What is the Series 7 License?

The Series 7 License is the preeminent professional license for those working in the securities industry.

Getting your Series 7 License opens doors as a financial advisor or insurance agent selling securities and increases your ability to offer the most options to your clients.

Getting your Series 7 license is a major professional milestone that many financial and insurance professionals work towards.

To get the Series 7 license, you will need to take and pass the Series 7 exam. This professional exam requires preparation, sponsorship by a FINRA member agency, and knowledge of the securities industry. Once you hold the Series 7 license, you will need to keep up-to-date with the current trends and regulations through continuing education.



What is the Series 7 License?

The Series 7 license is an official designation within FINRA that allows you to market and trade securities in the financial services industry. It is most often required for financial advisors and many insurance agents as it allows them to include securities, such as stocks, bonds, and mutual funds, as part of an investment plan to their clients. To get a Series 7 license, you will first need to register as a new candidate with FINRA and pass the Series 7 exam.

The Series 7 test, known as the General Securities Representative Qualification Exam (also known as the “Series 7 Top-Off”), is designed for new employees working at a financial services company. The Series 7 exam shows that you have the required knowledge of general securities, including the different types of securities, regulations that you must follow, and how to recommend securities to investors.

Many companies require their employees to get their Series 7 license or another professional license when acting as an advisor for their clients. Without this license, you will be very limited in what you can offer to clients, so passing the exam and becoming licensed is an important career milestone for many in the industry.



What Does the Series 7 License Allow You to Do?

FINRA recognizes four main functions that someone working under a Series 7 license could be required to perform.

  • Find new business from customers and potential new customers
  • Determine a customer’s financial profile and investment goals
  • Provide investment recommendations and information that are suitable to the client’s needs
  • Complete purchase and sales transactions, keeping required documentation throughout the process

Financial advisors must follow numerous federal regulations when carrying out their job duties. These regulations govern everything from how to communicate with potential customers to what paperwork you are required to provide with your investment recommendations. The Series 7 exam tests your knowledge of these regulations to make sure that you understand and will be able to follow them.

Tip:

Check out the FINRA Series 7 Exam Content Outline. This outline describes each aspect of the exam and includes a full list of regulations that may be on the test.

The different types of securities tested on the Series 7 exam include:

  • Corporate Securities
  • Municipal Fund Securities
  • Options
  • Direct Participation Programs
  • Investment Company Products
  • Variable Contracts
  • Real-Estate Investment Trusts (REITs)
  • Mutual Funds
  • Money Market Funds
  • Venture Capital
  • Hedge Funds

You should understand what each of these products are, how they differ from each other, as well as how they relate to an overall investment plan that you may recommend for clients.

While the exam is not focused on taxes, you will also need to understand how tax-advantaged accounts, like 529 Plans or certain types of Individual Retirement Accounts (IRAs), work to pass.

Recommended Course

For Series 7 exam prep, study guides and practice materials, StateRequirement recommends:

Being able to provide securities as part of a financial plan for clients is beneficial and is almost always required by employers in the financial space. The Series 7 is the most sought after license because it allows you to work with the greatest variety of securities.

Some financial advisors and insurance agents choose to get their Series 6 license first. Depending on your role, this may be all you need. With a Series 6 license, you are able to sell mutual funds, variable annuities, variable life insurance, unit investment trusts, and municipal fund securities.

The Series 6 exam is shorter and simpler, but does not provide as many options for marketing and selling securities for those holding a Series 7. For this reason, many consider the Series 7 as the ultimate in securities licenses.

Depending on your role, you may also need to get your Series 63, Series 65, Series 66, or state insurance license to complete your requirements.



Does the Series 7 License Expire?

Once you pass the Series 7 exam and have your license, it is good for two years. Within 120 days of your two year licensing anniversary, you must take a computer-based training course to upkeep your license. After your two year anniversary, you will need to complete continuing education (CE) every three years to keep your license current.

Continuing education is required for anyone working with securities once they have a license and register with FINRA and passed their exam, not just for those who have a Series 7 license.

Aside from your securities continuing education, you will also need to keep up with any state insurance license CE as well. Many products that you market and sell require you to carry more than one different type of license.



Series 7 Requirements

Before taking the Series 7 exam, you will need to take and pass the Security Industry Essentials Exam. This prerequisite test covers the basics of the securities industry.  The SIE does not allow you to work with securities on its own, so you will need to take a follow up exam, such as the Series 7 or Series 6.

Fortunately, the same test preparation strategies that you master to pass the SIE exam will help you as you study for the Series 7 FINRA test.

To register for the exam, you will need to be affiliated with a company, firm, or self-regulatory organization (SRO) that is a member of FINRA. This company will act as your “sponsor” to register for the exam.

This means that those taking the Series 7 exam are already employed in the financial services industry, but need the Series 7 license to be able to fully work in their position. Getting a Series 7 license can be a good path for those interested in seeking out new job opportunities within their company.



How Hard Is the Series 7 Exam?

The Series 7 is the most comprehensive of the licensing exams for financial advisors and those marketing and trading securities. The test includes 125 multiple choice questions and 10 additional unscored questions. You have 3 hours and 45 minutes (3:45) to complete all 135 questions, making it one of the longer and more intense licensing exams that FINRA administers.

Preparation is key to passing the Series 7 exam. If you want the best preparation for the Series 7 exam, look for a Series 7 study course that provides study questions, self-paced or instructor-led modules, and practice tests that cover everything from the FINRA Series 7 content outline.

Recommended Course

For Series 7 exam prep, study guides and practice materials, StateRequirement recommends:

Taking practice tests is another great way to gauge your preparation. Following some helpful test taking strategies will ensure that you are ready to take and pass the Series 7 exam.

If you want more in-depth study materials and feedback, an in-person or online Series 7 preparation course can connect you with industry experts and other students studying for the  exam. You can also work with others at your firm who are preparing for the test to study. Take advantage of lunch breaks by quizzing each other on exam topics, set up a mock exam using practice tests, and keep each other accountable for study plans.

Tip:

Take a Series 7 practice exam to see if you are ready for the test. Practice exams are one of the best ways to understand what you will be facing and whether or not you are prepared.



Getting Your Series 7 License

Once you are ready to take the next step in your career as a financial advisor or insurance agent, the Series 7 license is a great next step! Prepare for the Series 7 exam by using a test prep course, studying with colleagues at work, and getting to know the financial services industry. Good luck on your exam!




Information on this page has been gathered by a multitude of sources and was most recently updated on June 2020.

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