Series 7 License How Do I Get One Without Sponsorship?

By Jay White

June 7, 2015   •   Fact checked by Dumb Little Man

There was a time when the former National Association of Security Dealers (NASD) allowed individuals to take the Series 7 examination and obtain a license without being formally sponsored by a registered entity. These days, however, the NASD is known as the Financial Industry Regulatory Authority (FINRA), and it absolutely requires sponsorship for the purpose of obtaining a Series 7 license.

The top-line requirement for the Series 7 exam, also known as the General Securities Representative Exam, is that a financial firm duly registered and in good standing with FINRA sponsors the test-taker. In essence, Series 7 candidates must demonstrate that they are qualified to solicit and sell a wide range of instruments such as:

Mutual funds
Mortgage-backed securities
Venture capital
Hedge funds
Exchange traded funds

The majority of firms that sponsor Series 7 candidates are engaged in the business of brokering securities. The sponsorship essentially consists of being hired by the firm as a paid trainee and following the on-the-job training program. Although candidates will certainly learn some of the test material at the training programs of their respective firms, they will have to do a fair amount of studying on their own. Many firms focus their training programs on teaching new hires about internal procedures, sales techniques and networking; the specific materials for the Series 7 exam are often learned online and at home.

The Series 7 exam is taken at licensed testing centers; it consists of 250 multiple choice questions that must be answered within six hours. The questions are formulated to test the applicant’s knowledge of his or her functions as a Series 7 representative, which include:

1 – Getting leads on potential clients for their firms.
2 – Evaluating existing portfolios of clients while assessing their financial situation.
3 – Opening and managing brokerage accounts.
4 – Answer questions from clients about investments.
5 – Verifies orders from clients and follows up with their purchases.

The fourth section of the Series 7 exam is the longest with 70 questions, which assess the candidate’s knowledge of information on securities and other financial products. Test-takers are provided with calculators and scratch paper at the testing center to help them solve calculations in some questions.

Jay White

I started Dumb Little Man many years ago so great authors, writers and bloggers could share their life "hacks" and tips for success with everyone. I hope you find something you like!

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