SIE and the Series 7: The financial services dynamic duo

The SIE and the Series 7 are both exams and certifications foundational to a career in the financial services industry. The SIE is the first in the sequence, giving new entrants to the field a chance to demonstrate their skills even before landing their first official role. The Series 7, a common step taken after obtaining the SIE and securing employment with a Financial Industry Regulatory Authority (FINRA) member firm, requires holders to perform the duties of a general securities sales representative. Together, they form the bedrock of careers in financial advising, investment banking, compliance, and more.

What sets the Series 7 apart from other certifications is that it’s considered the “gold standard” for securities representatives, thanks to its broad scope and permitted activities. For those just starting the certification process or interested in learning more, know that reaching the securities representative level requires some legwork, but it can be well worth it.

The financial advisor career path

Financial advisors, investment representatives, and wealth managers help a variety of clients, from high-net-worth individuals to family members saving up for their child’s school, make financial decisions that best suit their preferences and goals. Through licensing, they are legally permitted to sell various investment products, make recommendations, and help clients manage their portfolios and expenses. FINRA, the regulatory authority responsible for certifying financial professionals and maintaining industry standards, administers these related exams and licenses.

A common pathway into the field is first taking the SIE, securing employment at a FINRA-member brokerage, bank, or other firm, then gaining sponsorship to take a “Top-Off” exam. Representative-level Top-Offs, such as the Series 7, are required to act on behalf of clients and certify fiduciary responsibility for customer finances. A college degree or higher is usually required for advisory or similar positions, and while you can major in virtually anything and enter financial advising, at least some coursework in finance, accounting, and economics will be a huge asset.

Most financial advisors also pair the Series 7 with a Series 63, 65, or 66, known as the “blue sky” certifications. These tests focus on state regulations, ethical practices, and fraud prevention, and are required to carry out many of the duties of registered representatives in a given state. From entry-level roles, advisors or similar professionals can move up to associate positions and eventually into managerial and leadership roles, though those promotions often require additional, principal-level licenses.

Of course, not every path is linear, especially in an industry as dynamic and ever-changing as finance. Many individuals enter the field from a completely different educational background or after years of working in a different area. Taking the SIE is an excellent way to break into the industry, as it serves as an objective measure of your competence in investment structures, finance basics, and regulatory issues.

What is the SIE?

The SIE, or Securities Industry Essentials exam, is a 75-question entry-level assessment completed in 1 hour and 45 minutes and is required for many early-career finance positions. Many use the SIE as a “resume booster” when they’re just starting off in the field to help them stand out among other job applicants, and as a jumping-off point for additional credentials. Successfully passing the SIE demonstrates that a candidate possesses knowledge in:

• The basics of investment products
• Key financial regulations and compliance standards
• Processes involved in trading and selling securities
• Rules, responsibilities, and ethical standards

The SIE exam is a critical first step for anyone considering a career in the securities industry, both because many entry-level jobs require or prefer it and because passing it gives you a head start on certification processes down the line. The SIE is open to anyone over 18, regardless of employment or educational background, and a score of 70% is required to pass.

What is the Series 7?

The Series 7, officially named the General Securities Representative Qualification Examination (GS), is another core requirement for advisory and investment roles. The Series 7 assesses the knowledge and competency needed by entry-level registered representatives in securities sales and financial advising. When comparing the SIE vs. the Series 7, it’s important to note that while both exams cover foundational concepts like customer accounts, investment transactions, suitability, and key market participants, the Series 7 exam takes a much deeper dive into these topics. The Series 7 is also nearly twice as long as the SIE, consisting of 135 questions that must be completed within 3 hours and 45 minutes.

A broad range of investment vehicles is featured on the Series 7 exam, including:

• Equity securities (such as common and preferred stock)
• Exchange-traded funds (ETFs)
• Exchange-traded notes (ETNs)
• Debt securities (like bonds)
• Options
• Investment companies (for example: mutual funds)
• Direct participation programs (DPPs)
• Hedge funds

It’s very common for Series 7 exam questions to present investment scenarios: “A customer has x, y, and z preferences regarding investments. What recommendation would you offer given these factors?” Making appropriate and suitable investment recommendations is at the core of holding a Series 7 license and practicing as a registered securities representative.

Series 7 requirements

Unlike the SIE, there are certain prerequisites you must meet before taking the Series 7:

1. First and foremost, successfully passing the SIE
2. Employment at a FINRA-member firm
3. Sponsorship by your firm (they must fill out a Form U4 on your behalf)

Many candidates will be hired by a firm before completing their Series 7, though passing the exam is required for continued employment in such cases.

SIE vs. Series 7: Is the Series 7 harder than the SIE?

Yes, the Series 7 is notably more challenging than the SIE, offering a deeper and more comprehensive exploration of many of the same subjects. The Series 7 exam requires mastery of additional details and advanced concepts. Historically, candidates see a higher pass rate for the SIE (estimated above 74%) while the Series 7 pass rate may be as low as 65%. Despite this increased difficulty, studying for the SIE lays a solid foundation for success on the Series 7, as much of the material builds on what’s already learned. By completing your first FINRA exam, such as the SIE, you gain valuable insight into the structure and expectations for the Series 7 and future licensing exams. This progression helps reinforce your understanding and readiness moving forward.

Difference between the Series 6 vs. Series 7 and other Top-Off certifications

The Series 7 exam is one of several licensing exams that a registered representative can take to demonstrate expertise in the financial services industry. While the Series 7 is known for its broad coverage of investment products and securities, other licensing exams assess knowledge in more specialized areas. The Series 6, for example, officially called the Investment Company and Variable Contracts Products Representative exam, evaluates competency in a narrower range of investment vehicles.

Here’s an overview of additional representative-level exams, illustrating how each focuses on specific aspects of securities activities:

• Series 22 (Direct Participation Programs Representative): Specializes in the sale and marketing of direct participation programs (DPPs) with a narrower scope than the Series 7.
• Series 57 (Securities Trader): Authorizes equity traders who deal primarily with transactions in equity, preferred stock, or convertible debt securities.
• Series 79 (Investment Banking Representative): Qualifies professionals who advise and facilitate debt and equity offerings through activities such as private placements, public offerings, mergers, and acquisitions.
• Series 82 (Private Securities Offerings Representative): Focuses on the solicitation and sale of private placement securities products as part of a primary offering.
• Series 86 and 87 (Research Analyst Exams): Required for registered representatives who prepare or offer research reports relating to securities products.
• Series 99 (Operations Professional): Certifies operations professionals responsible for client onboarding, financial control functions, and handling receipt, delivery, and transfer of funds, securities, and account assets.

Among these representative-level exams, the Series 7 is the most comprehensive and versatile. This breadth is why taking the Series 7 exam is especially popular among emerging financial professionals seeking to maximize their career opportunities in the securities industry.

Is the Series 7 only for financial advisors?

The Series 7 can open doors to many jobs, such as becoming a stockbroker, financial or paraplanner, investment banking associate, trader, or compliance officer. You can also pursue an advisory role specializing in certain kinds of products, including retirement accounts, trusts, private equity funds, and more, so you’re not tied to just giving general financial advice.

Do I need an MBA to go into finance?

Not necessarily. Master’s in business administration (MBA) programs focus much more on broader topics around management and entrepreneurship. While this can be immensely useful as an SIE/Series 7 holder, there’s still a lot of finance-specific terminology and information you’ll need to learn to pursue a traditional finance role in banking or securities sales. This can be done through intentional coursework, internship opportunities, networking, and joining investment-related clubs.

Other options for graduate school can include a master’s in finance or a degree or certificate in a quantitative field, which can help you gain the skills needed for finance-related careers. Still, many advisory roles are accessible to college graduates, especially those with the SIE and demonstrated interest and knowledge in finance.

What comes after?

Once you get your Series 7, you’re not quite done in terms of preparing to practice as a registered rep. To do so legally in your state, you’ll need to pass either the Series 63, 65, or 66 exam administered by the North American Securities Administrators Association (NASAA) in conjunction with FINRA:

• Series 63: Uniform Securities Agent State Law Exam
• Series 65: Uniform Investment Adviser Law Exam
• Series 66: Uniform Combined State Law Examination

These exams focus on laws, regulations, and ethics for various agent and advisory roles. The 66 is the broadest of the two, covering a combination of topics tested on the 63 and 65, so the SIE + Series 7 + Series 66 is a popular pairing. Of course, the combination that suits you best will depend on whether you want to practice as a registered securities agent, an investment adviser representative, or both.

Before entering the process, ask yourself if you’re more interested in selling products, providing investment advice, or offering a combination of services. Also consider your future client base: are you interested in working with high-net-worth individuals? Everyday consumers? Commercial clients? This may affect the route you take.

You’ll likely need to begin at a FINRA-sponsored firm, but eventually, you may be able to take your services to private practice.

So, how do I get started?

Signing up for the SIE is quick and straightforward. Just go to FINRA’s “Enroll for an Exam” page, choose “SIE,” create an account, complete the required form, and you’re all set to schedule your SIE exam.

Wrapping up

The SIE and Series 7 go hand in hand for a clear reason: together, they form the launching pad for anyone pursuing a career in financial services. Successfully passing both the SIE and Series 7 can dramatically enhance the opportunities available to aspiring financial professionals. The process usually begins with the SIE exam, which is open to nearly anyone interested in finance and serves as a valuable credential to boost your employment prospects.

After you complete the SIE and secure a position with a firm that can sponsor you, you’ll be eligible to begin preparing for the Series 7 exam, an important next step for those aiming to move forward professionally. While building a successful path in finance takes patience and dedication, the rewards are well worth the effort for motivated individuals. Make sure to thoroughly research job roles that interest you, explore various certification pathways in the industry, and always seek top-quality preparation resources as you navigate the SIE and Series 7 journey. Investing in yourself and your performance on certification exams can make all the difference for your career trajectory.