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Mar 25 2011

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How Long Does It Take To Prepare For the Series 7 Certification?


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Today, I was presenting an investment seminar on indexed investing to a group of South East Asian based school teachers. 

Most of them were Americans.

I mentioned that the minimum requirement in the United States, in order to sell investment products, was a Series 7 certification.

Two financial sales representatives were among the attendees.  And they became very defensive when I stated that the Series 7 study period was just three weeks long.

One of them suggested that the exam itself takes 3 weeks to complete, and that I was “confused.”

Pasted from the American Training Centre  you can see that the study time required is minimal.

The suggested “home study” time requirement to prepare for the exam is 6-8 weeks, based on 1-2 hours per day.

Keen students wishing to expedite the process could study for 2-4 hours daily, feasibly being prepared for the exam in 3-4 weeks.

The exam itself consists of 250 multiple choice questions.

The passing grade is 70%.

I’ve pasted the details below from the American Training Centre website.

SERIES 7 LICENSE 

The Series 7 Exam is the NASD (FINRA) license for general securities representative. Our Series 7 training course covers all of the topics that are needed to pass the Series 7 exam.

The Series 7 test covers topics including:  

Topics:  
Equity Securities Prerequisite License: None
Debt Securities Questions on Exam: 250
Options and Derivatives Time to Complete: 360 Minutes
Securities Markets and Regulations Format: Multiple Choice
Retirement Plans Passing Grade: 70%
Investment Companies Availability: Test is given daily (Mon-Sat)
Taxation Where: Prometric or Pearson Test Centers
  Home Study Time: Generally 6-8 weeks (1-2hrs daily)

An additional online search complements the short duration of study time:

  • This suggestion recommends a 5 week completion time to study for the Series 7. …read more 
  • Here’s an online suggestion recommending 3-5 weeks of study time for preparation. …read more 
  • Global Career Schools recommends 6-8 weeks of study time:  1-2 hours daily. …read more 

And that’s it folks.

If you want to become a financial service representative, the minimum requirement in the U.S. is a Series 7 certification.

And from knowing nothing about money, you can complete the course in less than one month (if you’re keen) and then become certified after passing the 250 question multiple choice exam.

Although no prerequisite academic training is required for this certification, those taking the exam are required to be sponsored by a financial services institution.

What do you think? 

Should a mutual fund salesperson be required to take additional courses on market history, asset allocation, and a course detailing how investment costs impact returns?

About the author

andrew hallam

I'm a freelance finance writer, lucky enough to have been nominated as a finalist for two Canadian National Publishing Awards. I'm also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, a book explaining how I became a millionaire on a teacher's salary, while still in my 30s. Working to empower people financially, I'm available to motivate and inspire people on basic retirement planning and index investing. I'm happy to comment on your questions, first, please read the Terms of Use.

Permanent link to this article: http://andrewhallam.com/2011/03/how-long-does-it-take-to-prepare-for-the-series-7-certification/

10 comments

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  1. avatar
    DIY Investor

    They should be required to take the additional courses but they won't be- especially the last one. The cost issue is big. Sometimes I think the industry goes out of its way to make sure the cost issue is swept under the rug so they are able to hire reps who are clueless. Bernstein's table showing typical fund costs is something the industry doesn't want to get around.

    I am very interested in how the requirement of 401ks in the U.S. to disclose all costs to participants works out.

  2. avatar
    Andrew Hallam

    Hey DIY Investor (aka Robert)

    When the costs are disclosed, I wonder if the meaning of those costs will fly over most people's heads. I mean, a 2% annual cost doesn't sound like much, until the investor compounds how damaging a 2% annual fee can be over an investment lifetime.

  3. avatar
    pgreensoup

    The only people who are "confused" are the people that willingly overpay "qualified" people to manage their money. Full disclosure: I was formerly "confused", but was shown they light. Thanks, Andrew.

  4. avatar
    Andrew Hallam

    Hey P Green Soup:

    If everyone knew how minimal the educational standards were for most financial sales reps, we'd all be a bit more skeptical. And considering the industry's conflict of interest (in most cases) it's sad that cognizance of such a thing isn't more widely spread. That said, thanks for thanking me. I'm glad I could help.

  5. avatar
    The Dividend Ninja

    Hey Andrew,

    Good post! The financial industry (specifically the mutual fund sales industry) is a well oiled machine. It's based on a foundation of deception, aggressive sales techniques, and ultimately poor investments for it's clients. Commissions, trailer fees, and incentives – the list goes on!

    People assume that when they see a mutual fund or investment dealer they are sitting across from a financial professional – but nothing could be further from the truth. I'm sure some of these people are well educated and do have their client's interests at heart, but I doubt most do.

    But then again the point of selling investments is sales, right? I wonder what the certification is here in Canada – probably much of the same. If at least one reader sees this post and goes to a fee only planner instead of a commision based mutual fund dealer – then your work is done!

  6. avatar
    Jason Navallo

    I passed the Series 7 examination when I was 18 with only a couple weeks of studying and I scored way above the 80% mark.

  7. avatar
    Andrew Hallam

    Hey Jason,

    Thanks for sharing that.

    Without knowing it, when giving a presentation at a recent conference, I metaphorically stabbed a financial saleswoman where it hurts, when I suggested that a Series 7 exam could be passed after just 3 weeks of studying. I didn't even know she was there, or I may not have said it. I don't want to be hurtful, after all.

    I realized, later, why she was so struck by what I said, and keen to lash out a bit. She brandishes her Series 7 certification to teachers where I work— as if it's a PhD in personal financial management.

    And you passed the Series 7 as an 18 year old after studying for just 2 weeks? Sweet!!

    Thanks again for sharing that!

  8. avatar
    Andrew Hallam

    Hey Ninja,

    I found out later that one of the financial sales reps who attended the session speaks very highly of her status as a Series 7 professional. It's no wonder I ruffled her feathers! Her clients–who probably think her Series 7 certification is equivalent to some kind of degree—certainly wouldn't want to hear how insignificant it is.

  9. avatar
    Tony

    Only thing Series 7 does is make a used car salesman suddenly qualified to sell securities. Those types of tests are pure memorization – no thinking required. Go over the question banks a few times, and then on the test a lot of the questions are the same, just with answers switched around.

    Licensing exams are the lowest bars the industry sets up. They're more for show than anything else.

  10. avatar
    Muhammad Saeed

    I have a bachelors degree in Business and would like to take the Series 7 exam. I have recently relocated to Toronto from Dubai where I used to work as a Financial Application Support Analyst at Thomson Reuters. I have no sponsor to back me. Can you please advise what are the pre-requisites for Series 7.

    Sincerely,

    Muhammad Saeed

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