how to follow clients’ directions to buy or sell according to their specifications. With this licensing regulation in place, customers are protected against fraudulent or ignorant behavior in the financial industry.
