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The Financial Industry Regulatory Authority requires all financial workers who wish to trade securities, options, variable contracts, investment company products or direct participation programs to pass the Series 7 examination. As a regulatory agency, FINRA oversees all brokers to ensure that they meet high standards of knowledge and ethics. The Series 7 tests candidates on their overall comprehension of the role of a stockbroker and requires intense preparation to pass.
What to Expect
The Series 7 exam is a 250-question test administered via computer during two three-hour sessions. According to the FINRA General Securities Representative Qualification Examination Content Outline, candidates receive scratch paper and a basic calculator during the examination periods. Since you won't lose points for incorrect answers, you should answer as many questions as possible during the test period. The outline provides clear parameters for the exam's subject matter, which includes functions, tasks, knowledge statements and rules and regulations. Reviewing the outline is an integral part of passing the test.
Create an Effective Study Guide
Use the outline to create a study guide that includes vocabulary, job functions and roles, tasks associated with functions, knowledge statements and rules and regulations. Your study guide should focus on the content that comprises the majority of the exam questions. The outline indicates that 78 percent of the test contains information about three major job functions. The three job functions to study most are: F1, business solicitation through customers and potentials; F4, recommendation making and sharing of information; and F5, completing transactions and following through with clients. The other two job functions covered by the exam are F2, customer need/status evaluation, and F3, account management and record keeping. These two job functions only make up 22 percent of the test subject matter, and, while important, should not be the emphasis of your study time. Knowing the information covered in nearly 80 percent of the test questions will best prepare you for the exam. Additionally, your study guide should teach you the concepts instead of encouraging you to only memorize answers. You must comprehend the theories and how to apply them in order to pass.
Consider working with third-party vendors that offer classes and practice exams that simulate the actual testing process using computer-generated questions. Use caution when seeking out one of these organizations, however. Not all use up-to-date information, which means that the rapidly changing rules and regulations of the industry might exceed the parameters of the testing materials used. Some free options for practice quizzes are available online and can give you a feel for what it's like taking a test using a computer. Keep in mind that the exam takes place on one grueling day in two three-hour increments, which makes for a stressful and tough test period. Work in similar intervals to train your body for the actual test day.
Prepare to Pass the Exam
While your comprehension of the test subject matter may be in high form, you don't stand a chance if you're not physically and mentally prepared for the exam. Get a couple of good nights of rest prior to examination day. Being well rested helps your brain better function and aids recall. Eat a light breakfast so you're not hungry for the first three-hour increment. Psych yourself up ahead of time and visualize successfully completing the test. Avoid dwelling on mistakes along the way. If you don't know the answer to a question, move on. One or two questions aren't big deals. And take some of the pressure off yourself. Not all brokers pass the Series 7 on their first try. If you fail it, you can take it again in six months.
Vicki Wright, writing and editing professionally since 1996, has extensive business management, marketing and media experience. Wright has a Bachelor of Science in socio-poltical communication from Missouri State University and became certified as a leadership facilitator from the Kansas Leadership Center in 2010.