Series 7 Exam Can Be a Gateway to Many Financial Services Careers

For Rob Isbitts, a 25-year career as a financial advisor and investment manager began with the Series 7 exam.

In 1995, Isbitts, who went on to become founder and chief investment strategist at Sungarden Investment Research in Weston, Florida, had an opportunity to join a brokerage firm and transition from back-office work to being a client-facing advisor.

But first he had to pass the Series 7 exam. Due to the particular circumstance with his potential employer, he had one shot to pass, or he wouldn’t be hired.

“So, I did what I felt I had to do: I gave up a few months of my life to make sure I nailed the exam. My wife was very patient during this time, as she had to get used to my nights going a lot later than hers,” Isbitts says.

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The Series 7 exam is the common moniker for the General Securities Representative Exam, administered by the Financial Industry Regulatory Authority. Candidates must answer 125 multiple-choice questions within 225 minutes. To pass, they must get 72% of the questions correct. In addition, a candidate must be sponsored by a FINRA member firm.

In contrast, the Series 65 license, which allows a candidate to join a registered investment advisory firm, has no sponsorship requirement.

The Series 7 exam is a prerequisite for other securities licenses. But the exam itself has its own prerequisite. As of October 2018, candidates must first pass the Securities Industry Essentials exam. That exam assesses basic knowledge of the securities industry and covers markets, regulation, risk and prohibited actions.

Isbitts aced the Series 7 exam with a score of 93. That milestone launched a career he continues to enjoy.

He says those long nights studying were “all worth it in the end. Twenty-five years later, here I am: investment manager, writer, three-time book author, former mutual fund manager and motivated mentor to young professionals in the business. It’s been quite a first half of my career, and it might never have happened if I failed to score at least a 70 on that Series 7 exam.”

The rigor of the exam trips up many candidates. Some give up after one failed effort, but others go back and try again, adapting their study habits.

“I actually failed the first time by 2 points , so I had the pleasure of taking it twice,” says Alyson Skodack Burkett, a financial advisor at Waddell & Reed in Atlanta. “Eleven years later, I still remember that it was 2 points.”

Burkett redoubled her efforts. She had taken a Series 7 study course through Kaplan, doing the self-study course, along with an instructor-led review class. “When I failed the exam I went and sat through the weeklong course in person for a second time. I read the book multiple times, took practice exams and used flashcards,” she says.

[Read: Financial Advisor Q&A: Fugent.]

Upon passing the Series 7, Burkett opted for a career with a broker-dealer on the recommendation of a mentor. She appreciated the opportunities that came with getting her securities license. “There was about a one-year training with others that were also starting out in the business, taking the exams at the same time and trying to find our place in the securities industry,” she says.

She offers some tips for others hoping to pass their Series 7 exam. ” I would recommend live instructor-led sessions, in-person study groups, Zoom study groups and finding a mentor to help keep you accountable,” she says. “I found it very helpful to create a study schedule and timeline to stay on track. It feels like once you can cross off those difficult chapters and practice exams, you are making progress. Even though it feels like that Series 7 book is giant, you will make it through.”

Several employees at BFG Financial Advisors passed the Series 7 after the preliminary SIE exam — like Monica Pozuc, an investment operations associate at the Timonium, Maryland, firm. She was hired after graduating from college, and it was mandatory for her to pass the Series 7 exam, as well as the Series 66, the Uniform Combined State Law Examination.

Pozuc used a test-prep program from Kaplan, which included books, online courses and a bank of questions that she says were very similar to what appeared on the actual test. “I also was lucky enough to be studying at the same time as a few other co-workers, so we would meet to study in groups periodically,” she says.

[Read: Financial Advisor Q&A: The Foundation for Financial Planning.]

Pozuc’s colleague Andrew Harrell, an associate advisor, also joined BFG out of college. He was seeking a firm that would be a good fit for the career path he wanted to pursue. He also was required to pass the Series 7 exam and used the Kaplan test-prep materials.

He says putting in the hours is key to passing. “Although the Series 7 may be referred to as one of the more complicated series examinations, if you put the time in and study the material you will be successful,” he says. “A passing result will be worth the struggle in the end and can lead to several opportunities for your career path.”

Isbitts, who got within striking distance of a perfect exam score, says even that success garnered some ribbing from a friend who was working at another financial firm.

“He told me that at his place, if you scored more than a 72 on the test, you would be mocked mercilessly for studying too hard,” Isbitts says. “My response to him: Those people had a backup plan that I could not afford. They could have failed once or even twice and kept their jobs. Not me.”

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