Series 7 Test

The Series 7 test, also known as the General Securities Representative Exam, is administered by Financial Industry Regulatory Authority (FINRA). This test allows a stock broker to make trades with securities, including corporate and municipal securities, and investment company products and options. The Series 7 test is the most comprehensive of the securities licenses available. Passing the Series 7 test is required in order to register with FINRA, as well as take other tests offered by FINRA. In addition, in order to work as a broker in some states, an additional license, such as a Series 63 or Series 66 license, may also be required.

To take the Series 7 test, you must obtain sponsorship from a financial company that is a member of FINRA. The test costs $265.

The Series 7 test consists of 260 multiple-choice questions. It is comprised of two parts, with 125 questions in each part. Ten additional questions are added to the Series 7 test, but remain unscored. You are given three hours to complete each section, for a total of six hours. You must obtain a passing score of 70 percent, or 175 questions correctly answered, in order to pass.

The Series 7 test is broken down into seven sections.

• The largest section, Providing Customers with Investment Information and Making Suitable Recommendations, consists of 123 questions. This section tests your knowledge of the various types of securities available, determining the risks and rewards for each type of security, providing customers with information about investments, offering alternatives when necessary, making customers aware of tax implications, and providing cost information for clients.
• The second-largest section of the Series 7 test, Understanding and Explaining the Securities Markets' Organization and Participants to Customers, accounts for 53 questions. In this section, you will need to be able to explain how the marketplace works and how various securities are sold. You will need to understand how global events affect the market and how to remain updated on economic news.
• The third section, Handling Customer Accounts and Account Records, contains 27 questions. For it, you will need to be knowledgeable of the various accounts available, choosing one to fit a customer, obtaining approvals, updating account records, and executing customer requests.
• Another section of the Series 7 test, Monitoring Economic and Financial Events, Performing Customer Portfolio Analysis and Making Suitable Recommendations, has 21 questions. In this section, you will be asked how to review customer accounts, offering advice about investments, and keeping them informed about their account.
• Then there is Processing Customer Orders and Transactions, with 13 questions. This section of the Series 7 test assesses your knowledge of the various types of orders, completing order tickets, entering orders, checking for open order notices and making the customer aware of settlement procedures.
• The Prospecting for and Qualifying Customers section contains nine questions that test your knowledge of customer contact through various means and conducting lectures and forums for potential customers.
• The smallest section of the Series 7 test, Evaluating Customer Needs and Objectives, contains only four questions. This section tests your knowledge of developing and maintaining customer profiles and helping customers determine their goals and needs.