Series 63 vs. Series 7 Exam: Differences, Pros/Cons, & What to Know

If you're aiming for a career in investment banking, passing both the Series 7 and Series 63 exams is essential. These exams are mandated by the Financial Industry Regulatory Authority (FINRA) and are designed to ensure that aspiring investment bankers have a thorough understanding of the securities industry and its regulations.

In this guide, we'll walk you through everything you need to know to prepare for and pass both the Series 7 and Series 63 exams on your first attempt.

Watch: How to Break Into Investment Banking

What You Need to Know About the Series 7 Exam

The Series 7 exam, officially known as the General Securities Representative Qualification Examination, is a comprehensive licensing exam administered by FINRA. It assesses your knowledge of the securities industry and your ability to sell securities, including corporate securities, municipal securities, investment company products, and variable annuities. The exam also tests your understanding of investment strategies, customer accounts, and the regulations established under the Securities Exchange Act.

Exam Format and Passing Criteria

• Duration: 3 hours and 45 minutes
• Format: 125 multiple-choice questions
• Passing Score: 72%

The Series 7 exam is designed to be challenging, covering a broad range of topics from mutual funds to variable annuities. Adequate preparation is essential, especially if you are aiming to become a registered representative or work within the financial services industry.

What Is the Series 63 Exam and Why Is It Important?

The Series 63 exam, also known as the Uniform Securities Agent State Law Exam, is necessary for professionals who want to conduct business in state-regulated securities. The exam focuses on state securities laws and their application, including concepts from the Uniform Securities Act. Passing the Series 63 allows you to legally offer investment advice and sell securities within individual states.

Key Details:

• Duration: 75 minutes
• Format: 60 multiple-choice questions
• Passing Score: 72%

Passing the Series 63 exam is critical for registered representatives working with broker-dealers or financial advisors. It ensures compliance with state regulations and protects investors from fraudulent practices.

Series 63 vs. Series 7: What’s the Difference?

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Note: The Series 7 exam requires passing the SIE exam as a corequisite. The Series 63 exam does not have any prerequisites.

Test Day Prep Tips for the Series 7 and Series 63 Exams

Arrive at the testing center early with a government-issued ID. Both exams are computer-based, and you’ll have access to scratch paper and a calculator. Make sure to manage your time efficiently during the exams.

What to Bring:

• Valid ID
• Calculator (if allowed)
• Water and snacks (for breaks)

Common Mistakes to Avoid:

• Cramming - Spread your study sessions over weeks or months.
• Ignoring Ethics - Both exams place significant weight on ethical behavior and compliance.
• Skipping Practice Exams - These simulate the real exam environment, helping you build confidence.

How to Pass the Series 7 and Series 63 Exams on Your First Attempt

Passing the Series 7 and Series 63 exams on your first try requires targeted preparation, strong study resources, and effective test-taking strategies. Here's how to do it right.

Understand Exam Scoring and Retake Policies

For the Series 7 exam, you need a score of at least 72% to pass. If you fail, you must wait 30 days before your next attempt. Failing three times results in a mandatory 180-day waiting period. For the Series 63 exam, the passing score is also 72%, with the same retake rules. Planning your preparation schedule around these potential delays is crucial to avoid career setbacks.

Learn Through Scenario-Based Questions

Both exams increasingly use scenario-based questions to test your practical understanding of complex concepts. The Series 7 exam particularly emphasizes situational questions involving customer accounts, investment recommendations, and securities transactions. Familiarize yourself with this question style by practicing with real-world examples and learning how to apply knowledge rather than just recalling facts.

Stay Updated on FINRA and SEC Regulations

Keeping up with recent changes to FINRA and SEC regulations is essential for both exams. The Series 7 exam regularly incorporates updates related to the Securities Exchange Act, anti-money laundering regulations, and ethical practices. The Series 63 exam tests your knowledge of the Uniform Securities Act and state-specific securities laws, which can evolve. Checking official FINRA updates ensures you are studying the most relevant and current material.

Take Timed Practice Exams Regularly

Taking timed practice exams not only helps with content retention but also builds stamina for the long Series 7 exam. Regularly simulating the 3-hour and 45-minute Series 7 exam and the 75-minute Series 63 exam helps you improve pacing, minimize anxiety, and enhance focus during the actual test.

Understand Licensing Requirements and Career Impact

The Series 7 exam qualifies you to work as a general securities representative, allowing you to sell corporate or municipal securities, investment company products, and variable contracts. The Series 63 exam allows you to conduct business across state lines and provide investment advice legally. Knowing exactly what each license enables you to do will help you tailor your study approach to meet your career aspirations.

Develop a Test-Taking Strategy

For the Series 7 exam, prioritize topics like mutual funds, government securities, and investment strategies, which frequently appear on the test. For the Series 63 exam, focus on concepts related to state law compliance, registration requirements, and ethical practices. Always read questions carefully and eliminate clearly incorrect answers to improve your odds of selecting the right choice.

Recommended Study Materials to Prepare for the Series 7 and Series 63 Exams

• Official FINRA Materials - The Financial Industry Regulatory Authority (FINRA) provides comprehensive resources, including exam content outlines, study guides, and practice questions to help candidates understand the structure and topics of each exam.
• Securities Training Corporation (STC) - Offers structured study programs for both exams, including video lectures, printed materials, and online practice exams to reinforce your knowledge.
• Investopedia’s Financial Education Platform - Provides online courses and guides that cover essential topics for the Series 7 and Series 63 exams, along with helpful tips and strategies for mastering difficult concepts.
• Kaplan Financial Education - Known for its in-depth Series 7 and Series 63 study materials, including textbooks, online courses, and practice exams designed to closely mimic the actual exam format.

The Role of Ethics in the Series 7 and Series 63 Exams

The Series 7 and Series 63 exams are related to obtaining securities licenses and meeting securities industry essentials. Ethical practices are foundational to the securities industry, where professionals are expected to uphold integrity, transparency, and fairness when advising clients or making investment recommendations.

The Series 7 exam assesses your ability to handle complex financial products and navigate situations involving corporate securities, municipal securities, and investment company products while adhering to ethical standards. You must demonstrate your knowledge of regulatory frameworks, such as the Securities Exchange Act, and prove you can apply ethical principles effectively.

The Series 63 exam focuses heavily on state securities laws, ensuring you understand how to conduct business legally and ethically across various jurisdictions. It tests your ability to comply with the Uniform Securities Act, make suitable recommendations, and avoid unethical practices like misrepresentation, unauthorized trading, or failure to disclose conflicts of interest.

Passing both exams is essential for obtaining your securities licenses and ensuring you meet the securities industry essentials required by FINRA and state regulators. Mastering ethical practices is crucial not only for passing these exams but also for building a successful career in the financial services industry, where credibility and integrity are paramount.

Unlocking Opportunities in Investment Banking with the Help of Experts

Top investment banking coaches can hugely boost your chances of passing the Series 7 and Series 63 exams on your first try. Their expertise in securities industry essentials and exam-specific strategies helps you master key topics like corporate securities, municipal securities, and investment company products.

Experienced coaches provide tailored study plans, recommend effective study materials, and offer insights into the securities licenses process. They also ensure you understand ethical standards, compliance protocols, and best practices for managing customer accounts and providing investment advice.

Working with a coach streamlines your preparation, ensures you meet licensing requirements, and enhances your readiness to excel in the financial services industry. With expert guidance, you can pass both exams and unlock lucrative opportunities in investment banking.

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• The Best MBA Programs for Investment Banking
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• How to Prepare for a Career in Investment Banking

FAQs

What are the eligibility requirements for the Series 7 exam?

• To sit for the Series 7 exam, candidates must be sponsored by a FINRA-member firm or a self-regulatory organization (SRO). There are no specific educational prerequisites, but candidates must pass the Securities Industry Essentials (SIE) exam as a corequisite.

How does the Series 63 exam differ from the Series 65 and Series 66 exams?

• The Series 63 exam qualifies individuals as securities agents, focusing on state securities laws and regulations. In contrast, the Series 65 exam is designed for investment adviser representatives and covers topics related to providing investment advice. The Series 66 exam combines elements of both the Series 63 and Series 65 exams, qualifying individuals as both securities agents and investment adviser representatives.

Is sponsorship required for the Series 63 exam?

• Unlike the Series 7 exam, the Series 63 exam does not require sponsorship from a FINRA-member firm. Candidates can register themselves using Form U10.

What is the cost of taking the Series 7 and Series 63 exams?

• As of June 2023, the registration fee for the Series 7 exam is $300, while the Series 63 exam fee is $147.

Are there any continuing education requirements after passing these exams?

• Yes, FINRA requires registered representatives to complete continuing education (CE) to maintain their licenses. This includes a Regulatory Element, which must be completed at specified intervals, and a Firm Element, which is determined by the employing firm.

What is the validity period of the Series 7 and Series 63 licenses?

• Both licenses remain valid as long as the individual is employed with a FINRA-member firm. If the individual leaves the firm, the licenses typically expire after two years if not associated with another member firm during that period.