Who Benefits from the SIE Examination?
The Securities Industry Essentials (SIE) exam presents an opportunity for anyone with a desire to work in the financial services industry to sit for an exam. This new test, released on October 1, 2018, is the result of the Financial Industry Regulatory Authority (FINRA) reorganization. The test costs $60 and assesses a candidate’s industry knowledge and level of competence in fundamental securities topics and prohibited practices.
People who score well on the test have a chance to stand out from the pack as employers can use the exam to screen candidates. After being hired, new employees must take a top-off exam for their particular niche to help hone skills that will serve them best and register with a FINRA member firm. Individuals who pass the exam must also be associated with a FINRA member firm in order to take the qualification exam necessary to engage in the securities business.
As a lighter version of the Series 7, the SIE provides test takers with a better chance of achieving a passing score and lowers the stakes by also providing a more economical first step. Test takers have one hour and 45 minutes to complete this 75-question exam. Unlike its predecessors, anyone over 18 years of age can sit for this exam, regardless of whether they are sponsored by a broker or dealer. Individuals who are already registered as a representative do not need to take the exam.
The exam covers four basic topics:
- Understanding of capital markets.
- Knowledge of products and their risks.
- Knowledge of trading, customer accounts and prohibited activities.
- Understanding of the regulatory framework.
This exam provides test takers with a comprehensive assessment of their basic skills and an understanding of the financial securities industry. A passing score for the SIE is 70 (out of 100). Test takers who fail will have to wait 30 days after their first and second attempt, and a full 180 days if they fail a third time. The SIE exam is valid for four years from the date of completion.
As previously mentioned, those who are not currently sponsored in the industry can take the SIE exam as a way to stand out against competitors and get a leg up on the path toward a career in the financial industry.
Although passing the SIE exam does not qualify individuals to begin engaging in the securities business, it offers applicants a step in the right direction. To work in the securities business, applicants must also pass a qualification exam for the type of business they are pursuing, which will require sponsorship from the FINRA member firm they are associated with.
For those aspiring to enter the financial services industry, the SIE exam can help applicants demonstrate their sincere interest in the business, and pad their resume with a notable accomplishment. Whether applicants are newly entering the job market, looking for a career change, or freshening up their skills, the SIE exam helps provide applicants with a solid foundation.
Those who are returning to the securities industry after a hiatus of more than four years will need to take not just the SIE exam, but the qualification exam appropriate for their specialized business sector as well.
Prospective employers can use the SIE to screen candidates and separate applicants who have demonstrated that they have a vested interest in the securities business. Screening candidates can be a time-consuming process. By initially screening for applicants who have passed the SIE exam, prospective employers get a fast pass to better-qualified candidates. It also ensures that applicants come to the table with a solid grasp of the general knowledge of the industry. Because it’s a competitive career, it is important for prospective employers to know upfront that their applicants are invested, capable and committed.
Furthermore, the SIE exam identifies applicants who have a higher chance of successfully passing additional qualification exams. It also helps companies focus their training regimen on gaps in specific skills above and beyond what is addressed in the SIE exam. This helps companies invest their training dollars on specialized competencies instead of basic industry knowledge.
The benefits of the SIE Exam are limitless. The SIE benefits test takers and job applicants by providing a cheaper, trimmer financial securities exam. Without the need to gain sponsorship from a FINRA member firm, it lowers the barrier to entry into the financial securities industry. The exam also helps prospective employers in their search for committed applicants who have a solid grasp of the building blocks of the industry.