Are you looking to advance your career in the securities industry? You should know that recently some of FINRA’s important exams have gone through changes. In October 2018, FINRA introduced a new prerequisite exam. This new exam is the Securities Industry Essentials (SIE) Examination. Although the SIE Exam doesn’t replace FINRA’s Series 6 and Series 7 Exams, it has led to some changes to these legacy exams.
Why was the SIE exam introduced?
The Securities Industry Essential (SIE) exam was introduced to eliminate duplicate general knowledge questions that were found in both the Series 6 and Series 7 Exams. To achieve this, FINRA created the SIE Exam and revised the content of the Series 6 and Series 7 exams. The general knowledge content was moved to the SIE Exam, and the content of the Series 6 and Series 7 Exams was adjusted to be more focused on product knowledge and suitability. As a new entrant to the securities industry, you must pass the 75-question SIE Exam and then pass a Top-Off exam, such as the Series 6 or Series 7 Exam. If you’re only considering the possibility of a career in the financial industry, the SIE Exam is the starting point. To sit for the exam, you must be 18 years old, but you don’t need to be sponsored by a U.S. broker-dealer.
Exam changes and what they mean for the tester
As a result of the introduction of the SIE Exam, both the Series 6 and Series 7 Exams have been shortened. Before October 2018, the Series 6 consisted of 100 questions and the Series 7 consisted of 250 questions. However, today, the Series 6 is 50 questions and Series 7 is 125 questions.
On the Series 6 Top-Off, you’ll face questions that determine how well you can fulfill the responsibilities of a representative of variable contracts products and investment companies. The exam will include questions regarding mutual funds and variable annuities.
On the Series 7 Top-Off, you’ll experience questions related to suitability. You’ll be tested on the knowledge, skills, and abilities necessary for acting as a General Securities Registered Representative. Product-based questions will focus on sales of corporate securities, investment company securities, direct participation programs, municipal securities, options, and government securities.
On the SIE Exam, questions address the basics of securities products and their risks, terminology of trading, customer accounts and prohibited activities, capital markets, and regulatory frameworks. In more detail, you may find questions about the relationship between the yield and price of a bond, the rights of stockholders, reporting requirements for Suspicious Activity Reports, and filing requirements for the Uniform Application for Securities Industry Registration or Transfer (Form U4).
Now that you have a breakdown of what you’ll find on these exams, it’s time to prepare. Let’s discuss some of the steps you can take to pass the exams and move on in your career.
How to pass the SIE Exam and either the Series 6 or 7 Exam as a securities industry professional
As expected, studying is essential if you want to pass the exams. Securities Training Corporation has the study materials you need to successfully conquer testing day, so don’t hesitate to use them. As you use the materials, learn the content until you feel confident, but don’t wear yourself out. It’s important to avoid both under- and over-studying.
Practice tests are not only helpful; they’re essential to passing the exam, so take full advantage of them. The multiple practice tests available can help you understand the structure of the exams, get an idea of the questions you may face, and even reduce your anxiety level on testing day.
When you take the practice tests, the goal should be to ultimately score 85% or higher. This level is unlikely on your first attempts at the practice exams, so be patient and continue to focus on your studies. Although the minimum required passing score is 70%, consistently scoring 85% or higher on practice tests can give you some room to relax on testing day.
The length of time it takes to study and build confidence in the material can vary. Based on a person’s experience, it may take a week, a month, or even several months. Just jump in and don’t be afraid if it takes longer for you to understand the material than it does for others. As long as you ultimately know the information and pass the test, you’ve earned the same opportunities in the securities industry as any other person who passes the exam.
To learn more about the SIE, Series 6, and Series 7 Exams and to get insight into how to study for and pass them, contact Securities Training Corporation. STC’s experts are excited to give you the advice you need to achieve the success you deserve.
