Solomon Pass Probability™ Now Available for the FINRA Series 82

Everyone would like to feel confident when they take their securities exam, but how do you know if you’re ready for test day? Solomon Exam Prep can help – with Pass Probability™. Continue reading

Everyone would like to feel confident when they take their securities exam, but how do you know if you’re ready for test day? Solomon Exam Prep can help! With Pass Probability™, now available for the FINRA Series 82 exam, Solomon takes the guesswork out of deciding when to sit for your exam.

Pass Probability™ is Solomon Exam Prep’s innovative technology that measures your readiness to pass your securities exam. Once you take five practice exams in the Solomon Exam Simulator, the Pass Probability™ tool calculates the probability that you will pass your test, with a percentage out of 100.

"A securities licensing exam is hard work and high stakes. Your enemy is uncertainty. Solomon's industry-leading Pass Probability™ feature is based on the results of thousands of Solomon securities students and uses a proprietary algorithm to reduce uncertainty. So you can enter the exam room with confidence."
Jeremy Solomon
Co-founder and President of Solomon Exam Prep

Remediation Reporting

But what should you do if you take five practice exams, and the Solomon algorithm determines that you are not ready to take your exam? This is where Solomon’s brand-new feature, the Remediation Report, comes in.

The Remediation Report is an individualized report outlining how to focus your efforts BEFORE taking your exam. It provides an added level of customized study support – sent right to your email.

The Remediation Report gives you:
  • Summary of current study progress 
  • Personalized recommendations on areas for growth 
  • Study tips for the homestretch 
  • Reminders about student support elements 

In addition to the Series 82, Solomon Pass Probability and Remediation Reports are currently available for the following exams: SIE, Series 6, Series 7, Series 63, Series 65, Series 66, and Series 79. 

Solomon Exam Prep Offers Powerful New AI Feature: Remediation Reporting

Learn about the Solomon Remediation Report, a new analytical feature designed to help students pass their securities licensing exams the first time. Continue reading

Solomon Exam Prep is delighted to announce an advanced analytical feature called a Remediation Report. The Solomon system analyzes a student’s five most recent practice exams and determines whether a student is ready to take his or her exam. If Solomon AI determines that a student is not ready to sit for their exam, then it creates an individual report with personalized guidance on how to remediate and prepare to pass. This custom Remediation Report is sent to the Solomon student’s email inbox.

The Solomon Remediation Report is connected to the Solomon Pass Probability tool, the industry-leading measure of a security exam prep student’s readiness to pass an exam. Solomon Pass Probability is based on thousands of student data points. Once a Solomon student has taken at least five practice exams, the Solomon Pass Probability feature is activated, and the Pass Probability metric is available in the student’s dashboard. The Solomon Remediation Report provides an additional level of customized study support by helping students focus their efforts and remediate before they sit for their exam.

Solomon Pass Probability and Remediation Reports are currently available for the following exams: SIE, Series 6, Series 7, Series 63, Series 65, Series 66, Series 79, and Series 82.

To learn about all the features of the Solomon Exam Prep learning system, watch the video overview.

The Power of Explaining: A Study Strategy Backed by Research

If you’re studying for the Series 65, Series 7, or another securities licensing exam, try this evidence-based study strategy. Continue reading

Solomon Exam Prep’s learning system is built on understanding how people learn. Solomon Exam Prep is always looking for new ways to help our students.  

Research from Dr. Tania Lombrozo of UC Berkeley, published in the journal Trends in Cognitive Science, shows that explaining a new concept to another person is an enormously helpful learning technique. When you explain an unfamiliar concept to another person, your brain makes crucial learning connections. However, many people do not have a person around them that is ready to listen to their new knowledge. Thus, Dr. Lombrozo recommends self-explanation, which is the practice of explaining concepts to yourself in order to better understand them.

Why does explaining work?

Dr. Lombrozo found that the positive effects of self-explanation can be attributed to the generalization process. Explaining requires you to put new information in the context of “prior beliefs,” which makes you generalize the information. In doing so, you are forced to pick out what is most necessary for understanding the concept. In thinking about how to explain something, you in fact learn more about the thing itself!  

Dr. Lombrozo describes an experiment by psychologists Amsterlaw and Wellman that demonstrates the power of explaining in understanding. In Amsterlaw and Wellman’s experiment, they administered logic tests to children under various conditions. During the course of the experiment, the children were split into groups. One group would answer, and then they would be asked to explain the correct answer once it was revealed. A comparison group did the same, but only for half the problems. The third group was a control group and gave no explanation at all. According to Amsterlaw and Wellman, “children in the explanation condition significantly outperformed the comparison and control groups….” In other words, explaining increases understanding.

How to use this strategy for licensing exams:

What does this mean if you’re studying for the Series 65 or the Series 7 or some other securities licensing exam? Solomon Exam Prep suggests finding someone in your life who will listen to you explain topics from your securities exam prep. The person you choose does not need to have any knowledge of securities. The person just needs to be a good listener; even better, someone who will ask questions. What if you don’t have anyone who can do that for you? Well, as Dr. Lombrozo showed, the practice of self-explanation is also helpful and will increase your understanding of the material you are trying to learn.

Other recommended Solomon study strategies include:  
  • Listen to the Solomon audiobook while you read the Solomon study guide.   
  • As you read the Solomon study guide and watch the Solomon video lectures, take notes by hand.
  • When practicing in the Solomon exam simulator, read and re-read the question at least twice. 
  • If you answer a question correctly, explain to yourself why it was correct before reading the question rationale.  
  • If you answer a question incorrectly, read the rationale carefully. Explain to yourself what the right answer is, and why. Write down the explanation in your notes. 
  • Study with a partner. Trade off testing each other on concepts and asking for an explanation.  

Solomon Exam Prep has helped thousands pass their securities licensing exams, including the SIE and the Series 3, 6, 7, 14, 22, 24, 26, 27, 28, 50, 51, 52, 53, 54, 63, 65, 66, 79, 82 and 99.

Solomon Study Question of the Month for April

This month’s study question from the Solomon Exam Prep Online Exam Simulator question database is now available. Continue reading

Study Question

This month’s study question from the Solomon Online Exam Simulator question database is now available.

*** Comment below or submit your answer to info@solomonexamprep.com to be entered to win a $20 Starbucks gift card.***

This question is relevant to the SIE and the Series 7, 14, 50, 52, and 54.

Question: A Municipal Finance Professional (MFP) hosted a $500 plate fundraiser for a governmental issuer. Does this event trigger a ban on business for two years?

A. Yes, it will trigger a ban because an MFP may not host a fundraiser.

B. Yes, it will trigger a ban because the cost per plate is above the de minimis amount.

C. No, it will not trigger a ban because the MFP did not contribute money, only time and space.

D. No, it will not trigger a ban because the MFP was holding the fundraiser, not the municipal dealer.

Correct Answer: A

Explanation: MFPs are not permitted to solicit funds for municipal issuers or their officials without triggering a two-year ban on business for their firm. Thus, holding fundraisers is not allowed. Municipal dealers are also forbidden from holding fundraisers.


To explore free samples of Solomon Exam Prep’s industry-leading online exam simulators for the SIE, Series 7, Series 14, Series 50, Series 52, Series 54, and other FINRA, MSRB, NASAA, and NFA exams, visit the Solomon website here.

Broker-Dealer vs. Investment Adviser: What’s the Difference?

Do your customers know the difference between an IA and BD? Do you know the importance of this distinction and how it may affect your registration status? Continue reading

Do your customers know the difference between an investment adviser and broker-dealer? Do you know the importance of this distinction and how it may affect your registration status? 

Investment Adviser or Broker-Dealer at work.

For many retail customers, the difference between an investment adviser (IA) and a broker-dealer (BD) may not seem important. A customer may have received an investment recommendation from a BD, or owned securities through an IA account. However, which kind of firm you work for is important for knowing which services you may provide, how you may provide them, and which qualification exams you must pass.

Investment Advisers

Investment advisers are usually firms, though they can be an individual operating as a sole proprietor, whose primary business is providing investment advice, and who are paid for the advice itself. Investment adviser representatives (IARs) are individuals who work for IAs and advise the IA’s clients on the IA’s behalf. IAs and IARs are not “stockbrokers” and cannot directly buy or sell securities for their customers. While many have IA accounts through which they own stocks, mutual funds, and other securities, in fact these are accounts an IA opens on the customer’s behalf with a BD. 

Broker-Dealers

Broker-dealers are usually firms, though they can be an individual operating as a sole proprietor, that execute securities transactions for customers. An individual who is employed by a BD to handle customer accounts is called an “agent of a broker-dealer” on some exams, or a “registered representative” (RR) on others. BDs can offer investment advice incidental to their work with customers but cannot be compensated for the advice itself. If a BD acts as an intermediary between a buyer and a seller, then the BD can charge a commission on the trade. If a BDs buys or sells from its own inventory, then the BD makes money by charging a markup on securities that they sell and taking a markdown on securities that they buy.

So, if you’re an IAR, you… 
  • …can provide advice
  • …can be paid for that advice
  • …cannot execute trades
  • …cannot charge commissions or markups on your customer’s trades
If you’re a BD agent (also known as a registered representative), you…
  • …can provide advice
  • …cannot be paid for that advice
  • …can execute trades
  • …can charge commissions or markups on your customer’s trades

Testing and Licensing

Finally, many firms, especially larger ones, maintain both IA and BD registrations. When working for these “dual registrants,” you may be asked to qualify as an IAR, BD agent, or both, depending on your role.

In fact, an increase in dual registrations is one of the note-worthy trends Solomon discusses in our recent white paper, “Optimizing On-Boarding in 2021: 7 Key Trends for the Securities Industry,” available for download from this blog post

To become an agent of a broker-dealer (registered representative), you must pass the Securities Industry Essentials (SIE), and a “top-off” exam such as the Series 6 or Series 7, and for state registration usually the Series 63. To become an IAR, you must pass either the Series 65, or, if you work for a dually registered firm, the SIE, the Series 7, and the Series 66.

January Study Question of the Month

This month’s study question from the Solomon Online Exam Simulator question database is now available. Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

***Comment below or submit your answer to info@solomonexamprep.com to be entered to win a $20 Starbucks gift card.***

This question is relevant to the SIE, Series 6, 7, 22, 24, and 82 exams.

Question:

Which of the following people would be considered a specified adult?

Answer Choices:

A. A 16 year old with autism

B. A 30 year old

C. A 60 year old with a heart condition

D. An 18 year old in a coma

Correct Answer: D

Explanation: A specified adult is a natural person age 65 and older or a natural person age 18 and older who the member firm reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interests.

December Study Question of the Month

This month’s study question from the Solomon Online Exam Simulator question database is now available. Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

***Comment below or submit your answer to info@solomonexamprep.com to be entered to win a $20 Starbucks gift card.***

This question is relevant to the Series 6, 7, 14 and 79 exams.

Question: 
 
Which of the following is not typically part of an underwriting agreement?
 
Answer Choices:
 
A. Description of the per-share underwriting spread
 
B. Description of a Greenshoe option
 
C. Terms between syndicate members and selling group dealers
 
D. Terms under which the underwriter can terminate the contract
 
 

Correct Answer: C

Explanation: The underwriting agreement, which is typically signed the evening before or the morning of the effective date of a securities issue typically includes the per-share underwriting spread, an over-allotment (Greenshoe) option if granted, and the underwriter’s termination rights. It also is the document that contains the public offering price or a formula to derive it.

 

SEC Announces Major Revisions to Registration Exemptions Aimed at “Harmonizing” Regulation A Offerings, Regulation D Private Placements, and Crowdfunding

On November 2, the SEC announced a collection of rule changes meant to, in the announcement’s words, “harmonize, simplify, and improve” its “overly complex exempt offering framework.” Continue reading

On November 2, the SEC announced a collection of rule changes meant to, in the announcement’s words, “harmonize, simplify, and improve” its “overly complex exempt offering framework.” The changes affect Regulation A, which governs small public offerings; Regulation D, which governs private placements; and Regulation CF, which governs crowdfunding. This system of exemptions allows various small offerings to avoid the normal registration process required by the Securities Act.  
 
The rule changes should provide a clearer choice as to which exemption is most appropriate to an issuer, based on how much the issuer needs to raise and other factors.
 
The changes also seek to clarify how issuers can avoid “integration” of exempt offerings. Integration is the risk that exempt offerings will be considered a single offering by the SEC, because the offerings are too similar.
 
Highlights of the changes include:
 
  • If two exempt offerings are conducted more than 30 days apart, they are almost always protected from integration.
  • An issuer can “test the waters” with potential investors before deciding which exemption it will use for an offering. Test-the-waters communications solicit interest in a potential offering before the issuer has filed anything with the SEC. Previously, an issuer could only test the waters after deciding that its potential offering would take place under Regulation A.
  • Caps on the amount that may be raised through these exemptions have been increased:
    • Crowdfunding: from $1.07 million to $5 million
    • Regulation A, Tier 2: from $50 million to $75 million 
    • Regulation D, Rule 504: from $5 million to $10 million
  • Make “bad actor” exclusions more consistent across different exemptions.
The rule changes will take effect early next year. Until the changes take effect, securities exam questions will continue to be based on the old rules. FINRA Exams affected by these rule changes include the SIE, Series 6, Series 7, Series 14, Series 22, Series 24, Series 65, Series 66, Series 79, and Series 82.

Testing integrity in times of COVID-19

Test candidates are bound by guidelines that prohibit cheating or using any unfair means during the exam. Continue reading

On July 13, 2020, FINRA and NASAA responded to the pandemic testing challenge posed by in-person test centers with Prometric’s ProProctor, an online testing service, for certain qualifications exams. The exams for which online testing is permitted are the FINRA Securities Industry Essentials (SIE), Series 6, Series 7 and the NASAA Series 63, Series 65, and Series 66 exams. Read more about the announcement here

Curious about what the ProProctor online testing experience looks like? Click here to find out.

It is interesting to note that although the exams are proctored remotely, candidates are still bound by guidelines that prohibit cheating or using any unfair means during the exam. The checks that have been put in place especially for remote testing are as follows:

  • Candidates are required to provide a 360° view of his/her workstations and surrounding environment;
  • A camera (external or embedded) is required during the course of the exam. If an embedded camera is used, a large free-standing mirror is also required in order to reflect unseen areas;
  • Candidates are asked to participate in a visual person check (including a sleeve, pocket and glasses check);
  • While the exam is in progress, candidates are prohibited from leaving, moving out of or obstructing the camera view while the exam is in progress without prior authorization from the proctor; and
  • Additional requirements that are listed in the ProProctor User Guide.

Warning: a candidate found cheating in an online test will be subject to the same disciplinary actions that he/she would be subject to in a physical test, and if found guilty, can be permanently barred from the broker-dealer industry.

Passing Your Securities Exam May Now Make You an Accredited Investor

On Wednesday, the SEC finalized rule changes that will broaden its definition of “accredited investor” to encompass industry professionals who have earned certain FINRA licenses. Continue reading

On Wednesday, the SEC finalized rule changes that will broaden its definition of “accredited investor” to encompass industry professionals who have earned certain FINRA licenses.
 
An accredited investor is an investor considered sophisticated enough to weigh an investment’s merits independently. Accredited investors have easier access to certain types of investments, such as private equity offerings.
 
Under the newly expanded definition, General Securities Representatives (Series 7), Private Securities Offerings Representatives (Series 82), and Licensed Investment Adviser Representatives (Series 65) are now accredited investors. The SEC indicated that it may add other FINRA licenses later.
 
The rule change also allows “spousal equivalents” such as domestic partners to qualify as accredited investors based on the total income and assets of both partners, a benefit previously limited to couples who are legally married. Native American tribes and foreign governments now qualify as accredited investors as well.
 
The Solomon Exam Prep team is always on the lookout for how current developments affect the securities industry. For more updates from our Industry News blog, use the subscribe form on this page.