Do you have trouble deciding what securities exams to take?
Never worry, we assure you that you are not alone in this.
Ride with us to uncover appropriate tests/licenses to consider based on your area of interest in the securities industry.
At the end of this Series 7 vs Series 63 article, you’ll learn the:
This article will provide you with the relevant information you need to decide to take the Series 7, Series 63, or both.
Let’s dive right in!!
What is Series 7
The Series 7 exam is a general securities representative (GS) exam administered by FINRA.
The general securities representative exam is well detailed, with an in-depth knowledge evaluation of candidates taking the exam.
The in-depth content of the exam seeks to assess the extent to which prospective general securities representatives can perform critical functions when licensed to do so.
These critical functions have bearing in the area of purchase and sale of corporate securities, solicitations, direct participation programs (DPPs), investment company products, variable annuities, municipal securities, options, and government securities.
Series 7 License
What is the Series 7 license?
Series 7 license is known officially as the general securities representative (GS) license.
The Series 7 exam and license are both administered by the Financial Industry Regulatory Authority (FINRA).
Broker-dealers and banks prefer to recruit Series 7 licensees because they are sure they will be valuable assets to have received a license.
Series 7 licensees are readily recruited into the financial services industry.
Holders of the Series 7 license are usually called “registered representatives” by FINRA and generally termed “stockbrokers.”
The Series 7 securities license authorize holders to sell virtually any type of individual securities.
The permitted securities that the Series 7 licensee can sell are outlined below:
- Municipal bonds
- Corporate stocks and bonds
- direct participation program (DPP) partnerships
- Variable Annuities
- Packaged securities
- Mutual funds
The securities (or investments) that the Series 7 license does not permit you to sell are:
- Real estate
- Commodities futures
- Life insurance
How to get series 7 License
We have outlined and expatiated the steps necessary to earn a Series 7 license below:
- Take the SIE Exam
Elementary topics are covered in the SIE exam, such as understanding the regulatory authorities, acceptable ethical practices, and knowledge of products.
This elementary nature of the SIE exam makes it ideal for taking the exam before taking the Series 7 exam.
The Series 7 exam difficulty level is higher than that of the SIE.
After passing the SIE exam, a four-year window will be opened for you to take and pass any Top-Off exam such as the Series 7 exam.
The SIE is a corequisite exam for Series 7.
The above means that both exams can be taken simultaneously or anyone can be taken before the other.
The above implies that you can take the Series 7 exam first, pass it before taking the SIE, and vice versa.
There are no stringent rules in the order you can take both exams.
The “corequisite” that FINRA specified means that you are required to PASS both exams to register for and process the Series 7 license.
- Secure Sponsorship for the Series 7 Exam
Sourcing for sponsorship to enable you to take your series 7 exam is a very crucial step in ultimately getting your Series 7 license.
To be eligible to take the Series 7 exam – representative-level qualification exams, you must be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm.
Your sponsorship firm must file a Form U4 (Uniform Application for Securities Industry Registration or Transfer) to enable you to register for the Series 7 licensing exam.
Series 7 has an exam fee, and this is most times covered by the sponsoring firm.
Now, I guess you realize how crucial the sponsorship thing is and the benefits accrued to it.
Do well to start looking for sponsorship in good time.
- Study for the Series 7 Exam
Taking the Series 7 Top-Off exam is the next step after securing sponsorship for the exam.
While most candidates take the Series 7 exam first, it does not change that you can decide to take the SIE exam before taking the Series 7. It is based on preference.
Unlike the SIE exam that most candidates have confirmed is not challenging to attain the passing scores, the Series 7 is not a walk in the park.
Studying for Series 7 with determination, discipline, purpose, and planning is crucial to passing the exam.
Fortunately, many retail brokerage firms have organized training or, sometimes, affiliated eternal trainers to help you through the exam preparation.
Review course and exam preparation are essential to helping you ace the Series 7 exam at a first time try.
The exam has 125 questions that are multiple-choice types, and you have 3 hours and 45 minutes to complete them.
- Pass the Series 7 Exam
It is important to stress that the Series 7 exam has 125 multiple-choice questions to be taken in 3 hours and 45 minutes (225 minutes).
The exam has a passing score of 72%.
The above implies that you must answer at least 90 questions correctly out of 125 total questions to pass the exam.
On passing the Series 7 exam and having passed the SIE exam before this time, you are few steps away from getting licensed.
- Register for Series 7 License
After satisfying the four criteria above, you must proceed to register for the Series 7 license.
After meeting all the state laws and regulations where you transact business and passing background checks, you will get licensed to conduct business in such a state.
Career Outlook for Series 7 license
The FINRA Series 7 license – the General Securities Representative license is relevant to a license holder, as this avails a holder the opportunity to work in any the respect below:
- Financial Advisor.
- Financial Planner.
- Registered Representative.
- Compliance Officer.
- Certified Financial Planner (CFP).
- Registered Client Service Associate.
Registered Representatives (RR)
Registered representatives (RR) are financial professionals who work for a client-facing financial firm such as a brokerage firm.
RRs serve as representatives for clients who are trading investment securities and products.
Registered representatives may be employed as:
- Financial advisors
- Portfolio managers.
As financial professionals, RRs can deal with client transactions in the securities markets and ensure they transact business in their client’s best interest.
Registered representatives are primarily known as “transaction-based service providers” because they buy and sell securities for clients.
For registered representatives to execute the transactions above, they must be licensed to sell the designated securities for clients they represent.
You are mandated to pass the Series 7 and Series 63 securities examination to become licensed as a registered representative of your sponsoring firm.
Both (Series 7 and Series 63) exams are administered by the Financial Industry Regulatory Authority (FINRA).
Series 7 license enables registered representatives to buy and sell stocks, mutual funds, municipal securities (‘munis’), options, and certain variable contracts (e.g., insurance or annuity products) for their clients.
These licensing tests are regulated by FINRA and Securities and Exchange Commission (SEC).
These licenses enable RRs to conduct different types of transactions that the licenses permit.
Series 63 license enables registered representatives to trade variable annuities and unit investment trusts (UITs).
A better portion of the Series 63 exam is geared towards the requirements of the state where you transact business.
RRs can alternatively get the Series 65, or Series 66 (Uniform Securities Agent State Law Exam) licenses to expand their set of allowable activities to accommodate more functionality.
RRs must uphold the suitability standard of the regulatory firm.
What is Series 63?
The development of Series 63 is owed to the North American Securities Administrators Association (NASAA) .
Administration of the Series 63 exam is done by the Financial Industry Regulatory Authority (FINRA).
NASAA’s development of the Series 63 exam was in collaboration with securities industry representatives and financial industry associations.
Series 63 exam is also the Uniform Securities Agent State Law Exam.
This examination has the designation of “State Law” because it tests the extent to which candidates taking the exam understand the state’s laws and regulations in which they will conduct transactions.
The Series 63 exam has 65 multiple-choice questions containing the topics listed above.
Of the 65 questions, 60 questions count towards your exam score, while the other 5 questions are pretest questions that do not add to the 60 question score.
The 5 pretest questions are pretested intentionally for the possibility of adding them to functional question banks.
These pretest questions are randomly distributed within the exam questions.
The duration of the Series 6 exam is 1 hour 15 minutes (75 minutes).
The exam pass score is 43; candidates must correctly answer at least 43 questions out of 60 questions that will be scored.
Hence, the Series 63 exam qualifies candidates that pass the exam to become Securities Agents.
This exam’s scope of knowledge covers the essentials of securities regulation as stipulated in the Uniform Securities Act.
Relevance of a Series 63 Study Guide
Series 63 exam study guide is quite important as it consists of the entire content and format of the exam.
The study guide also provides valuable information in NASAA’s Model Rule, Uniform Securities Act, and Statement of Policy.
Before taking the Series 63 exam, the study guide comes in handy as a quick exam revision material.
Series 63 Exam Structure
The Series exam is a closed-book exam, which means external materials and resources like textbooks are not permitted as references for the exam.
On request, scratch paper can be provided to exam takers by the proctor in charge of the exam.
Each section score and the total score for the exam is seen by the candidate at the end of the exam.
The above means you do not need to wait with anxiety to get your exam score, ensuring transparency in the examination process.
The Series 63 exam has a minimum competency that is based on a criterion.
The above statement implies that; the minimum passing criterion for the exam is 43/60.
Once you meet this criterion, you are considered to have attained the minimum competency level for the Series 63 exam.
The process of assembling the Series 63 exam is termed “on the fly,” done by FINRA. In the pool of questions, each has two parameters – the “content” and “difficulty” parameters.
The above implies that each question is structured to meet the standard specifications regarding content and difficulty level matching other exams in the same Series.
Series 63 Exam Procedures
Taking about the Series 63 procedures, it is not such a complex procedure considering that the exam does not have a corequisite.
You have to be patient during the entire exam registration process and follow guidelines as clearly spelled out below for your perusal.
If you work with a FINRA member firm, your firm should file Form U4 (electronic form) for you.
If you are unemployed or work for a non-member FINRA firm, you can proceed to FINRA.org to open an enrollment window and make payment of the $147 examination fee.
Kindly open the “Enroll for a Series Exam” page on the FINRA.org website to register for the Series 63 exam.
A 120-day window will be opened for you once registration is finalized.
Within these 120 days, you can schedule your exam for a date that best suits you.
Series 63 Exam Failure Waiting Period
There is a need to specify the waiting period for the Series 63 exam.
Information about the waiting period is beneficial to clients that have attempted but failed the Series 63 exam.
Below we have clearly outlined the minimum period that you must wait before retaking the Series 63 exam. A minimum period of:
(1) 30 days from the day you failed your first exam to the second enrollment for a rescheduled exam;
(2) 30 days from the day you failed your second exam to the third enrollment for a rescheduled exam;
(3) 180 days from the day you failed your third exam to the fourth enrollment for a rescheduled exam.
After failing the Series 63 exam thrice (3X), you will need to subsequently wait for a retake of the exam after 180 days.
These waiting periods are the same for exams sponsored by FINRA.
What is next after passing the Series 63 Exam
Super Congratulations! You have successfully passed your Series 63 examination.
You have fulfilled a portion of becoming licensed as a Series 63 holder by passing the exam.
However, you are not yet eligible to transact business until you get the Series 63 license from the state where you conduct transactions.
The next step in line is to get your Series 63 license.
To get this license, you must know and conduct your transactions according to the laws and regulations governing the state where you transact business, amongst other requirements that vary in different states.
On satisfying the state’s requirements where you conduct business, you will get licensed, which authorizes you to transact business as an Investment Adviser.
What is an Investment Adviser?
Investment Adviser refers to a firm or individual that gets compensation for providing investment advice to clients, analyzing securities, and issuing securities reports.
An Investment adviser can be any of these financial professionals listed below:
- Investment Consultants
- Money Managers
- Financial Planners
- General Partners of Hedge Funds
The list goes on to include other financial professionals who get compensated for providing securities advice to clients.
It is mandatory for investment advisers to register with the state securities authorities where they transact business or with the Securities and Exchange Commission (SEC) to enable them to conduct business legally, having met all requirements.
You can readily visit Investor.gov – the SEC’s online resource that helps investors make informed investment decisions and avoid being defrauded.
The online resource also provides a free “Check Out Your Investment Professional” tool, which helps investors check for investment advisers’ license and registration status.
Investment Adviser Duties
Investment adviser function in the following respect listed below:
- Provision of investment advice to clients.
- Advice on specific securities such as mutual funds, bonds, stocks, commodity pools, and limited partnerships.
- Benefits of investing in securities as against other types of investment such as real estate and coins.
- Market trends advice
- Asset allocation
- Provision of securities selective list
- Advisers selection or retention process
Series 7 and Series 63 | Differences
Series 7 and Series 65 significant differences are well outlined below:
- The Series 7 exam is also called the General Securities Representative (GS) Exam; the Series 63 exam is called Uniform Securities Agent State Law Exam.
- Series 7 is a FINRA Representative-level exam administered by FINRA; Series 63 is a NASAA exam administered by FINRA.
- The corequisite for the Series 7 is the SIE; Series 63 has no corequisite to obtaining the license.
- Series 7 qualifies candidates to become Securities Representatives, while Series 63 qualifies candidates to become Securities Agents.
- The exam cost for Series 7 is $245, while that for Series 63 is $147, making the Series 7 exam more expensive.
- The Series 7 passing score is 90/125 (i.e., 72% pass), while the Series 63 passing score is 43/60 (i.e., 43 questions must be answered correctly of the 60 scored questions).
- The duration for taking the Series 7 exam is 3 hours and 45 minutes (225 minutes), while that for Series 63 is 1 hour 15 minutes (75 minutes).
- The total number of exam items (multiple-choice questions) for Series 7 is 125, while that for Series 63 is 65 multiple-choice questions with 5 pretest questions that do not count toward a candidate’s score. So the total number is 60 scored questions.
If your dream job designation is to become a Securities Agent, your dreams are valid and achievable.
We have carefully detailed in this article what is need to become a Securities Agent.
You should consider taking the Series 63 exam and follow through with all other steps to enable you to get licensed and transact business legally as a Securities Agent.
Again, the Series 7 license is what you should target if you are more interested in becoming a Securities Representative.
Do well to go through all the requirements for obtaining both licenses.
Consider the kind of job that each license enables you to do before deciding on which license to pursue.
We strongly advise that you stay committed and aim for the stars.
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