Maybe you found out you’ll be taking the FINRA Series 7 exam, or maybe you’re just wondering if you’ll need it at some point in your career. What kinds of professionals take the Series 7? What position will you have after you pass the test? Here is a Series 7 background.
Who takes the Series 7 exam?
Introductory-level financial services professionals across a variety of roles typically take the Series 7 test, referred to as the General Securities Representative exam. In such positions, people may be financial advisors, RIAs (Registered Investment Advisors), brokers, or wealth management professionals. They work at brokerages (broker-dealers, wirehouses), insurers, banks, and other investment firms. Sales is the principal component of most introductory positions.
For positions requiring Series 7 passage, the employer usually requires new recruits to pass the test within a certain number of days after starting employment. The employer acts as the sponsor for the new recruit taking the test and sometimes provides instruction or classes for test preparation. Employees must be sponsored by their employers in order to register for the test. The test is administered by FINRA or the Financial Industry Regulatory Authority, which is the self-regulating organization for the financial services industry in the US.
The Series 7 is a general or “core” test, and some positions will also require either the Series 63 (covers state securities regulations, to be able to sell securities), Series 65 (required by most states for investment advisors), or Series 66 (a newer test which somewhat combines Series 63 and 65, with Series 66 passage typically equivalent to passing both).
How many people does the Series 7 cover?
Almost anyone who wants to build a wealth management career must at some point be FINRA certified, and the most common certification is the Series 7. As of 2017, there are approximately 635,367 financial advisers in the US according to FINRA. In terms of economics, the function of financial advisers is to channel capital from owners/savers to businesses and capital users at an appropriate level of risk and reward.
Most financial advisors work for large financial services brands or for independent advisory firms. Investopedia ranks the top financial advisory firms as Vanguard, PIMCO, Capital Group Companies, JP Morgan Asset Management, and Fidelity Investments. InvestmentNews ranks the top financial firms according to investors as LPL Financial; UBS Financial Services; RBC Wealth Management; US Bank; Stifel, Nicolaus & Company; Merrill Lynch Wealth Management; Ameriprise Financial; Raymond James; Charles Schwab & Co.; Wells Fargo Advisors; Edward Jones; and Fidelity Investments.
How to begin a financial advisor career
Though there are many paths to a successful wealth management career, most intro-level financial advisors work from a call center environment. The challenge initially is to bank a certain level of business – often with an incentive structure heavily tilted towards commission. Managers for incoming new recruits are there to help train you and walk you through sales goals and expectations. A great manager can make all the difference – be sure to ask questions about training and management in your interviews.
One alternative is to start in a position that primarily provides financial advice services to a firm’s existing clients. This type of role is rare but becoming slightly more common. There is less personal equity in each client relationship, and compensation is typically lower as well. This track may be preferable for those looking to avoid business development (a.k.a. cold calling).
After some time (usually a year or two), you may advance or change positions in your career. Positions you can take would include focusing on advising existing clients and becoming a certified financial planner (CFP), becoming a supervisor to incoming financial advisors or taking another management position, becoming self-employed or starting a small firm, or shifting to another primarily-sales position.
Whatever route you choose, Wall Street offers great career opportunities for ambitious business-minded professionals. The rest is up to you!