Recent questions have been raised about possible changes to this difficult exam. In short, ‘Is the Series 86 Exam on the verge of a change?’
Up to this point, we only had a suspicion of a possible pending change. Given the noticeable difference in difficulty between this exam and many other exams that FINRA requires, something seemed likely to change. Although we cannot say for sure, if or when, this exam will change, recent FINRA proposals raise some questions. In our opinion, there are plenty of reasons why regulators may take a second look.
Series 86 Exam on the Verge of Change? Could It Get Easier?
One reason why we believe regulators would be right to take a second look at this overly difficult exam is the amount of time required to pass the Series 86 relative to other high-level, and difficult exams.
For instance, the exam required by investment bankers, the Series 79 Exam, was shortened in recent years and only includes 75 multiple-choice questions (plus 10 experimental questions). This is much less onerous, and another reason why the comparable Series 86 Exam is different. The Series 86 Exam, as of this writing, comprises 100 multiple-choice questions, plus an additional 10 experimental questions. Additionally, the questions in the Series 86 exam are highly analytical, and tend to be more difficult.
To become an investment banking representative, you must pass the Series 79 Exam. The Series 79 pass rate is 73. However, the duration of the exam is only 2.5 hours, which is almost half of the 4.5 hours for the Series 86 exam. We should also point out that many students we work with have reported running out of time for the Series 86 exam.
So What’s Next?
Public filings available on the Federal Register website, indicate pending changes. A proposal appears to have been made to shorten the Series 86 Exam to 85 questions (closer to the Series 79 Exam) while keeping the allotted time (4.5 hours) the same. However, we would be surprised if this shorter exam leads to easier questions. In the past, when exams, such as the Series 79 Exam, have been shortened, the content has stayed roughly similar. That said, fewer hard questions, may be better than many hard questions.
Were there to be any changes on the Series 86 Exam, we suspect the above approach would be accepted, or at least palatable, for regulators. A very large number of highly competent (and intelligent) students that we tutor report running out of time on the exam. Many questions, even when thoroughly understood, can take up to five minutes, in some cases, to complete. Enough questions like this, can make it is easy to see why the exam can take 4.5 hours.
In short, we await any further guidance on whether this exam will eventually change. Like most changes at the SEC, or FINRA, they may take longer than anticipated. So, for those studying for the exam, we recommend carrying on as if the exam is unlikely to change. If you have any questions, or would like to talk with a tutor, please feel free to reach out. Good luck!