Becoming aninsurance agentorfinancial advisorrequires individuals to demonstrate professional knowledge by passing professional examinations.
TheSecurities Industry Essentials ExamorSIE Examis the first exam you will take in your path to becoming licensed to sell securities. The SIE Exam covers the basic information you need to get anSIE license and begin a career in the securities industry.
With study and an understanding of the licensing process, you can begin a rewarding career in securities or insurance.
Security Industry Essentials (SIE) Overview
In 2018, FINRA introduced the SIE Exam (Securities Industry Essentials Exam) to test prospective securities professionals on their basic knowledge.The SIE Exam covers the essentials that everyone working with securities should know before starting their career.
TheFinancial Industry Regulatory Authority, or FINRA, is in charge of the SIE Exam and all other exams that securities and insurance agents take. This non-profit organization is authorized by the U.S. government to regulate the industry, including licensing exams. They work to make sure that professionals have the knowledge they need and that investors can invest with confidence.
FINRA is overseen by the Securities and Exchange Commission, or the SEC, and enforces all federal laws related to securities.
What are the SIE exam requirements?
The basic requirements to register for the SIE Exam make it one of the most accessible in the securities industry. Test-takers must be at least 18 years old and have a valid photo ID.
The SIE Exam costs $80and can be taken at any Prometric Test Center or through a firm with access to FINRA’s Central Registration Depository.
What is on the SIE exam?
The exam tests a combination of understanding how securities are sold as well as regulations that a professional in the investment industry must follow. The SIE Exam focuses on federal regulations while other exams, such as theSeries 63,Series 65, andSeries 66, cover state-specific regulations.
The SIE Exam consists of 75 questions that cover the following topics:
- Knowledge of Capital Markets
- Understanding Products (equity securities, debt instruments, and others) and Their Risks
- Understanding Trading, Customer Accounts, and Prohibited Activities
- Overview of Regulatory Framework
Each question has four multiple choice options. Ten additional questions are scattered throughout the test and unscored. Each test-taker answers 85 questions total, with ten of those not contributing to the overall score. You should answer each question, even if you are not sure of the answer.
Test takers have1 hour and 45 minutes to complete the exam, with an additional 30 minutes designated for a test-taking tutorial before beginning the exam. This helps those unfamiliar with the format learn how the exam will go before their official time begins.
Individual instructions are provided by the testing center but most restrict personal items in the testing room, provide procedures for bathroom breaks, and make special accommodations available if needed. Study sheets and reference materials are not allowed during the test. An exam proctor will check everything that you plan to bring into the testing room before allowing you to begin.
You will receive your test results immediately after finishing the SIE exam, an official copy will be sent to FINRA. Your raw score will be scaled to adjust for slight variations in difficulty between versions of the test. This final score shows whether you passed or failed the test.
A scaled score of 70 is required to pass the SIE Examination. Passing scores are valid for four years.
What do I Need to Know Before Taking the SIE Exam?
The SIE Exam covers the basics of the securities industry, so in-depth knowledge is not expected. Focus on basic terminology and federal regulations. Anexam outlineis available from FINRA that goes over every section of the exam.
When studying for the exam,most people choose to take anonline study course. For securities exams, self-paced courses are available, but due to the advanced nature of the material, most choose to enroll in a live, instructor-led class.
Recommended Course
For SIE exam prep, study guides and practice materials, StateRequirement recommends: Kaplan Education Company
Who Needs to Take the Securities Industry Essentials Exam?
Everyone working with securities needs to take andpass the Securities Industry Essentials Exam. This applies to both financial advisors and those selling insurance. The SIE Exam ensures that every professional has a basic understanding of securities. Those who were licensed before October 1, 2018 do not need to take the SIE Exam as long as they continue to meet the continuing education requirements of their current licenses.
Insurance salespeople are not all required to take the SIE Exam but not becoming licensed in securities will limit their ability to work with clients. Insurance agents who have a securities license are able to provide their clients with the option to invest in products tied to the securities market as part of their retirement and life insurance plan.
How to Become a Financial Advisor or Insurance Salesperson
Becoming a financial advisororbeing licensed to sell insurance with securitiesinvolves more than completing one exam.
The SIE Exam is only the first professional examination that those working in the securities industry will need to pass. It covers the basic foundation of securities.To become licensed, you will need to pass a more in-depth exam specific to your specialized area. These exams are also regulated and provided by FINRA, with similar testing procedures to the FINRA Security Industry Essentials Exam.
In addition to securities licensing, tobecome an insurance salespersonor financial advisor you will also need an insurance license.Each statehas their own licensing process and exam for insurance agents with different pre-licensing education requirements for each type of insurance:life, health, disability,property, casualty, and others.
Some people choose to take their specialization exams on the same day as their SIE Exam. This can be done at most testing centers through their back-to-back scheduling option.
Tip:
StateRequirement recommends that you study for and take one exam at a time. Taking multiple exams on the same day may seem like a way to save time, but a focused approach is the best way to ensure you pass on your first attempt.
While the SIE Exam can be taken before beginning a career in securities, you must be associated with a firm or self-regulatory organization, SRO, to take an advanced qualification exam.
Series 6 Exam
Most professionals new to securities take theSeries 6 Exam. It is designed to evaluate entry-level knowledge of an investment company and variable contracts products representative.
The Series 6 Exam consists of 50 questions about federal regulations, centering on mutual funds.
Afterpassing the Series 6 Exam, you will be able to market and sell mutual funds, variable annuities, variable life insurance, unit investment trusts, and municipal fund securities, such as 529 savings plans.
Many bankers and insurance agents start with their Series 6 Exam after passing the SIE. You can even ask your employer to pay for the exam and provide designated time to study for it. After the SIE Exam, this is the most common entry-level exam in the securities industry.
Series 7 Exam
TheSeries 7 Examallows you to participate in more securities activities. Like the Series 6 Exam, it can be taken at the same time or after the SIE Exam. It is required for those working as a general securities representative.
The Series 7 Exam has 125 questions and includes additional testing of knowledge of bonds and options. It is designed to be a more comprehensive test and allows those with a Series 7 designation to work with more securities products.
Afterpassing the Series 7 Exam, you will be able to work with public offerings of stocks and bonds, rights, warrants, mutual funds, money market funds, unit investment trusts, exchange-traded funds, real estate investment trusts, mortgage-backed securities, government securities (including repos and certificates of accrual), direct participation programs, securities traders, venture capital, sale of municipal securities, and hedge funds.
Series 63, 65, and 66 Exams
States have their own securities regulations as well. TheNorth American Securities Administrators Association(NASAA), works with FINRA to develop and administer additional tests focusing on state regulations.
TheSeries 63 Exam, the Uniform Securities Agents State Law Exam, is required by many states for broker-dealer representatives. TheSeries 65Exam, the Uniform Investment Advisor Law Exam, serves the same purpose for investment advisor representatives. With the Series 63 designation, you will be able to take and place orders for the sale of securities. The Series 65 designation allows you to advise clients as well.
Some choose to combine both designations and take theSeries 66Exam, the Uniform Combined State Law Examination. For those starting work as a financial advisor, Series 66 is often the best exam to take because it satisfies all requirements.
It is important to note that these exams do not replace the Series 6, Series 7, or any other FINRA exam that you may need.
Other Qualification Exams
There are numerous other advanced exams that those working in the securities industry will need to take and pass, depending on their area of specialization. These include the Series 22 Exam for Direct Participation Program Representatives, Series 57 Exam for Securities Traders, Series 79 for Investment Banking Representatives, and Series 82 Exam for Private Securities Offerings Representatives. Additional exams allow professionals to work in research, regulation, and operations.
Tip:
Most insurance salespeople will need, at least, their state insurance license, the Series 6 license, and a Series 63 license to transact a majority of products. Financial advisors will generally replace the Series 6 with a Series 7 license.
Tips for the SIE Exam
Think of the SIE Exam as your foundation for all future work in securities. It is important to master the basics before moving onto specialized knowledge. It is also a great opportunity to demonstrate your knowledge and commitment on your resume before applying to a firm since there is no need to be employed before taking the exam.
Study guides andtest preparation materialscan help you make the most of your time getting ready for the SIE Exam. FINRA also offers an outline andpractice testfor prospective test-takers.
Ready to take the next step to becoming a licensed securities professional? The Securities Industry Essentials Exam is the perfect place to start.If you are ready to take and pass the SIE Exam,register with FINRAto schedule your exam today.
What is the SIE Exam FAQ
What is the securities industry essentials (SIE) exam?
The Securities Industry Essentials (SIE) Exam is the first exam you will take on your path to becoming licensed to sell securities. It’s a great way to improve your industry knowledge, whether you’re working as alife insurance agentor afinancial advisor.
What is the purpose of an SIE exam?
The SIE Exam is a qualification exam administered by FINRA. This introductory-level exam tests a candidate’s knowledge of basic securities industry information, including concepts fundamental to working in the industry.
What are the requirements to take an SIE exam?
The basic requirements to register for the SIE Exam include the following:
- Must be at least 18 years old and have a valid photo ID
- Pay exam fees at any test center or through a firm with access to FINRA’s Central Registration Depository
What does the SIE exam consist of?
The SIE Exam consists of 75 questions that cover the following topics:
- Knowledge of Capital Markets
- Understanding Products and Risks
- Understanding Trading, Customer Accounts, and Prohibited Activities
- Overview of Regulatory Framework
Depending on the exam provider, exam takers usually have one hour and 45 minutes to complete the exam. The SIE exam costs $80.
Is the SIE exam difficult?
The SIE exam is quite challenging, but preparing and studying for the exam enables you topass the exam on the first try. When studying for the exam, you can choose to take online study courses, whether self-paced or in an instructor-led classroom format.
What are the benefits of taking the SIE exam?
Some of the benefits of passing the SIE exam include the following:
- You increase your marketability in the financial services industry.
- Sets you apart from your peers that are looking for jobs or internships.
- Opens doors to advance your career.
What happens if you fail the SIE exam?
If you fail the SIE, you are allowed to retake it. According to FINRA, you have to wait 30 days after the first time you fail and another 30 days if you fail again.
Information on this page has been gathered by a multitude of sources and was most recently updated on July 2022.
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
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FAQs
How many questions do you need to get correct on the SIE? ›
The passing SIE exam score is 70, and the results are valid for four years. With an average pass rate of 74%, the SIE exam difficulty is very challenging. For a passing pass rate score, candidates must answer 53 out of the 75 questions correctly. Individuals 18 or older are eligible to take the SIE FINRA exam.
How many questions can you get wrong on the SIE? ›With 75 questions and a required score of 70%, the SIE exam doesn't offer a large margin for error (in order to pass you must correctly answer at least 53 out of the 75 questions) in the hour and 45 minutes.
How can I pass Sie exam easily? ›- No. 1: Study. ...
- No. 2: Study the right material. ...
- No. 3: Use practice tests. ...
- No. 4: Get help if necessary. ...
- No. 5: Understand what you're studying. ...
- Get the help you need from Securities Training Corporation.
SIE Exam Difficulty Level
While the SIE is considered an introduction to the financial industry, the exam is not easy. Many testers pass on their first attempt, but some may need two tries.
What Is the Pass Rate for the SIE? The passing score for the SIE exam is 70%, but will be adjusted to equalize the specific mix of questions each candidate faces. This way everyone tests on a level playing field. The average rate at which candidates pass the SIE on their first try is 74%.
Can you study for the SIE in a week? ›Studying for the SIE Exam
Achievable Blog recommends studying for 20 to 50 hours and for approximately two months. However, if you have experience in the field, you can expect your study time to be less than that. Review the FINRA content outline to get a full understanding of the test's structure and content.
Annuities. Another of the SIE Exam hardest sections is that of Annuities. This might also come as an unsurprising revelation. Quite frankly few young people know how annuities work, because they don't need them (or they have yet to think about retirement).
Is there a lot of math on the SIE? ›Remember, the SIE exam focuses on reading comprehension. Students can expect very few calculations on their exam. Many students report only seeing one or two calculation items.
Does the SIE have 75 or 85 questions? ›Therefore, each candidate's exam consists of a total of 85 items (75 scored and 10 unscored). There is no penalty for guessing. Therefore, candidates should attempt to answer all items. Candidates will be allowed 1 hour and 45 minutes to complete the SIE exam.
Do you get Sie exam results immediately? ›Upon completing your online test, you will receive your unofficial pass or fail notification on screen. Within three business days, your test results will be validated, emailed to the address provided at the time of scheduling and posted to FINRA's systems.
How many times can I fail Sie? ›
After the first and second failed attempts, there is a 30-day waiting period. After the third failed attempt, there is a 180-day waiting period. For any attempts after the third attempt, there is also a 180-day waiting period between each exam attempt. 3.
Is calculator allowed on Sie? ›You cannot bring in anything with you—pen, pencil, calculator, cell phone, smart watch, paper—everything is prohibited. FINRA takes cheating seriously (and rightfully so), so DO NOT CHEAT. You could be permanently barred from the securities industry if you are caught cheating.
How long do people study for the SIE? ›For the SIE exam, you should plan to spend between 100-150 hours with the materials prior to attending the Live Classroom Review to maximize your learning. For the Series 6 Top-Off exam, candidates should plan to spend approximately 80 hours with their materials.
Why is sie so hard? ›The SIE exam is hard for some people for the same reason that any new subject is difficult. To this point, in my experience with students, the SIE Exam difficulty is not so much due to the challenging nature of the questions. It's more due to the novelty of the content.
Does the SIE tell you your score? ›Once you complete the exam, your unofficial results will be displayed on the computer screen explaining whether you passed or failed. It also will provide a score profile indicating your performance on the major areas of the exam. You will also get a printout of your results from the exam center.
What happens if you fail Sie? ›There is a 30/30/180-day rule with respect to the SIE and other FINRA exams. This means that you must wait 30 days after the first time you fail, and another 30 days if you fail again. If you fail a third time or more, you'll have to wait 180 days to retake the exam.
Is the SIE worth taking? ›The SIE Exam is the stepping stone to your financial services career because it's the co-requisite to taking any of the FINRA qualification (Series) exams. Passing the SIE Exam doesn't qualify you for registration with a FINRA member firm or to engage in securities business.
Can you skip questions Sie exam? ›On the Essentials Exam there is no way for you to skip questions. It's computer generated exam that requires an answer before you can continue.
Is Sie or Series 7 harder? ›According to most students, the Series 7 is quite challenging, and is more difficult than the SIE. This might be because the Series 7 has significantly more depth in options. Also, the product questions are more application/suitability-based, whereas the SIE focuses more on the definitional treatment of products.
Does Sie Make Series 7 easier to pass? ›Because the Series 7 Top-Off will be full of these long, suitability-based questions, candidates should expect it to be a challenging test. While the product questions on the SIE are not nearly as complex as in the Series 7 Top-Off, the SIE is by no means an “easy” exam.
How to study for SIE exam? ›
- Find an SIE class and/or tutor. ...
- Devote consistent time to study. ...
- Watch SIE prep videos. ...
- Understand how financial concepts apply in the real world.
The SIE exam, like other FINRA exams, is presented in a bell curve. Exams presented in this manner should start with easier questions, move to more challenging questions, and end with easier ones. However, we recommend taking the exam with no expectations concerning question difficulty.
Is the SIE all multiple choice? ›The SIE exam contains 85 multiple-choice questions, 10 of which are unscored, and you will be given a time limit of 1 hour and 45 minutes. The 10 unscored questions are scattered randomly throughout the exam and are unmarked, so you will not know which questions are scored or unscored.
Is the SIE exam open book? ›Besides, the SIE is not an open-book exam. As a result, FINRA takes some steps to ensure that test-takers are honest. You will need: A movable camera OR an undocked laptop with a large free-standing mirror.
What happens after passing Sie exam? ›After You Pass the SIE
In order to become registered to engage in securities business, an individual must pass the Essentials exam and a qualification exam appropriate for the type of business the individual will engage in. The individual must be associated with a member firm to take a qualification exam.
The SIE is a stepping stone, not a job qualification.
The SIE exam is just one of many steps you'll need to take to get hired. Passing the SIE exam before applying to firms shows recruiters that you're motivated and serious about the financial industry, and that you've taken education into your hands.
You need a score of 70% or better to pass the SIE.
Do you find out right away if you pass Sie? ›You will also get a printout of your results from the exam center. FINRA will post your official results with the Central Registration Depository (Web CRD) or report it to your regulator within three business days following your exam.
How many hours should I study for the SIE? ›For the SIE exam, you should plan to spend between 100-150 hours with the materials prior to attending the Live Classroom Review to maximize your learning. For the Series 6 Top-Off exam, candidates should plan to spend approximately 80 hours with their materials.
Is the SIE exam curved? ›The SIE exam, like other FINRA exams, is presented in a bell curve. Exams presented in this manner should start with easier questions, move to more challenging questions, and end with easier ones. However, we recommend taking the exam with no expectations concerning question difficulty.
How long do SIE results take? ›
Within three business days, your test results will be validated, emailed to the address provided at the time of scheduling and posted to FINRA's systems.
Can I use a calculator on Sie? ›You cannot bring in anything with you—pen, pencil, calculator, cell phone, smart watch, paper—everything is prohibited. FINRA takes cheating seriously (and rightfully so), so DO NOT CHEAT. You could be permanently barred from the securities industry if you are caught cheating.
How is the SIE exam graded? ›The passing score for the SIE is 70 (on a scale of 0 to 100). This test score is placed on a common scale with all other candidate test scores for that exam and statistical adjustments are made to the score to account for slight variations in the difficulty that may exist among different sets of exam questions.