Series 7 Exam Information

One of the fast growing business nowadays is the Stock brokerage industry.  As the industry grows, so is the demand in the Stock broker positions, starting from broker trainee to managerial positions like a portfolio manager. Now, as we witness the development of the stock brokerage industry we also the changes in the business competition in the individual firms and the how the training and professional growth of the brokers.

For example before there is no need for a college to a degree to become a Stockbroker, as long as you have a business background. But now firms require a degree before hiring an employee and getting your license is a must to be called a Stock broker and to land a job. The Series 7 Exam is a key exam for a Stock broker to pass, along with the Series 63 exam.

Series 7 Exam Details to Pass

lady taking Series 7 Exam There are several examinations that you need to take on your way to reach your dream. These tests vary from one state to the other in the United States. The most common exam to get your license is the Series 7 exam, or the General Securities Representative Exam (GSRE). It is a test for registered representatives and is administered by the Financial Industry Regulatory Authority (FINRA). This is the license to trade or buy and sell financial and investment securities. We have checked an overview of the Series 7 examination, now we will look deeper and see what is really going on during the test and the preparation to ensure the success in passing the test and getting your license.

Get the Best School

In order for you to get your license to buy and sell financial securities you need to be sponsored by a member firm of either FINRA or Self-regulatory Organization (SRO). This is a must to be eligible to even apply for the Series 7 exam. So the first step in becoming a Stockbroker is to get your choose the degree you want to take and select where to enrol from one of the best schools.

The degree that firms preferred is Finance although you can still take another degree such as accounting, economics, statistics, and mathematics. Any of the degree listed above gives you a background that you will need during your application and exams. It is not a general rule but wherever you go the applicant from a prestigious school always get to be the first choice.

Do Good in your Academics

Being included in the Stock broker field needs you to be a go-getter kind of person. The fierce competition is always present in trading field and the only way to stay on top is to be excellent every step of the way and there is no greater training than to start being the best even from school. Once being competitive seems natural to you then your mind is set to perform always. This is even better for you during the job application in large firms. This will serve as your ticket to get the job or even offered internships during summer.

Apply for Internships

Before you fully become an established broker you will go through stages in the broker professional career. The first stage is being an intern in a one of the firms. Normally this happens during the summer and your best performance will earn you a spot during the internship application. It will allow you to gain a real world experience in the high stakes finance industry while giving yourself an edge to be distinguished from the rest of your classmates.

At the end of the day, they could be the set of people you will find yourself competing with. As you try your luck on the summer internship try to find, in case you have options, to check the firm’s background and go with the once focusing in wealth management and financial analysis. Junior Stock brokers get a good salary, which could range between $40,000 to $60,000, but it all depends on the firm and geography of the company.

Aim to be a Part of the Firm

Being a summer intern gives you a step ahead of your classmates however getting absorbed by the firm to be an employee will give more opportunities. This is of course based on your performance during your internship. Do everything you could impress your boss to get the job right away after graduation. This way you save the time and effort plus it is an automatic ad on in your resume. As soon as you work in the firm and you become a junior Stock broker, you now a chance on getting a sponsor for your Series 7 application.

Apply to get the Series 7 Exam

In your application, you must file a Form U4 through the Web CRD system. That is for the FINRA member firms and the approval will be advised to the firm accordingly. For a non-FINRA firm you need get an SRO sponsorship and must secure a Form U10 to FINRA and once approved, you will be notified by the Testing and CE department through email. Upon application, the registration fee is $290 as of the July 2014 update.

What to Expect About the Exam Process

The test is for a six hour exam broken into two three hour sessions available in any weekday. The examinee needs to answer the 250 questions plus another 10 pre-test items. In order to pass you need to have at least 72% correct answers.

Is There a Retake if you Fail?

How to Become a Junior StockbrokerYes. You can still take the Series 7 Exam again until the maximum of three tries. Your sponsor firm will then receive a notification that you failed and you still have a choice to request for reapplication after 30 days since your last attempt. This option to reapply is not available and the window is close until after the 30 day waiting period. As soon as the window opens you have a 90 day period to register and retake. The problem is since it is a retake; the sponsor firm will be charged another $200 for your registration.

Normally the firm shoulders the payment and there is no agreement to terminate you in your position should you fail but it is possible that the sponsor firm will request you for the reimbursement. The third time you take the exam and still failed then the waiting period will extend to six months. The reason behind it is a cumulative expense at $600 on your third attempt and it is not a small amount for an exam. In short there is a need for thorough preparation on the examinee part. The six month window is to make sure the examinee readiness to take the test and pass it.

Ways to Prepare for the Series 7 Stock broker Exam

As much as possible as a broker everyone wants to pass and get his or her license the first time you take. Who wouldn’t want that, right? In fact for the first time passers of the Series 7 exam, the employers are impressed and often give higher positions. There is an impact to your employers’ trust and expectation to your capability.

To make sure the possibility to pass is bigger you may consider taking refreshers and online test. There are several sites to choose from that will give you the tutorial. These sites normally give you common questions to set your expectations on the test items. Also you will be given the same time frame to finish the test. This prepares you to use your time wisely and finish all the questions during your actual examination.

Key Points for the Test Questions

Another tip for the actual Series 7 Exam is to concentrate on the main topic that the questions are based on. The majority of the 250 item test comes from Debt and Securities Option and the rest are from other subjects. Here are the key points to remember and concentrate on in your review to enhance the possibility of passing.

Topics Test Questions

Equity Securities 10

Debt Securities 60

Options 40

Trading Markets 20

Customers Accounts 20

New Issues 15

Investments Companies 25

Taxes 20

Regulations 25

Analysis 15

Taking these tips into consideration and following them would enhance the possibility of you passing the Series 7 Exam and getting your license. Bear in mind though that passing it the first time speaks of great things that you can offer as a Stock broker. It is indeed an accomplishment. After getting your license to trade securities and you have proven your competence to function as a registered representative, you are ready to check other license for another specialization in the brokerage industry.

As a trainee you have options and getting your Series 7 license, which means you are already considered as a senior broker and often times given higher responsibility. This is now your opportunity to show your ability by closing several deals. Target to always hit your quota to give you more accounts under your broker portfolio and getting higher Stockbroker commissions.

Leave a Reply