Are you an aspiring finance professional looking for a way to scale up? Current stats show that the securities, commodities, and financial services field is one of the fastest-growing sectors. But because becoming a broker, agent, planner, or broker involves handling money and investments, federal regulations are in place to ensure that only qualified and trained professionals can dispense investment advice.
So, how do you prove yourself?
One way to prove your ability to handle these kinds of responsibilities is to get licensed!
There are several core examinations overseen by the Financial Industry Regulatory Authority (FINRA). They are divided into several series, depending on what type of services and products you want to offer.
If you’ve made it to this page, then you probably already know that two of those crucial securities license exams are Series 65 and Series 7.
But which one is the right path for you?
This article breaks down all you need to know about both exams, including what you can do with each exam, the exam requirements, costs, potential salaries, and more.
Read on to determine which exam is the right move for your career.
How do you rate this Series 65 vs Series 7?
What is a Series 65 License?
Series 65 is the Uniform Adviser Law Exam, which covers laws and regulations, ethics, and other crucial topics that financial advisors must know.
Passing the Series 65 exam is a prerequisite to becoming a licensed investment advisor in your state; it is not a license in and of itself. You must also submit all requirements imposed by your state regulator before you can begin business as a financial advisor.
What Can You Do With a Series 65 License?
Aspiring securities agents often take the Series 65 exam when they have yet to pass the Series 7 exam. Subsequently, the Series 65 exam is popular among financial industry-adjacent professionals, such as accountants and those who want to begin charging for financial advice.
Series 65 exam passers often become investment advisor representatives. License holders can work in an investment advisory company and start advising clients. However, they are limited to the provisions under the specific license, which primarily covers securities.
This means passing the Series 65 in itself doesn’t permit the sale of securities.
What Is a Series 7 License?
The Series 7 examination, or the General Securities Representative Exam, assesses entry-level registered representatives‘ ability to perform their tasks. Overall, it covers the functions of a general securities representative.
What Can You Do With a Series 7 License?
A Series 7 exam passer will have the ability to solicit, purchase, or sell securities in:
● Corporate securities
● Direct participation programs
● Government securities
● Investment company securities
● Municipal securities
● Options
● Variable contracts
Once you pass The Series 7 exam, you can sell all types of securities, with the exception of commodities and futures.
Series 65 vs 7 Requirements
Thorough preparation is needed to pass these exams. The Series 7 exam is considered one of the most challenging exams for financial professionals. The Series 65, on the other hand, is the requisite first step for financial advisors—a passing score is required before you can advance your career.
Series 65 License Requirements
First, you must be at least 18 years old to obtain a Series 65 license.
You don’t need to be associated with a firm to take the exam. However, if you are associated with a FINRA-member firm, the organization is required to file Form U4. You will receive an email with instructions on how to enroll in the FINRA Series exam. If you don’t belong to a firm, you can register on the FINRA website.
After enrollment, you have 120 days to schedule and take your Series 65 exam. Make sure you study the Series 65 material thoroughly and arrive early on the day of the exam.
Series 7 License Requirements
When you pass the exam, contact your state regulator about the other requirements to become a licensed investment adviser representative. You will be asked to file Form U4 (if associated with a firm), subject yourself to a background check, pay a state registration fee, and more.
Keep in mind, to take the Series 7 examination, one should have a four-year formal education. Most have a bachelor’s degree in the following fields:
● Business
● Economics
● Finance
● Statistics
Some even have master’s degrees to maximize their earning potential, but it’s not a requirement for the Series 7 license.
One has to take the Securities Industry Essentials or SIE exams, too. FINRA calls the SIE a co-requisite of Series 7. The exam is a preliminary assessment for those who want to become financial professionals.
Most people take the SIE exam first. The results are valid for four years, so many take the pre-requisite exam before completing their college degree.
Here are the topics covered in the SIE exam:
● Capital markets
● Customer accounts
● Financial products
● Financial risks
● Prohibited practices
● Regulations
● Stock trading
A FINRA-member firm or a self-regulatory organization must sponsor you before you can take the Series 7 exam. You can not apply on your own. However, you can apply as a regular employee or intern at a financial institution and ask them to sponsor your exam.
Once you pass the Series 7 exam, you can continue to pursue your professional registration and pave your way to becoming one of the top experts in securities and other financial products.
Costs
Series 65 Exam Costs
The Series 65 exam costs $187. It has no co-requisite or pre-requisite.
Series 7 Exam Costs
The Series 7 exam costs $300. Its co-requisite, the SIE, costs $80. You can take the SIE earlier—a maximum of four years before Series 7.
Series 65 and 7 Registration
FINRA maintains stringent requirements for financial professionals who engage with the investing public. They must be registered and certified. There are also certain requirements for continuing education.
Series 65 Registration
Test takers may register for the exam through the NASAA or FINRA portals. As of April 2022, the Series 65 exam is no longer offered through online testing unless candidates have medical proof that they cannot sit for the exam in a testing center.
Series 7 Registration
A sponsoring organization must send in candidate eligibility, and test takers must wait to receive enrollment instructions by email. Then, they can take the exam remotely or at a testing center.
Those who want to take the online examination must fill out the FINRA Online Exam Administration Request Form on the official website.
Series 65 vs 7 Exam Pass Rates
Series 65 Pass Rate
Pass rates are not published by FINRA, but it is considered a moderately difficult exam, especially for those who have not taken Series 7 or SIE. Most believe the first-time pass rate is under 65 percent.
Series 7 Pass Rate
FINRA has not published a pass rate for Series 7. However, the consensus is around 65% for first-time takers. Most recognize the Series 7 as the longest and most difficult securities exam that aspiring professionals have to take.
Passing Scores
Series 65 Passing Score
Series 65 is a multiple-choice exam with 130 questions you must answer within three hours. The passing score varies by year. In recent years, it has been around 72%.
Series 7 Passing Score
The Series 7 exam contains 125 multiple-choice questions that you must complete within three hours and 45 minutes. The passing score varies for this exam also but is also around 72%.
As for the SIE, which is a Series 7 co-requisite, you must answer 75 questions in one hour and 45 minutes and get at least 70 correct answers to pass.
Salaries
Registering as a financial advisor allows you to practice as a personal financial specialist legitimately. More importantly, you can maximize your earnings in the securities industry.
Series 65 License Salary
Most investment adviser representatives earn an average salary of $68,000 a year, according to PayScale. This is an entry-level position where you can make your way up the financial and securities industry ladder and earn much more.
Series 7 License Salary
There are several professional options in the financial industry when you get your Series 7 license.
Here are some options and their average salaries:
● Portfolio manager – $84,600
● Wealth advisor – $77,000
● Certified financial planner – $73,800
● Financial planner – $69,300
● Financial advisor – $68,700
● Investment advisor – $68,400
● Investment analyst – $63,500
Series 65 vs 7 Exam FAQs
Most study for at least 2 weeks prior to taking the exam, for a total of 50-60+ hours. According to experts, up to 100 hours of studying is recommended. This exact number depends on your education and financial background.
You should invest in Series 65 study materials that include on-demand material, flashcards, and practice exams, as well as reviewing textbooks and studying for at least 50-60 hours total.
Experts recommend those that who have a background in finance should study at least 100 hours for the Series 7, while those that don’t should plan as high as 150 hours, with 20+ of these hours spent on practice quizzes to ensure you are scoring higher than average to pass the exam.
Similarly to prepping for the Series 65 exam, a Series 7 exam prep course with features like online video classes, on-demand study material, expert instructor support, and practice tests that show areas where you need to improve before taking the Series 7 exam.
Conclusion
Both Series 65 and Series 7 lead to licenses that can help finance professionals improve their careers. The Series 65 exam is a prerequisite to becoming a licensed investment advisor for entry-level positions and is much less difficult than the Series 7 exam. While the Series 7 exam is more comprehensive and requires a FINRA-member firm sponsor, as well as a co-requisite for taking the SIE exam. With Series 7, you’ll have more growth opportunities for higher-paying financial planner and advisor roles.
Sources:
https://www.bls.gov/ooh/sales/securities-commodities-and-financial-services-sales-agents.htm
https://www.finra.org/registration-exams-ce/qualification-exams/online-exam-administration
