The Series 63 licensing exam is something that all financial professionals that have either their Series 6 or Series 7 will have to pass to practice in most American states.
And in our article today, we are covering tons of useful information about this securities exam including:
Series 63 Exam Overview
A brief overview of what the Series 63 is all about is a great starting point to get us into the flow of things.
It’s critical to note if you want to sell securities as a broker-dealer in just about any state in the United States, you will need this license.
To begin, this is a North American Securities Administrators Association (NASAA) exam that’s administered by Financial Industry Regulatory Authority (FINRA).
It is also known as the Uniform Securities Agent State Law Examination.
Test-takers for this exam would already have passed other FINRA Series exams, as well as the Securities Industry Essentials (SIE) qualification exam.
A form U4 is not a prerequisite either.
What about sponsorship from a FINRA member firm?
That’s not needed at all.
Why is the Series 63 a critical exam that’s essential for broker-dealers that have secured either their Series 6 or 7 licenses already?
Well, this is a state law exam that’s a requirement in 44 states in America.
The Series 63 exam is not required by broker-dealers in the following states.
- The District of Columbia
- Puerto Rico.
So what does the FINRA 63 test?
Well, it looks at a candidate’s knowledge and understanding of the state laws that deal with various fiduciary obligations, ethical practices, and other regulations.
Now let’s talk a little about who would need a Series 6 license.
Well, anyone that wants to sell securities within the securities industry in a nutshell, for example, someone selling annuities.
Those that might need to pass this licensing exam might work at a brokerage or investment firm, act as a financial adviser or insurance agent, or work in investment banking.
Let’s take a brief look at what the FINRA Series 63 covers.
The exam is split into the following topics:
- Regulations: This accounts for 45% of all questions
- Ethical practices: This accounts for 25% of all questions
- Customer communication: This accounts for 20% of all questions
- Administrative provisions: This accounts for 10% of all questions
Other quick facts you need to know about the Series 63 exam
Unlike the Series 7 exam, for example, this isn’t a lengthy test at all.
There are just 60 questions that you will need to answer.
As for a time frame, you get 75 minutes (1 hour and 15 minutes) to complete it.
That’s a little over one minute per question, so you certainly can’t dawdle when writing it.
When it comes to the overall cost, the Series 63 exam isn’t cheap.
It’s going to cost you $147 to register.
While this is an exam only administered by FINRA, it still will consist of multiple-choice questions only.
As for how hard the exam is, well, it’s not something that’s up there with the Series 7, that’s for sure.
That said, test-takers need to take it seriously if they want to pass on their first attempt.
That means making sure you put in the necessary test prep before you write.
If you don’t pass the first time, both NASAA and FINRA will give you the chance to rewrite the exam.
There are a few rules in place when it comes to this, however.
- Your second attempt can take place 30 days after your first try
- You have to pay the exam fee of $147 for each retake attempt you make
- Should you fail a third time, the waiting period between attempts moves from 30 days to 180 days
You’ve got three chances to make sure you don’t hit that massive 180-day delay between attempts.
Candidates should therefore prepare properly, but not by only using coursework.
For example, there are many excellent extras available when it comes to adding to your preparation.
- Study materials such as flashcards, practice questions, prep courses, and more
- Full practice exams
- Study guides
Series 63 Pass Rate
Now it’s time to get onto some critical information about just how hard the Series 63 exam is.
Well, when it comes to the pass rate for this exam, it gets a little tricky.
And the main reason for that is because the passing scores are state-based and therefore vary.
Finding those passing scores for each state was impossible, it’s just not easy to come across.
But luckily, there is a light on the horizon in terms of getting an idea of some kind of pass rate figure.
That’s because the Wall Street Journal in New York took the time to poll over 350 000 financial advisors who have Series 63 licensing.
That showed that only 14% of them didn’t pass the Series 63 exam on their first attempt which means 86%, well over two-thirds of them did.
That’s a pretty high pass rate, right?
But don’t be fooled.
It certainly doesn’t indicate that the Series 63 exam is a walk in the park.
And the pass mark candidates need to achieve for the exam?
Well, that’s set at 72%.
Candidates therefore will need to get 43 out of the 60 questions correct if they want to secure their Series 63 state license.
To achieve that 72% and get yourself a first-time pass, understanding the overall exam structure of Series 63 can help tremendously.
Earlier in this article, we did see that almost half of the questions on the exam cover various state regulations.
The next biggest group of questions will then cover ethical practices.
This accounts for a quarter of all questions.
That’s followed by customer communication questions which contribute a fifth of the exam in total.
Finally, the last batch, a tenth of the paper in total, pertains to administrative provision questions.
But we can go even a little deeper into the overall structure of the exam.
Here’s what’s covered in terms of overall question weight.
- Regulation of Investment Advisers: Three questions in total which amounts to 5% of the exam
- Regulation of Investment Adviser Representatives: Three questions in total which amounts to 5% of the exam
- Regulation of Broker-Dealers: Nine questions in total which amounts to 15% of the exam
- Regulation of Agents of Broker-Dealers: Nine questions in total which amounts to 15% of the exam.
- Regulation of Securities and Issuers: Three questions in total which amounts to 5% of the exam
- Remedies and Administrative Provisions: Six questions in total which amounts to 10% of the exam
- Communication with Customers and Prospects: Twelve questions in total which amounts to 20% of the exam
- Ethical Practices and Obligations: 15 questions in total which amounts to 25% of the exam
This is more than useful information to know when you are preparing for your exam, that’s for sure.
Now, let’s get onto some tips and tricks that you can follow in that regard.
Series 63 Preparation
Candidates writing the Series 63 exam shouldn’t expect a walk in the park, that’s for sure.
And you can bet that the 86% of broker-dealers that indicated to the Wall Street Journal that they passed the first time were prepared.
So in this section, we are going to cover the logical ways that you can follow to ensure that you are as well.
Experts recommend that those preparing for the exam put in at least 30 hours doing so.
That’s not counting extra exam prep such as study guides or taking practice exams either.
Increasing your chance of passing the first time
Here are a few ideas that you should consider to help you pass the exam.
Start by reading through the coursework
Ok, so this sounds very obvious, right?
But for this exam, this must be your starting point.
And here’s the reason why.
Just about every candidate that writes the Series 63 exam will notice that the coursework covers information they would never have seen before.
There’s nothing that you will find that’s recognizable and there’s a lot of legalistic speak to get through and hopefully, understand.
So make sure you read through the coursework first, cover to cover.
This is all about giving yourself the necessary overview you need to help you through your preparations.
And if things aren’t totally clear the first time, read through it again, if you must.
Take notes and highlight all key concepts
Once you’ve read through everything, take the time to go through the coursework again but this time look for key concepts.
Either highlight in the coursework or take your own notes and write them in your own words for better understanding.
All of us have a particular way we like to get key concepts into our head so you can apply what works for you at this point.
Also, realize that the coursework is text-heavy.
It’s not like the Series 6 exam, for example, where there would be formulas to understand.
Come up with a study strategy
Once you’ve gone through the coursework, highlighted key concepts, and taken notes, it’s time to come up with a study strategy.
While some of us can just wing it when it comes to studying, it’s advisable to rather draw up your study strategy to ensure that you cover everything.
That’s not just the coursework but also building in extras like using study guides, planning practice exams, and more.
Make sure you consider revision work as part of your study plan as well.
Revision is the perfect way to keep past concepts that you’ve worked through fresh in your thoughts.
Perhaps you can begin each day’s study work by going through the concepts you learned the day before.
There’s no doubt that a proper study strategy can help ensure that you are ready the moment you walk into the Prometric testing center or take the exam online.
Prepare yourself for long questions
Because a lot of what is covered in the coursework is legal speak, exam questions are extremely long-winded.
The best way to prepare for that is to find practice exams that do the same thing.
Also, it goes without saying but when approaching long-winded questions, reading them thoroughly goes a long way to understanding them.
You can even work on reading through the questions twice before you look at the answers.
But this will vary from person to person because remember, you only have 75 minutes to get through 60 questions.
And that’s quite a push.
Experts say that looking at the last line of the question will help to determine exactly what it wants as an answer.
So focus on that during your practice tests to see how it helps you in achieving the right answers.
With multiple-choice questions, a great way to approach them is to eliminate the wrong answers first up.
If you’ve read the question thoroughly, these aren’t too difficult to notice, for the most part.
On the Series 63, however, while eliminating answers is something to look to do, you will notice that two of the answers to questions are very similar.
Generally, one of these is the correct answer.
The best way to get your brain tuned to find that correct answer is by reading and understanding the coursework first up.
Practice questions and exams are a must
Other than understanding the coursework thoroughly, taking as many practice questions as you can and working through practice exams is a necessity.
As mentioned earlier, putting 30 hours into the coursework is your minimum aim.
That doesn’t include taking practice exams at all.
Do not ignore these.
They are the best indication if you understand what’s required in the official test.
And you can rest assured, if you aren’t passing practice exams, you stand no hope of getting a first-time pass when it comes to the real thing.
Thanks for taking the time to read through this article that covers the Series 63 pass rate and preparation.
This is a very different exam from Series 6 for example and those who undertake it have to be prepared to go through lots of word-heavy coursework.
Don’t let the overall pass rate of 86% fool you, either.
While you won’t need to spend as many hours as you would on other licensing exams, there’s no doubt that there’s still plenty of preparation involved.
If you have any queries, please do not hesitate to leave a comment below and we will get back to you.