Why you need the SIE on your resume before applying to finance roles

Brandon Rith
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College graduation is an exciting yet stressful time for many. While celebrating accomplishments with family and reminiscing on good times with fellow friends and students, almost every graduate faces employment uncertainty. Where will I work? How many interviews will I have to attend? Will any company hire me? These are common questions for those entering the professional workforce. 

Companies offering entry-level positions receive hundreds, if not thousands of resumes for a handful of open seats. In this highly competitive environment, applicants must find a way to stand out from the crowd. For business and finance graduates seeking employment, passing the Securities Industry Essentials (SIE) exam is the best way to increase your chance of landing a finance job. 

In 2018, the Financial Industry Regulatory Authority (FINRA) introduced the SIE exam as an introductory licensing test for those entering the securities industry. For most positions related to securities (stocks, bonds, mutual funds, etc.), the SIE is one of several exams that candidates must pass to be properly licensed and work for a financial company. 

In addition to being a prerequisite for these roles, the SIE is an excellent introduction to the world of finance. It covers various aspects of the industry, including financial products like stocks, options, and bonds, market dynamics, investor suitability, and securities regulations. It’s a mile wide and an inch deep, not going into too much detail, but touching on a wide variety of topics.

Prior to the introduction of the SIE exam in October 2019, those seeking jobs in the industry were required to be “sponsored” by their employing firm. Essentially, this meant the employer was responsible for the employee’s training and licensing.

Now, employers expect candidates to study for and pass the SIE on their own before even applying to a job in finance. The exam does not require employer sponsorship; anyone can take it just by paying the $60 fee. You have 1 hour and 45 minutes to answer 75 multiple-choice questions. With a first-time pass rate of 74%, it’s not the easiest exam, but most students can adequately prepare in 2-4 weeks with the right resources.

There are many jobs in the financial field that require this license. Here’s a list of several employment opportunities that explicitly require the SIE exam to be passed to conduct business:

  • Financial advisor
  • Private wealth associate
  • Client relationship associate
  • Research associate
  • Trading representative
  • Financial services consultant
  • Equity research associate
  • Social media compliance analyst
  • Relationship banker
  • Investment banking analyst

For some of these jobs, the job description might not list the SIE as a prerequisite. Large investment firms sometimes hire highly qualified employees without the license, and some even provide paid study time. While this might seem to downplay the need for the SIE license prior to employment, these benefits are typically only available to those with the strongest profiles.

Passing the SIE exam before being employed significantly increases the chances of being hired, for two primary reasons: 

First, it saves the employer significant time and money. As stated previously, study programs for the SIE tend to last between 2-4 weeks. For large corporations hiring hundreds of employees, not paying employees to study for a month before working amounts to saving hundreds of thousands of dollars. Even if the employer does not offer paid study time, requiring candidates to study on nights and weekends, holding the license dramatically speeds up training. Prior to being licensed, employees are not allowed to discuss, recommend, or perform securities transactions, and are often relegated to informational and clerical duties. Hiring candidates who already hold their SIE license results in employees being trained and ready-to-go several weeks faster than their unlicensed counterparts.

Second, passing the SIE exam demonstrates the candidate has the ability and determination to understand complex concepts and pass difficult financial exams. One of the greatest costs associated with entry-level positions at large brokerage companies (Fidelity, Charles Schwab, Vanguard, etc.) is hiring employees incapable of passing the required financial exams. Despite the hiring process often involving aptitude tests and interview questions relating to taking finance exams, hundreds of employees at financial firms are terminated annually due to their inability to pass required FINRA licensing exams. No matter how impressive a candidate is in an interview, hiring managers can never be sure that the candidate will be successful with their licensing exams. However, a candidate with the SIE license has already demonstrated their test-taking abilities and is seen as a much safer choice.

Combining the savings of time and money with a demonstration of test-taking ability, attaining the SIE license significantly increases any candidate’s chances of being hired. Even if the license isn’t necessary for a job opportunity in finance, employers make positive assumptions about a candidate that has already passed the exam. Students in business and finance programs should seriously consider taking the exam prior to graduation.

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Ready to take the next step?

If you’re in need of test prep for the Securities Industry Essentials (SIE) or Series 7, take a look at our modern, online courses. Every Achievable course includes an easy-to-read online textbook with real-world examples, thousands of review quizzes, and plenty of full-length practice exams. Join the thousands of students we’ve helped pass and advance their careers.

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