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7.2: A Career in Stocks

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    Video - Audio - YouTube (Material for this section starts on slide #23.)

    As our last section on stocks and stock investing, we take this opportunity to once again implore you to consider a career in the investment industry. The industry needs you! There are thousands of professionals who are close to retirement. The industry knows this and they also know that they need diversity. We need more women, minorities, and bilingual speakers. Ex-military are especially welcome since the investment industry is highly regulated and structured and who better to recruit than those who have lived and thrived in the highly regulated and structured world of the military. Over the decades of the 1980’s, 1990’s, and into the 2000’s, finding and nurturing new investment professionals became difficult. For that reason, the industry, led by the Financial Industry Regulatory Authority (FINRA), introduced a new entry-level exam to facilitate an easier way to break into the business, the Securities Industry Essential (SIE) Exam.

    The Securities Industry Essentials (SIE) Exam versus the Series 7 General Securities Representative Exam

    In 2018, FINRA rolled out the Securities Industry Essentials Exam, also known as the SIE Exam. The aim was to create a new entry-level exam that could be taken by anyone interested in a career in the investment industry. Before the SIE Exam, the previous entry-level exam was the Series 7 General Securities Representative Exam, also known as the Series 7 Registered Representative Exam, Series 7 Stockbroker Exam, or simply the Series 7 Exam. However, before someone could sit for the Series 7 Exam, they were required to be sponsored by a brokerage firm. Brokerage firms became very reluctant to sponsor individuals without knowing beforehand that they could pass the exam since the cost of preparing someone for the Series 7 as well as the cost of the Series 7 itself are not insignificant. The SIE Exam requires no brokerage sponsorship and the cost is substantially lower than taking the Series 7. As of March 2022, the cost to take the SIE Exam was $60 as reported on FINRA’s website.

    The material on both exams is very similar. By taking this course, you are learning the bulk of what is needed to be studied. There is more material that you are expected to know that we do not cover in this class, especially matters concerning compliance issues. There are numerous study guides and practice exams available from FINRA and from dozens of third-party. The free practice exam from FINRA is a great place to start to see how much you have already learned. Studying and taking as many practice exams as possible seems to be the best way to prepare for the exam.

    Once you pass the SIE Exam, the industry will come a callin’. Recruiters will know that you are goal oriented and motivated to become an industry professional. They will also know that there is a very good probability that you will pass the Series 7 exam. For that reason, they will be willing to make the necessary and substantial investment in you as a new professional.

    Okay, so what kind of time commitment are we talking about here, eh? We tell students that to pass the Series 7, you should expect to study one to two hours per day for at least 2 months. It pays to spend the same amount of time for the SIE Exam. Study hard, pass easily. At least one previous student told us that he spent two weeks studying three to four hours per day and passed the SIE Exam on his first try. Don’t be discouraged if you fail on the first attempt on either exam. Typically what happens is an individual will believe that they sufficiently understand one or two of the more difficult sections of the exam when in reality, they did not thoroughly study enough. They then realize what topics they need to go back and learn more completely. A few of the trickier concepts are options, buying on margin, and shorting. We will delve into these topics at the end of the course.

    There is a second exam that one must take after taking the Series 7. It is the Series 63 or the Series 66, depending upon your potential position. Neither is as difficult as the Series 7. Both require about two weeks of studying one to two hours per day.

    “But Do I Have What It Takes?”

    Yes! There is a future for you in the investment industry. Not everyone in the industry has to be a stockbroker. There are numerous types of positions available within the investment industry. And don’t forget about other financial services industries such as insurance and banking. The real estate and mortgage industries need financial professionals, too. Many of the positions require direct contact with the public. However, many do not. There is room for everyone, extrovert and introvert.

    As discussed previously, I have my own predictors. Are you a positive, optimistic person with a sunny disposition? Do you like to socialize? Do you enjoy meeting new people? Do you want to help them succeed? Are you not afraid to ask someone if they need your help? If they say, “No,” are you still willing to go to the next person and ask the same question ... and then go on to ask twenty-seven more people? In short, are you a go-getter who refuses to give up? Will you never give up? If you can answer, “Yes,” to all or most of these questions (especially the part about never giving up), I guarantee you will do well in the industry. You might bounce around from one position to another for a bit but you will find your place. We highly recommend you read this article from the prestigious industry magazine, the Financial Times: US Financial Advisors Struggle to Overcome Their Lack of Racial Diversity. The industry needs you!

    This page titled 7.2: A Career in Stocks is shared under a CC BY-NC-SA 4.0 license and was authored, remixed, and/or curated by Frank Paiano.