The Series 7 (General Securities Representative Qualification Examination) is FINRA's 125-question, 225-minute exam, and the passing score is 72. FINRA's current exam materials don't give a current overall candidate pass rate. Passing it lets you sell stocks, bonds, options, mutual funds and variable annuities to the public. You can only take it with a FINRA member firm sponsoring you, and the firm usually pays the $395 fee.
It's the most widely held securities license in the United States. If you want to be a stockbroker, a financial advisor at a wirehouse or a registered rep at a broker-dealer, this is the exam you'll need.
Scroll horizontally to view all columns.
| Series 7 | |
|---|---|
| Given by | FINRA |
| Format | Computer-based, multiple choice |
| Questions | 125 scored, plus 5 unscored pretest questions (130 on screen) |
| Time | 225 minutes (3 hours 45 minutes) |
| Passing score | 72; scores are equated |
| Pass rate | No current overall rate in FINRA's exam materials |
| Fee | $395, usually paid by the sponsoring firm |
| Prerequisites | The SIE, plus sponsorship by a FINRA member firm |
Who takes it
Most candidates are new hires at broker-dealers, wirehouse advisors, wealth management associates and institutional sales reps. There's no education requirement, but you can't sign up on your own. A FINRA member firm has to sponsor you by filing a Form U4, so most people sit the Series 7 in their first few months at a firm.
You also need to pass the SIE (Securities Industry Essentials), either before the Series 7 or at the same time. The SIE doesn't need a sponsor, so a lot of candidates pass it before they're hired and take the Series 7 once a firm signs on. FreeFellow's free SIE practice questions cover all four SIE sections.
What's on the exam
FINRA splits the Series 7 into four job functions:
Scroll horizontally to view all columns.
| Job function | Weight | What it covers |
|---|---|---|
| Seeking business for the broker-dealer | 7% | Prospecting, communications, account types and the rules for opening accounts |
| Opening accounts and evaluating customers' financial profile and investment objectives | 9% | Suitability, customer financial data, objectives, risk tolerance |
| Providing information about investments, making recommendations, transferring assets and maintaining records | 73% | Equity and debt securities, options, packaged products (mutual funds, ETFs, variable products), direct participation programs, municipal securities, margin accounts |
| Obtaining and verifying purchase and sale instructions | 11% | Order types, settlement, trade execution, reporting |
Nearly three-quarters of the exam is that third function. Within it, options, municipal securities and margin give people the most trouble, because you have to calculate rather than recall.
Options is the most calculation-heavy topic. You'll need maximum gain, maximum loss and breakeven for calls, puts, spreads, straddles and combinations. A memorized table of strategies won't help with a combination you haven't seen, so practice working out payoffs from first principles. Margin questions (Regulation T, long and short margin, maintenance requirements, margin calls) come up often and trip up anyone who hasn't drilled them. Municipal bonds show up both as products and from the regulatory side, and their tax treatment and suitability get tested.
The rest of the products material is more familiar. On the equity side that's common and preferred stock, rights, warrants and ADRs (voting rights, dividends, corporate actions). For corporate, government and municipal bonds and money market instruments, you should be able to calculate current yield and yield to maturity and explain why price and yield move in opposite directions. Packaged products like mutual funds, ETFs, variable annuities, variable life and UITs bring in fee structures, share classes and suitability.
How to study
The hard part is breadth. The exam covers nearly every product a rep can sell, and the 73% function mixes recall with calculation. Options and margin are where people lose points, because a question can pair a strategy you haven't drilled with a number you have to work out. If your firm gives you a Kaplan, STC or Knopman Marks course during onboarding, work through it, and put your own extra time into those two topics.
Most candidates study 80 to 120 hours over 4 to 8 weeks, usually 3 to 4 hours a day for 4 to 6 weeks. Spend the first 2 to 3 weeks learning the material by topic, and try to understand it rather than memorize it. From weeks 3 to 5, switch to practice questions and get through at least 1,000 before exam day. In the final week, take full practice exams and aim for 80%+ as a practice target. Options, margin and municipal securities will take most of your practice time.
You register through your firm's compliance department, which files the Form U4 with FINRA. If you fail, you wait 30 days to retake, and after three failed attempts the wait goes to 180 days.
FreeFellow's Series 7 practice questions are free with an account. Each one has a step-by-step solution, and the readiness score tracks how close you are as you go.