If you’re interested in a career as a security industry professional, chances are you’ve at least considered taking the introductory level exam. This $60 introductory exam is designed to assess a candidate’s knowledge of essential security industry information such as products and risk assessments, the structure of the security industry’s markets, prohibited practices, and the various regulatory agencies that govern the industry. As a prospective security industry professional, this is what you need to know about your exams.
Security industry exams require plenty of studying and preparation for success. Luckily, you have plenty of resources at your disposal to ensure that you have the best shot at passing your exam. For instance, the Financial Industry Regulatory Authority, the guiding body of the industry, has an exam breakdown on their site that details which portions of the exam are dedicated to which topics. This breakdown is a great way to know what exactly you need to study so you aren’t spending a whole day chugging office coffee to stay awake while reviewing some of the duller topics.
Most of the exam is focused on products and their associated risk levels. Another large portion is dedicated to understanding the ins and outs of trading, industry-prohibited activities, and customer accounts. The rest of the exam is divided between capital market knowledge and overviews of regulatory frameworks.
One of the best ways to prepare for the introductory exam is by taking a Securities Industry Essentials (SIE) Exam Prep course. These prep courses often review common test questions, previous successful test results, and best practices for exam days. Most courses are incredibly affordable, which make them a great study tool to help prepare for your exam without draining your wallet.
Simply passing your exam isn’t quite enough to succeed in the securities industry. Depending on the type of business you intend to engage in, you’ll also need to pass the appropriate qualification exam. While this might sound as simple as registering for the exam and taking it, the overall process is a little more complex. Before you’re able to take the correct qualification exam, you need to be associated with a Financial Industry Regulatory Authority member firm.
The member firm will sponsor you to take an exam, such as the Series 7 General Securities Representative exam, which assesses entry-level competencies. Upon passing that exam, you’ll also need to file a Uniform Application for Securities Industry Registration or Transfer (U4), submit to fingerprinting, and be approved by FINRA. It’s best to review the authority’s eligibility requirements before proceeding with your exams.
Several of the SIE exam requirements are fairly standard. For one, you must be at least 18 years old. Unlike further qualification exams, you don’t need to be registered with a member firm or broker-dealer to take the SIE exam. However, if you are affiliated with a member firm or broker-dealer and have adequately prepared, you’re allowed to take both your SIE exam and qualification exam on the same day. Even if you fail your SIE but pass your qualification exam, the passing exam score will stick, meaning you’ll only need to retake your SIE. Remember that qualification exams have their own costs and scoring standards. On a 0-to-100 scale, you need a score of 70 or higher to pass your SIE.
An essential component
If you’re looking to delve into the securities industry, it’s essential that you take your SIE exam as well as any applicable qualification exams for your chosen niche. Even if you’re in college and looking to get a head start on your career, the SIE is valid for four years after your exam date. Then, upon graduation, you’ll only need to pass a Series 7 or similar exam to begin work in your field. It’s never too early to get a head start on your career in securities so start studying today.