Reasons You Have To Have A Series 7 License

What It Is:

Series 7 is really a license that is needed before an individual can sell securities. Those who pass the exam for any Series 7 license qualify to become a registered representative of broker-dealers in the usa.

 

How It Works/Example:

 

To acquire a Series 7 license, you must pass the Sequence 7 exam (also called the General Securities Representative Examination). This particular test primarily covers the actual seven critical functions performed by registered representatives: seeking business for the broker/dealer, evaluating customer requirements and goals, advising customers, managing customer accounts and account information, explaining the securities marketplaces and the factors that affect them, executing orders for clients, and monitoring client portfolios. The Financial Industry Regulatory Authority(FINRA) administers the test.

 

The actual Series Seven examination is six hours long and contains 250 multiple-choice questions. The actual candidate must answer a minimum of 70% of the Two hundred and fifty questions correctly to pass.

 

In general, an individual cannot legally advise clients, get transactions, or execute dealings for customers until she or he has passed the actual Series Seven exam, obtained the corresponding license.

 

Although a Series 7 license permits the holder to market a broad number of securities, it does not allow the holder to sell goods or futures (this requires a set 3 license).

 

Why This Matters:

 

The actual Series Seven exam is a vital step in ensuring that brokers understand and have perfected a body of data about markets, investment devices, securities legislation, and moral behavior. As a result, the presence of the Series 7 requirement advantages investors by requiring some level of the uniform understanding base among brokers.