Series 7

General Securities Representative Exam

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The Series 7 exam administered by FINRA, otherwise known as the General Securities Representative exam, is the basic qualification necessary for a variety of retail sales positions within the financial services industry , most notably that of financial advisor. Holding the Series 7 qualification allows one to solicit orders from the general public for the purchase or sale of all securities products, among them:

  • Corporate securities, such as stocks and bonds
  • Municipal securities
  • Municipal fund securities
  • Options
  • Direct participation programs
  • Investment company products
  • Variable contracts

To sit for the Series 7 exam, you must be associated with and sponsored by a FINRA member firm.

Series 7 Exam Format:

The exam consists of 260 multiple choice questions, divided into two three-hour sessions of 130 questions each, with a break in between. Only 250 of these questions actually count; 10 are experimental questions being considered for future tests, but the candidate is not made aware of which ones these are.

Scoring of the Series 7 Exam:

There is no penalty for wrong answers. No two exams are alike, even for people taking the test simultaneously at the same testing center. Thus, while the standard passing score is 72% (180 correct responses out of the 250 that count), the passing score on a specific test may vary somewhat from this norm, to account for slight variations in overall difficulty from test to test.

The candidate receives an equated score, or a score adjusted for degree of difficulty, rather than a score reflecting the actual number of correct responses.

Content of the Series 7 Exam:

The questions within the Series 7 exam are designed to cover:

  • 5 major job functions performed by registered representatives
  • 17 major categories of knowledge needed to perform these functions
  • 43 groups of rules and regulations governing these functions

The 5 job functions include:

  • Soliciting clients and business
  • Assessing client financial position, needs and goals
  • Opening accounts, transferring accounts and keeping records
  • Informing clients on investments and making​ suitable recommendations 
  • Obtaining client orders, entering them and following up

The questions related to knowledge cover, for example:

  • Proper communications with clients
  • Types of securities
  • How the securities markets function
  • Securities and investment analysis
  • Types of accounts
  • Procedures for opening accounts, entering trades, keeping records
  • Business conduct and ethics

Holders of U.K. and Canadian Qualifications:

FINRA recognizes that the Series 7 exam has a great deal of overlap with equivalent tests administered by the Financial Services Authority (FSA) in the United Kingdom and by Canadian securities regulatory bodies. Accordingly, people who already hold such certifications can qualify as General Securities Representatives licensed to practice in the United States by taking a shorter version of the Series 7 exam.

The Series 17 is designed for those with equivalent FSA certifications in the United Kingdom.

It has 100 multiple choice questions and takes two hours.

The Series 37 is for those already certified in Canada, It contains 90 multiple choice questions and takes two hours and thirty minutes. A shorter exam, the Series 38, does not cover options. It takes one hour and fifteen minutes and includes 45 questions.

The Series 17, 37 and 38 exams do not qualify the holder to do business in municipal securities, however. Candidates wishing to have this qualification also must take the Series 52 Municipal Securities Representative exam, which has 115 questions and takes three and a half hours. Alternatively, the candidate may decide to sit for the full Series 7 exam instead.

Studying for the Series 7:

While some people prefer to prepare by attending formal test prep classes (such as in the formal financial advisor training programs that major securities firms used to run), self-study materials built around past actual exam questions can be more than adequate preparation for self-directed individuals.