Big Changes Ahead for the Series 7 Exam

At the FINRA annual conference in May in Baltimore, FINRA announced that it is in what sounds like the final stages of a substantial revision to the Series 7 Continue reading

At the FINRA annual conference in May in Baltimore, FINRA announced that it is in what sounds like the final stages of a substantial revision to the Series 7 General Securities Representative Exam. The new Series 7 exam will test five major job functions, down from the current seven. Within the five major job functions, the revised Series 7 exam will test 29 tasks associated with the major job functions of a registered representative. According to the FINRA, the new Series 7 exam will contain “200+ knowledge statements” associated with the five functions and the 29 tasks.

The five job functions of the new Series 7 General Securities Representative Exam will be:

“Seeks business for the broker-dealer through customers and potential customers”

“Evaluates customers’ financial status, financial needs and risk tolerance, and helps them identify their investment objectives”

“Opens accounts, transfers assets and maintains appropriate account records”

“Provides customers with information on investments and makes suitable recommendations”

“Obtains and verifies customer’s purchase and sales instructions, enters orders and follows up”

These five functions are the same or substantially similar to ones on the current Series 7 exam. A notable change from the existing Series 7 exam is the addition of evaluating customer “risk tolerance.”

Removed or merged into other categories are:

“Explains the organization, participants, and functions of various securities markets and the principal factors that affect them”

“Monitors the customer’s portfolio and makes recommendations consistent with changes in economic and financial conditions as well as the customer’s needs and objectives”

The revised Series 7 will still be 250 questions long with an additional ten non-scored “pre-test” questions that will be randomly distributed on the exam. The revised Series 7 exam will remain six hours in length, broken into two three-hour segments.

Although no specific timeline was provided, the FINRA announcement said that the new Series 7 content outline would be submitted to the SEC first and then once the SEC approves the proposed changes, the new content outline would be posted on the FINRA web site and then some time after that the test would be launched at the testing centers.

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