By Jim MooreApril 28, 2023July 11, 2024Jim
We often get asked to differentiate the Series 66 vs Series 7 Exams. The reason being, that one typically follows the other.
Anyone that has taken both of them will tell you that neither is a walk in the park. In today’s post, we take a deeper dive into what we believe are key differentiators, and where we see the most failure.
Series 66 vs Series 7: Two Titans
After the SIE exam, the next step is usually the Series 7 Exam, which dives deeper into virtually every topic covered in the SIE Exam.
Series 7 Exam
- More Challenging than SIE: Almost everyone finds the Series 7 exam harder than the SIE. It consists of 125 questions (or 135 if you include experimental ones).
- Extensive Content: This exam covers a wide range of topics in detail, making it a significant challenge.
However, passing the Series 7 Exam doesn’t mean the journey is over.
Series 66 Exam
- Next Challenge: After the Series 7, most people take the Series 66 Exam, often thinking the hardest part is behind them. However, the Series 66 is another significant challenge.
- Common Struggles: Many students come to us after failing their first attempt. The Series 66 combines law and analytical questions, making it difficult.
- Law Section: Requires understanding and interpreting complex legal scenarios, not just rote memorization.
- Analytical Section: While some memory tricks can help, topics like net present value (NPV), internal rate of return (IRR), and the Rule of 72 can be tricky.
Key Points
- Series 7:
- 125 (or 135) questions
- Deeper coverage of SIE topics
- Heavy on options and other detailed content
- Series 66:
- Mix of law and analytical questions
- Challenges with interpreting legal scenarios
- Tricky topics like NPV, IRR, and the Rule of 72
Both exams are tough in their own ways, but with the right preparation and study strategies, you can conquer them.
So Which is Harder?
Determining which exam is harder is tough, but based on our experience, the Series 66 exam tends to give students more trouble than the Series 7. Here's why:
Series 7 Exam
- Easier with Hacks: Many students can pass the Series 7 using various study hacks like "Call up, put down," "Slobs and bliss," "EPIC," and "Pro golfers don't miss."
- Focus: This exam involves memorization and formulaic problem-solving, making it easier to navigate with specific strategies.
- Details:
- Purpose: Required for soliciting the purchase or sale of various securities.
- Restructuring: As of October 1, 2018, requires both the SIE exam and the Series 7 exam.
- Format: 125 multiple-choice questions.
- Duration: 3 hours, 45 minutes.
- Topics: Seeking business for broker-dealers, opening accounts, providing investment information, and processing transactions.
Series 66 Exam
- Complex Rules: The Series 66 requires memorization of specific rules and the ability to interpret a wide range of scenarios to determine which rules apply.
- No Shortcuts: Unlike the Series 7, this exam can't be easily navigated with simple hacks.
- Older vs. Newer Students:
- Older Students: Tend to perform better because they are more familiar with the rules and regulations due to industry experience.
- Newer Students: Often struggle due to a lack of understanding of laws and test fatigue from taking the Series 7.
- Details:
- Purpose: Required for investment advisors and soliciting the sale of securities within a state. Combines requirements of Series 63 and Series 65.
- Prerequisite: Series 7.
- Format: 100 multiple-choice questions.
- Duration: 2 hours, 30 minutes.
- Topics: Economic factors, investment vehicle characteristics, client investment recommendations, and laws, regulations, and guidelines.
Different Strokes for Different Folks
Some students excel at analytical sections of exams, while others are better at understanding laws and regulations. The Series 66 covers a lot of both.
Series 66 Exam
- Combination of Skills: It requires both analytical thinking and comprehension of laws and regulations.
- Industry Experience: For those with industry experience, some of the rules and regulations may be familiar. However, for newer students, learning these from scratch can be challenging.
Series 7 Exam
- Challenging in Its Own Right: While the Series 66 is tough, the Series 7 is also difficult and shouldn't be underestimated.
Success Tips
- Study Resource: Both exams can be conquered with the right amount of studying. We recommend using Kaplan, as it has proven to be the most successful resource for our students.
- Track Record: From our experience with hundreds of students each year, those who use Kaplan tend to perform the best on these exams.
In summary, while both the Series 66 and Series 7 are challenging, thorough preparation using Kaplan's materials can significantly increase your chances of success.
What are Some Other Differences?
Both the Series 7 and Series 66 exams have extensive content, each with its own unique challenges.
Series 7 Exam
- Options Content: The Series 7 has a lot of content on Options.
- Memorization and Mechanical Problem-Solving: This exam involves a significant amount of memorization, particularly for mechanical problem-solving. For instance, knowing the steps to solve "Options Spreads" problems can help you answer many questions correctly.
- Example Resource: There are helpful Series 7 Video Courses available for study.
Series 66 Exam
- Rules and Regulations: The Series 66 focuses more on rules and regulations, including many exceptions to these rules.
- Scenario-Dependent Questions: It includes more scenario-based questions. For example, a registered representative may be restricted from soliciting the sale of an unregistered non-exempt security but can sell it if the sale is unsolicited.
Unique Challenges
- Series 7: Involves a lot of memorization and mechanical problem-solving.
- Series 66: Requires understanding nuanced rules and regulations and applying them to various scenarios.
Different Experiences
Each person’s experience with the exams can vary. Some may find the mechanical nature of the Series 7 easier, while others may struggle with the regulatory focus of the Series 66.
In short, both exams are comprehensive and can be confusing, but they each test different skills and knowledge areas.
Analytical vs Mechanically (and Mathematically) Minded
At Professional Exam Tutoring, we've noticed that students who are comfortable with mechanical or mathematical questions generally find the Series 7 Exam easier.
Series 7 Exam
- Easier for Math-Oriented Students: Topics like Options, Convertible Bonds, Margin, and Fundamental Analysis require a formulaic approach. If you’re good with math, you’ll likely do well in these areas.
Series 66 Exam
- Challenges with Fluid Rules: In contrast, the Series 66 Exam focuses heavily on state laws and regulations, making up about 50% of the exam. Students often struggle with the exceptions to these rules.
- Difficulty with Exceptions: Unlike the Series 7, where simple formulas and memory tricks can help, the Series 66 requires a deeper understanding of nuanced rules and scenarios. This makes it more challenging for those who are used to straightforward, formula-based questions.
Overall, while the Series 7 is more math-oriented, the Series 66 demands a strong grasp of regulatory details and exceptions, posing a unique challenge for many students.
What is Required To Take The Series 66?
If you work at a broker-dealer and are on track to becoming an investment adviser representative, the Series 66 exam may be for you. It lasts 2.5 hours and has 100 questions, compared to the 125 questions of the Series 7 exam, so it's still a significant commitment.
The Series 66 exam qualifies you to represent both a broker-dealer and an investment adviser. Many broker-dealers also have investment advisory businesses, and this exam ensures you're prepared for client-facing duties. There are continuing education requirements for the Series 66 exam, similar to other FINRA and NASAA exams.
Most continuing education exams are not difficult. They often involve ethical scenarios that you need to interpret, and they cannot be studied for in advance. Many students get nervous, but these exams are typically straightforward.
It's also important to know that the SIE and Series 7 exams are co-requisites for the Series 66 exam. This means you can take them in any order. To book your exam, you can sign up and enroll through FINRA’s website or call them directly.
What Study Strategy Works for Each?
When it comes to studying for both exams, using Kaplan's question bank is highly effective. Here's a strategy that works well for students of all backgrounds:
- Identify Weak Areas: Spend several days working on practice questions from specific areas that you find difficult.
- Full Practice Exams: Follow up with a full practice exam to test your knowledge comprehensively.
Sample Study Schedule
Monday:
- Complete 75 practice questions, focusing on 15-question sets from heavily weighted subsections where your scores are low (e.g., the options section for the Series 7 exam, and exempt securities or transactions for the Series 66 exam).
Tuesday:
- Another set of 75 practice questions.
Wednesday:
- Another set of 75 practice questions.
Thursday:
- Take a full practice exam with at least 100 questions.
Repeat the Cycle
This approach helps fill in knowledge gaps and focuses your attention on troublesome areas. By seeing 15 questions in a row on difficult topics, you reinforce your understanding. This method also prepares you for seeing these questions in the context of a full exam.
Why Do People So Often Fail the Series 66 and Series 7?
For most registered representatives and investment adviser representatives, the Series 66 and Series 7 exams are the hardest required exams.
The Options section of the Series 7 exam is notoriously difficult, even though many people won’t use it in their careers. Understanding this section is necessary to pass the exam. However, you can still pass the Series 7 by excelling in other key areas such as municipal securities, new issues, margin, and investment companies.
On the Series 66 exam, most people struggle with understanding exemptions, like exempt securities and exempt transactions. This is a major part of the exam. Additionally, you need to know about the rules, regulations, and functions of investment advisers, broker-dealers, and agents. About half of the exam focuses on these topics.
While you don’t need to master smaller sections like net present value (NPV), Rule of 72, or IRR, having a good grasp on the Uniform Securities Act exemptions is crucial. Students who fail often have a basic understanding of general rules but lack detailed knowledge of specific situations, which can make a difference between passing and failing.
We recommend focusing your study on the sections most likely to appear on the exam. Kaplan’s QBank can guide you by showing which sections are weighted most heavily with practice questions.
Yes, But Is There a Difference in Passing Rates?
You might wonder about the passing rates for these exams. Unfortunately, neither FINRA nor NASAA publishes these rates. General statistics can be somewhat helpful, but they don’t apply to every individual. For example, an MBA graduate from a top school and a recent community college graduate can both pass the exam. The MBA graduate might fail due to lack of study time, while the community college graduate might pass on their first try after being given ample study time.
Knowing that, say, 60% of first-time test-takers pass isn’t very useful because each student’s situation is unique. You'll need to assess your own likelihood of passing based on your circ*mstances.
Anecdotally, we see similar passing rates for both the Series 7 and Series 66 exams. While both are harder than FINRA's SIE Exam, if you can pass the Series 7, you should find the Series 66 doable as well.
If you have any more questions, feel free to reach out! Good luck!
Frequently Asked Questions (FAQ)
Why did I have more trouble with the Series 66 Exam, even without a complex Options section?
The Series 66 exam is different from the Series 7 exam in that it focuses more on case studies and understanding laws and regulations. There's less math, but understanding the nuances between similar scenarios can be tricky. Many students struggle with this aspect. To improve, practice as many different scenarios as possible.
I'm passing my practice exams. Is that enough to take the Series 66 or Series 7 Exam?
Maybe. While some students pass the real exam without ever passing a practice exam, this is rare. To increase your chances, aim to score at least 85% on two full practice exams. Anything less can be risky. Passing a practice exam is not a guarantee of passing the real one.
I always get down to 50/50 and get the answer wrong. How do I fix that?
The only solution is more studying. If you can narrow it down to two options, that's good, but ideally, you should be able to pick the correct one. This likely means you don't fully understand the concept, so additional study is needed.
Can I pass the Series 66 Exam if I can pass the Series 7?
Yes, generally speaking. Students who pass the Series 7 are usually capable of passing the Series 66. While the exams are different, there is some overlap. Persistence and determination are key. If you're stuck at a certain score, more studying is often the solution.
Do I need to know math and formulas for the Series 66 exam?
Yes and no. You may need to know formulas, but there’s minimal math involved. For example, you might need to understand how to calculate present value, but you likely won’t need to perform the calculation. Understanding the relationships within the formulas is more important.
How do I know where to focus for the Series 66 and Series 7 Exams?
We recommend using Kaplan's study materials. Kaplan’s question bank weights practice questions according to what is likely to show up on the exam. For the Series 7, focus on heavily weighted sections like Options and Municipal Securities. For the Series 66, focus on exempt securities, exempt transactions, and ethics. Use Kaplan as your guide to prioritize your studying. If your scores are low in these important areas, increase your effort.
Are you ready to ace the Series 7 and Series 66 exams? Professional Exam Tutoring is here to guide you every step of the way!
Contact us today at (646) 797-3028 and unlock your potential for success. Our expert tutors and tailored study plans will help you master the material and boost your confidence.
Don’t wait—call now and take the first step towards passing your exams with flying colors! Your future in the financial industry starts here.
