FINRA’s General Securities Representative exam (or the Series 7) is the primary hurdle you need to clear in order to start working in the financial services industry. If you want to sell securities, you need to pass the Series 7 exam.
I’ve tutored many students for the Series 7 from various academic backgrounds. The most difficult scenario is when I get a student without a financial background or experience.
If you’re looking for some guidance on how to pass the Series 7 exam, and are new to the industry, here are the five most important tips.
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Want to Pass the Series 7? First, Take a Break from Happy Hour
Ideally you probably need about 3-4 weeks of study time under your belt in order to pass the Series 7 exam. That’s nothing compared to the CFA exam – which some say can take 300 study hours! It will seem like your days never end while you work all day then study at night, but it’s a small price to pay for an exciting career in the securities industry.
The practice tests should be your main focus. Go through as many questions as you can. Once you start getting a score of 85%+ on your practice problems, you can rest assured that your social life may be on the horizon. Most students with those scores on the practice exam leave themselves a nice buffer above the 72% required to pass.
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Understanding Concepts is Important, but Memorizing is Needed
The exam covers a wide array of material. From calculating margin maintenance requirements to being familiar with parts of the Securities Exchange Act of 1934. Unfortunately not all of it is intuitive. Some memorization will be necessary. Keep a list of terms that give you trouble, and continue to review them while you study. Understanding the concepts is key but some memorization will be needed!
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Don’t Get Lost on the Technical Topics
The Series 7 has a lot of sections that can lead you down a rabbit hole. CDOs, options, and corporate bonds are all interesting subjects on their own. But, stay focused on the minimum of what you need to know.
The test has changed from years ago when the focus used to be on municipal bonds and options. Some students have told me that coworkers, many years their senior, encouraged them to learn munis and options “inside and out.”
Helpful a decade ago maybe, but not today. Emphasis today is on clients, suitability, and broker-dealer business standards.
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Skip the Questions You Don’t Know
There are 260 questions in the Series 7 exam with only 250 that count toward your score. Ten questions experimental that FINRA uses to help improve the test in the future. Follow the advice of the British aphorism “Keep calm and carry on” for any questions you don’t know. Skip any questions that take you longer than 30 seconds to understand. Chances are you won’t remember, or maybe you’ll remember at a later time. There are a lot of questions so don’t waste your precious time on any single question.
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Train for what you’re getting yourself into
The Series 7 exam can be a beast for those not use to long exams. Any exam that requires a lunch break is daunting enough. The exam is six hours long (excluding the lunch break), so be prepared before you go in. Some people barely finish with enough time so make sure to have finished your coffee or held off on excess water consumption well before the exam so a mid-exam bathroom break isn’t necessary. How hard is the Series 7? Check out our post here for more. And if you ever need a tutor, we offer an online Series 7 tutor option or in-person. Also, check out our thoughts on some of the best Series 7 tutors NYC has on offer. Also, you know where to find us 🙂 Best of luck in trying to pass the Series 7!