What is the Series 54 exam?
The Series 54, also called the Municipal Advisor Principal Qualification Exam, is a Municipal Securities Rulemaking Board (MSRB) exam. The MSRB is a self-regulatory organization that establishes rules for municipal securities dealers and municipal advisors. As of November 30, 2021, all municipal advisor professionals working in the capacity of a municipal advisor principal must pass the Series 54 to be appropriately qualified.
Passing the Series 54 exam qualifies you to manage, direct, and supervise municipal advisory activities. These activities include advising a municipality regarding issuing municipal securities, such as the structure, timing, or terms of an issue. Soliciting municipal securities business from municipalities on behalf of a third party is also a form of municipal advising.
Are there other exams I need to take to become a municipal advisor principal?
Yes. To become properly qualified as a municipal advisor principal, you must also pass the Series 50, Municipal Advisor Representative Qualification Exam.
About the Exam
The Series 54 exam consists of 100 scored and ten unscored multiple-choice questions. You have three hours to complete the exam, and you must score a 70% or higher to pass.
Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69% – not a passing score for the Series 54 exam).
Topics Covered on the Exam
The Series 54 exam is designed to make sure that municipal advisor principals are competent in the supervisory application of rules and regulations. This means that the exam measures your ability to apply regulatory requirements to the municipal advisor’s activities, rather than just a general knowledge of what those regulations are.
The Series 54 exam covers the three main topic areas of the MSRB Series 54 Content Outline:
The MSRB updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the MSRB Series 54 Content Outline and use it in conjunction with the Solomon Series 54 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.
Question Types on the Exam
The Series 54 exam consists of multiple-choice questions, each with four options. You may see the following four question structures. However, keep in mind that these sample questions don’t necessarily represent the difficulty level or subjects covered in the exam.
Closed Stem Format:
This item type asks a question and gives four possible answers to choose from.
Which of the following would be most likely to require registration as a municipal advisor?
- Providing a municipality with a price quote for an investment product within the municipality’s investment criteria
- Offering the municipality a possible price range for a new issue
- Displaying a comparison of debt financing structures
- Providing advice on issuing securities to the municipality through its municipal advisor
Open Stem Format:
This kind of question has an incomplete sentence followed by four possible conclusions.
When dealing with municipal entity clients, the two primary duties that a non-solicitor municipal advisor must fulfill with reference to standards of conduct are:
- The duties of care and loyalty
- The duties of care and suitability
- The duties of loyalty and prudence
- The duties of fairness and consistency
“Except” (or “Not”) Format:
This type requires an answer that is incorrect or is an exception among the four answer choices.
Documentation that defines a municipal advisory relationship with a client must include all of the following except:
- A description of the advisor’s compensation arrangement
- Educational background information about the municipal advisor’s associates
- The termination date of the relationship between the advisor and the client
- A description of all activities to be performed for the client
Complex Multiple-Choice (“Roman Numeral”) Format:
For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.
Which two of the following actions are required for a municipal advisor to comply with MSRB rules on supervision?
- Designation of a single chief compliance officer
- Annual certification of supervisory policies
- Providing clients with an annual update of supervisory practices
- Designation of a principal at each of the firm’s offices to oversee the system
- I and II
- I and IV
- II and III
- III and IV
Answers: 1. D 2. A 3. B 4. A
Try a free sample of Solomon Exam Prep’s Series 54 Exam Simulator. You’ll receive instant feedback on each question with a robust explanation of the correct answer.
Taking the Series 54 Exam
The Financial Industry Regulatory Authority (FINRA) administers the Series 54 exam, and you must take it at a Prometric test center. Like all qualifying exams in the securities industry, the Series 54 is closed-book, and you’re not allowed to bring anything into the exam. The test center will provide you with any materials you need to complete the exam. For instance, the test center may provide a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment.
Before the exam starts, you’ll take a 30-minute tutorial on exam administration. After you finish the tutorial, the exam will begin and you’ll have three hours to complete it.
When taking the exam, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and “flag” it. There’s no penalty for guessing, so it’s beneficial to answer every question.
After you’ve finished all the questions, you can come back to any flagged questions. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it’s not a good idea to simply skip all of the difficult questions with the plan to answer them later. You should make a serious effort to answer each question before moving on to the next one since your thoughts are often clearer earlier on during the exam.
How to Study for the Series 54 Exam
Follow Solomon Exam Prep’s proven study system:
- Read and understand. Read the Solomon Study Guide, carefully. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Solomon Series 54 Audiobook. The Audiobook is a word-for-word reading of the Study Guide.
- Take chapter quizzes in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales.
- Take full practice exams in the Exam Simulator. When you’ve finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 54 exam.
Use these effective study strategies:
- Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
- Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
- Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass.
- Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. Studies show this helps almost as much as explaining to an actual person (see Solomon’s blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
- Use all the resources. The Series 54 Resources folder in your Solomon student account has helpful study tools, including documents that summarize important exam concepts. There’s also a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
- Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
- Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor.
Good practices while studying:
- Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
- Get enough sleep. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 54: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.
You can pass the MSRB Series 54 exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a Municipal Advisor Principal.
Explore all Solomon Series 54 exam prep, including the Study Guide, Exam Simulator, Audiobook, and Video Lecture.
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