General Securities Representative Exam - Series 7 Exam

The General Securities Representative Exam, commonly referred to as the Series 7 Exam, is a required exam to become a Registered Representative of a broker-dealer in the United States. The exam is a six-hour, 260 question test (250 of which count towards the final score) that is owned, maintained and administered by the Financial Industry Regulatory Authority (FINRA), which covers a broad range of investments including stocks, bonds, options, limited partnerships, and investment company products (e.g., open- and closed-end funds). A candidate must answer at least 70% of the questions correctly in order to pass. Upon passing the test, one is granted a Series 7/General Securities license.

The Series 7 license is the most comprehensive of several securities licenses that permit an agent to communicate with retail investors. For this reason, many account managers, analysts, and other executives in the employ of a registered Broker/Dealer hold Series 7 licenses. To satisfy the securities dealing requirements of some states, Series 7 license holders must also hold either the Series 63 license or the Series 66 license, depending on the state the licensee works in as well as the state his/her clients reside in. Typically, the average score of test-takers is around 73%, with around 66% of test-takers achieving a passing score. While one can study from the content outline provided by FINRA, many choose to use the materials of a third-party training vendor. As of November 2009 registration costs $265 according to FINRA.
Test Breakdown # of Questions % of Exam
Prospecting for and Qualifying Customers 9 4%
Evaluating Customer Needs and Objectives 4 2%
Providing Customers with Investment Information and Making Suitable Recommendations 123 48%
Handling Customer Accounts and Account Records 27 11%
Understanding and Explaining the Securities Markets' Organization and Participants to Customers 53 21%
Processing Customer Orders and Transactions 13 5%
Monitoring Economic and Financial Events, Performing Customer Portfolio Analysis and Making Suitable Recommendations 21 8%

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