Series 7 – General Securities Representative Qualification Examination (GS)

The Core Securities License

Want to work directly with clients buying and selling investments like stocks, bonds, options, and mutual funds? The Series 7 (General Securities Representative) exam is the essential license required by FINRA. This comprehensive test validates your ability to effectively and ethically handle a wide array of securities products, making it the cornerstone qualification for many client-facing roles in finance.

Who Needs the Series 7 Exam?

Often called the “stockbroker exam,” the Series 7 license is crucial for professionals working directly with clients to buy and sell securities. If your career path involves advising clients, soliciting business, or executing trades at a brokerage firm, consider this the standard industry qualification you’ll likely need.

Prerequisites: Sponsorship and the SIE Exam

Obtaining eligibility for the Series 7 exam involves two critical prerequisites:

• Sponsorship: Unlike the introductory SIE exam, candidates must be associated with and sponsored by a FINRA member firm (or other applicable self-regulatory organization member firm) to sit for the Series 7. Individuals cannot register independently.
• SIE Exam: Passing the Securities Industry Essentials (SIE) Exam is a corequisite to the Series 7. Candidates must pass both exams to achieve the General Securities Representative registration.

Here’s the typical game plan for getting your Series 7 license: First, focus on passing the SIE exam. You can tackle this independently, even before you graduate. Next, secure a job and sponsorship from a financial firm. Finally, with their backing, you’ll prepare for and pass the Series 7 exam (plus any others needed for your specific job).

Exam Scope and Content

The Series 7 exam significantly expands upon the foundational knowledge tested by the SIE, focusing specifically on the functions and responsibilities of a General Securities Representative.

The exam structure is based on four major job functions:

• Function 1 (9 Questions): Seeks Business for the Broker-Dealer from Customers and Potential Customers
• Function 2 (11 Questions): Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives
• Function 3 (91 Questions): Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records
• Function 4 (14 Questions): Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions

Wondering where to focus your study time? Pay close attention to Function 3 – it’s the biggest part of the Series 7 exam! This section dives deep into understanding investment products, figuring out client needs, making suitable recommendations, and managing accounts properly. You’ll need to know your stuff on products, risk, suitability, client communication, trading rules, and regulations.

Exam Structure and Logistics

• Format: 125 scored multiple-choice questions. (The exam also includes 10 additional unscored pretest questions, for a total of 135 items).
• Duration: 3 hours and 45 minutes (225 minutes).
• Passing Score: 72% (requires correctly answering approximately 90 of the 125 scored questions).
• Cost: $300 (exam fee paid during enrollment).
• Administration: Computer-based test administered at Prometric testing centers.

What Doors Does the Series 7 Open?

Imagine launching your finance career, advising clients on their investments, managing their accounts, and executing trades in the real market. Passing the Series 7 exam is your key to making this a reality! This core license empowers you to work directly with clients across a vast landscape of investment products. With the Series 7, you’ll be qualified to guide clients through, recommend, and execute transactions involving nearly everything in the securities world, with the main exceptions being commodities and futures contracts (which require separate licenses like the Series 3).

Specifically, holding a Series 7 license qualifies you for roles involving:

*Note: The scope of permitted activities related to municipal securities depends on when the Series 7 registration was obtained. Consult FINRA rules for specifics.

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Series 7 Exam Prep

The Series 7 license is the benchmark qualification for engaging with clients across the broad securities landscape. Recognize that this exam presents a substantial challenge, demanding significantly more depth and breadth than the SIE. Comprehensive and disciplined preparation isn’t just recommended – it’s the baseline requirement for passing and advancing your career. Nailing practice exams and focusing on those heavily weighted topics like suitability and product knowledge will be key to your success. To help you find the best tools for the job, we’ve reviewed some top-notch prep resources designed specifically for the Series 7.

Best Online Prep Course: Achievable

Looking for an online course that truly delivers Series 7 success? Achievable is our top pick! Its smart adaptive technology pinpoints your weak spots, personalizing your study plan so you master concepts faster and make them stick. With an incredible 95%+ pass rate this is your fast track to acing the Series 7!

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Best Prep Book: Series 7 Exam Prep (2024 Edition)

Pressed for time? This concise study guide by Steven Singler ($24.97) focuses on core Series 7 concepts to streamline your prep, aiming to significantly cut study time compared to traditional methods.

Additional Series 7 Review Courses