Tips to Know Before Taking Licensing Exams
Which Exam is Right for You?
Many different exams allow you to do different things. We’ve highlighted some key licenses as well as what having that license provides you:
- Securities Industries Essentials – The Prerequisite examination which is needed prior to taking on any other qualification exam appropriate for the type of business the individual will engage in.
- Series 6 – Enables Individuals to sell packaged securities, such as mutual funds and Variable Annuities. An advisor cannot sell individual stocks or bonds.
- Series 7 – Enables Individuals to sell nearly every type of investment product, except commodities, which requires a series 3 license, as well as real estate and life insurance which have their own licenses.
- Series 63 – State exam which Enables Individuals to conduct business within it’s borders. This must be passed in addition to the series 6 or 7.
- Series 65 – Enables Individuals to be compensated with fees as opposed to commission. Similar to the Series 63.
- Series 66 – Combines the series 63 and the series 65.
- The Personal Financial Specialist Exam - Personal Financial Specialist (PFS) is a certification for certified public accountants (CPAs), allowing them to expand their expertise to include financial planning and wealth management.
- Certified Financial Planner Exam – A Certified Financial Planner® (CFP®) is a formal recognition of expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement.
Understanding the Time Commitments
The first step is knowing what you are going to be participating in. We’ve highlighted a few key exams to showcase what these exams entail.
The Securities Industries Essentials is an exam that is composed of 75 questions, with 10 practice questions that do not count towards your score, takes an hour and 45 minutes to complete, while requiring a passing score of 70 or above. While everyone learns and retains information at a different pace, it’s recommended to allot 50 hours to studying prior to taking the exam.
The Series 7 exam contains 125 questions, with 10 practice questions that do not count towards your score, takes three hours and forty-five minutes to complete, while requiring a passing score of 72 or above. It is recommended to spend anywhere from 80-100 hours studying for the Series 7 exam in order to be adequately prepared for it.
Life Insurance varies state to state, so we will use New Jersey as an example. The New Jersey Life Insurance Exam contains 83 questions, takes three and a half hours to complete and requires a passing score of 70 or above. It is recommended to spend anywhere from 50-75 hours studying for your states Life Insurance Exam.
All Financial Exams required for licensing come with their own unique challenges. It is important to know the basics of the exam and what to expect from a test taking standpoint in order to do well.
Finding the Right Study Material
Finding exam preparation material can be challenging as there are many options to choose from, but none are necessarily cheap either.
Many prep courses offer text books for studying, online on-demand lectures, various ways to create notecards, as well as provide a number of practice exams to work on.
We’ve broken down a few of our favorites and describe what may make them best for you:
- Securities Training Corporation – Select from 3 different levels of material ranging from all the text information, study manuals, practice exams, all the way up to being able to attend virtual or in-person classes on topics related to the exam. We find that STC provides clients with the most informative and in depth learning experience for those who select STC.
- Solomon Exam Prep – Solomon offers an affordable way for those ambitious learners to prepare for their licensing exams. Solomon offers the ability to pick and choose between
Online Study guides, exam simulators, video lectures, audiobooks, flashcards and live classes allowing you to mix and match what learning method works best for you.
- Kaplan Test Prep – Kaplan specializes in providing a good overall experience but it stands out with their ability to offer the most opportunity for in-person classes. Kaplan has a number of various brick-and-mortar offices throughout the United States as well as the most extensive list of courses available to attend live. If an in-person experience is best for you, Kaplan is a great resource.
Test Day Prep
While studying for the exam is tough enough, it is important to remember a few key things for test day that relate to setting yourself up for success:
- Prepare everything needed for the exam the night before.
- Ensure you get a good night’s rest prior to exam day.
- Wear comfortable and appropriate attire.
- Eat a balanced breakfast and hydrate.
- Focus and remain calm upon arrival.
Setting yourself up for success will make an impact on your ability to test at your highest level.
Read the Full Question
On many of the licensing exams, one of the best tips we can give you is to read the full question.
While this may sound obvious, many people find themselves skimming through the question to find one piece of information they are looking for.
The best way to approach each question is to do the following:
- Read the full question and all answer choices.
- Re-read the last sentence of each question. Be sure to take note of any negative language such as nor/not or other words which can change the meaning of the question. An example of this could look like – “Which of the following fees are typically not associated with variable annuities?” Some answers will include fees that are typically associated with variable annuities, however the correct answer is specifically the one type of fee that is not.
- Ask yourself “what do they want from me?”
Getting tricked on a question due to the way it’s asked can be easily avoided by approaching each question in this manner.
Eliminate Wrong Answers & Stick With Your Gut
A great way to improve your performance on the exams is to eliminate wrong answers.
Some questions on the exam will contain answers that say “all of the above” or “none of
the above”.
This is where it is important to eliminate answer choices within the question as it can allow you to find out the right answer even if you may not be absolutely sure of it.
If you’ve taken the time to read the question carefully and have narrowed it down to a selection, it’s often best to stick with it.
Statistically you are more likely to be correct on your first attempt, so if that is what your gut is telling you, stick with it!
Going Above & Beyond
At the end of the day, the only one who can be sure that you’ve adequately prepared for the exam is yourself.
It is vital to put in the necessary hours and studying to be prepared to take the exam.
Being honest with yourself and taking more time if needed is a key aspect to these exams.
If you are going to be dedicating all this time and effort to it, it’s best to put in the work upfront and be safe rather than sorry!
Your Next Move!
Now that you have some insight on licensing exams and some tips on how to be successful with passing them, what’s next?
At FFP Advisor, we specialize in adding value to CPA’s and their practices to reach their fullest possible potential.
Feel free to request a complimentary Discovery Call with us today to see what we can do for you and your practice.
