Guide to the Series 7

What is the Series 7 License?

• The Series 7 license is awarded to an investment professional when he or she passes the General Securities Representative Exam (more commonly known as the Series 7 examination). The obtainment of the series 7 license is mandated (enforced by the SEC and FINRA) to become a Registered Representative of a broker dealer in the United States. When obtained, the license will enable the individual to talk to prospective clients (or clients) in regards to investment advice.

• The Series 7 license is the most comprehensive of the licenses that permit an individual to communicate with retail investors. As a result of the privileges granted by the Series 7 license, the majority of analysts, account managers and other professionals employed with a registered Broker-Dealer, hold the certificate.


What is a Registered Representative?

• A registered representative is a stock broker or account executive; the individual who holds this title is granted permission, by the United States Federal Government and coordinating agencies, to sell securities to investors.

• A registered representative will typically work for broker-dealers licensed by the Self-Regulatory Organizations of the New York Stock Exchange, the National Association of Securities Dealers (NASD) and the Securities and Exchange Commission (SEC).

• To become a Registered Representative, an individual must obtain sponsorship from his or her employer, typically a broker-dealer firm, and subsequently pass the FINRA-administered Series 7 examination. In addition to obtaining the Series 7 license, a number of states will also require broker-dealers to pass the Series 63 examination.

What is on the Series 7 Examination?

• The Series 7 examination is a six-hour, 260 question test that is administered and owned by the Financial Industry Regulatory Authority (FINRA). Of the 260 questions, 250 will count towards the participants final score.

• The Series 7 examination covers a number of finance subjects and a wide range of investments, including: stocks, options, investment company products, bonds and limited partnerships.

• To pass the test and obtain the Series 7 license the participant must score above a 70%; if the individual scores above a 70%, they will be immediately granted the Series 7 license (General Securities license).

• The average score on the Series 7 examination is roughly 73%, with approximately 65% of test-takers achieving a passing mark. When the candidate receives sponsorship from their respective employer, they will be provided with a comprehensive study binder issued by FINRA.

• As of November of 2010, registration costs for the Series 7 examination totaled $265.