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The finance industry is known for being an exciting if challenging career path - and one that can make you a lot of money if you're good at it. In order to engage in securities business, you are first required to pass the FINRA Securities Securities Industry Essentials (SIE) Exam, sometimes incorrectly referred to as the Security Industry Essentials exam.
Applying to financial firms with your SIE credentials in hand shows your potential employers that you already know the profession, and have taken the initiative to learn about and pass this required test. Not only that, but hiring a pre-qualified applicant also saves them the time and money of training someone without the credentials.
If you were hiring and there were two similar candidates - one with the SIE and one without - which would you think is stronger?
Practically every role in finance requires passing the SIE.
- Research Analyst
- Wealth Management Adviser
- Investment Banker
- Investment Adviser
- Equity Trader
- Bond Trader
- Insurance Sales
- Mutual Fund Sales
- Compliance Officers
- Operations Analyst
- Financial Consultant
... just to name a few.
The hiring profile for major financial institutions is changing: as the industry is becoming more people and service oriented, employers are hiring smart and driven folks outside of people who majored in finance in college.
Our corporate clients are actively hiring former service industry personnel, liberal arts majors, and more people outside of the old profile. But their biggest concern is whether you can handle the content - and that means passing the SIE will give you a BIG advantage over other applications by showing your mastery of the material.
The SIE is an entry-level, medium-difficulty exam, meant to be challenging but approachable to anyone - including people that do not have a traditional finance background. Calculated from the first 16,000 individuals to take it, the SIE Exam pass rate came out to be 74%, right in line with FINRA's expectations.
It is expected that experienced students can study for about 25 hours and pass the exam, while those who are just learning the material for the first time should expect to spend 50 hours to be suitably prepared.
The SIE Exam tests three major skills:
You will be expected to use logic and the evidence presented to deduce the correct answer from multiple choices. This isn't too different from what you've already done with the SAT or in school – the difference is the subject matter and remembering which rules or calculations apply.
Finance has math - there's no way around it. Fortunately, the math in the SIE is straightforward and more a matter of how you apply it rather than doing complex calculations. It's the standard PEDMAS: parentheses, exponents, multiplication, division, addition, and subtraction.
Achievable has adaptive, memory-tracked flashcards built into our course to ensure you'll remember all the material you've learned on test day.
The SIE covers the fundamentals that you'll need for any role in finance, regardless of the specific field you might want to specialize in.
The SIE exam is hosted by FINRA and costs $80 to register. Participants have 1 hour 45 minutes to answer 75 multiple-choice questions. The passing score is 70% (53/75).
The basics, laws, and regulations of the financial markets. You'll need to know the primary and secondary markets, the regulators (SEC and FINRA), and their rules (Act of 1933, etc).
The products of the financial markets, which include stocks, bonds, mutual funds, ETFs, and options. You'll need to know what these products are, the risks of investing in them, and how they benefit investors.
How customers buy and sell securities in their accounts. You'll need to know different types of orders and accounts, how those orders are entered into the market, and the regulations that govern these activities.
How financial professionals operate in their jobs and the rules that govern their activities. You'll need to know FINRA and SEC rules, ethics of working with clients, and general procedures for financial professionals.
All things related to common stock, including rights of stockholders, stock markets, benefits & risks, and fundamental analysis. Various equity-related investments like ADRs, rights, warrants, and tender offers are also discussed.
Characteristics, features, benefits, and risks of preferred stock. Interest rates, their influence on the financial markets, and how they impact preferred stock market prices are additionally covered.
The foundations of debt securities, which are the most commonly traded investment in the financial markets. Topics covered include interest rates, bond characteristics, the debt markets, yields, and benefits, and risks.
Why corporations borrow money, how they do it, and different types of debt securities they offer. The bond markets and bank products like banker's acceptances and CDs are also part of this chapter.
The basics of municipal government products and why states, cities, and political subdivisions borrow money. Mainly focusing on general obligation (G.O.) bonds and revenue bonds, you'll learn how your local government finances its activities.
The essentials of securities issued by the U.S. Treasury and federal agencies. The Federal Reserve, its monetary policy, and how it influences the economy is also examined.
What an investment company is, how they operate, and the rules and regulations of the Investment Company Act of 1940. Mutual funds, closed-end funds, exchange traded funds (ETFs), and unit investment trust (UITs) are specifically discussed in detail.
Products that work similarly to investment companies, but fall outside their definition. Primarily focusing on real estate investment trusts (REITs), hedge funds, and direct participation programs.
The fundamental elements of options, which lock in future transaction prices. Single leg strategies, hedging strategies, income strategies, the option markets, stock options, and index options are explored.
The basics of how investment returns are taxed. Taxation on dividends, interest, and capital gains are examined.
Focusing on the characteristics and regulations of the primary market. The rules of the Securities Act of 1933 are covered in detail, which include IPO rules, exemptions, and the registration process.
The essentials of the secondary market, which is governed by the Securities Exchange Act of 1934. Specific stock markets, participants in the financial markets, order types, and applicable regulations are all covered.
How brokerage accounts work, the process of opening one, and the different types of accounts available. Cash accounts, margin accounts, fiduciary accounts, and rules relating to firms offering brokerage accounts are covered in detail.
The structures of qualified and non-qualified retirement plans. Additionally, education plans (Coverdell ESPs and 529s) and ABLE accounts are covered. Contribution limits, penalties, risks, and benefits of using retirement and education plans are further discussed.
The do's and don'ts of finance, specifically relating to registered representatives. Prohibited activities, market manipulation, and ethical duties are examined. You'll also learn more laws and regulations relating to business practices in finance.
SIE resources
