The Best Way to Study for the Series 7 Exam - dummies

By Steven M. Rice

When deciding how to go about your Series 7 exam prepartion, your first mission is to identify the training mode that best suits your needs. If you’re likely to benefit from a structured environment, you may be better off in a classroom setting. A prep course can also give you emotional guidance and support from your instructors and others in your class who are forging through this stressful ordeal with you.

On the other hand, if you’re the type of person who can initiate and follow a committed study schedule on your own every day, you may be able to pass the Series 7 exam without a prep course, and you can save the money you would have spent for classes.

Back to school: Attending a Series 7 exam prep course

People who learn best by listening to an instructor and interacting with other students benefit from attending prep courses. Unfortunately, not all Series 7 exam prep courses and training materials are created equally. Unlike high school or college courses, the content of Series 7 prep courses and the qualifications of the instructors who teach them aren’t regulated by your state’s Department of Education, the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), or any other government agency. Do some research to locate the Series 7 training course that works best for you.

The following sections explain some things to consider and questions to ask before enrolling. Take a look at the info you gather and trust your gut. Is the primary function of the prep course to train students to be successful on the Series 7 exam, as it should be? Or do you suspect it’s the brainchild of a broker-dealer who’s looking for extra revenue to supplement her failing stockbroker business? (Run away!)

Training school background

To find information about a program you’re considering, browse the training school’s website or contact the school’s offices. Find out how many years the training school has been in business and check with the Better Business Bureau or the Department of Consumer Affairs to see whether anyone has filed any complaints. Look for a school that has stayed in business at least five years. This staying power is generally a sign that the school is getting referral business from students who took the course and passed the Series 7.

Try to get recommendations from others who took the course. Word of mouth is an essential source of referrals for most businesses, and stockbroker training schools are no different. The stockbroker firm you’re affiliated with (or will be affiliated with) should be able to recommend training schools.

Courses offered through a local high school’s continuing education program can be just as effective as those offered through an accredited university or a company that focuses solely on test prep, as long as the right instructors are teaching them. Read on.

Qualifications of the course instructor(s)

The instructor’s qualifications and teaching style are even more important than the history of the company running the course (see the preceding section). An instructor should be not only knowledgeable but also energetic and entertaining enough to keep you awake during the not-so-exciting (all right, boring) parts.

When looking for a course, find out whether the teacher has taken — and passed — the Series 7 exam. If so, the instructor probably knows the kinds of questions you’ll be asked and can help you focus on the relevant exam material. The instructor is also likely to have developed good test-taking skills that she can share with her students.

Whether the instructor is a part-timer or full-timer may be important. For example, a full-time instructor who teaches 30 classes a year probably has a better grasp on the material than a part-time instructor who teaches 4 classes a year. By the same token, an instructor who owns the school that offers the course probably has greater interest in the success of the students than someone who’s paid to teach the class by the hour. Use your best judgment.

Before you register, ask whether you can monitor a class for an hour or so with the instructor who would be training you. If the company says no, I suggest finding another course because that course provider may have something to hide. While you’re at it, make sure the classroom is comfortable, clean, and conducive to learning.

Texts, course content, and extra help

To really benefit from a course, you need good resources — in terms of not only the actual training material but also the people in the classroom. These elements affect how the class shapes up and what you actually learn:

  • Training material: Will you have a textbook to study from or just some handouts? The instructor should provide you with textbooks that include sample exams, and a prep course should be loaded with in-class questions for you to work on. The course should also provide you with chapter exams that you can work on at night before the next session (yes, homework is a good thing). Remember, the more questions you see and answer, the better.
  • In-class practice tests: You want a prep course that includes test sessions where the instructor grades your exams, identifies incorrect answers, and reviews the correct answers.
  • Instructor availability: Ask whether the course instructors will be available to answer your questions after the class is over — not only at the end of the day but also during the weeks after you’ve completed the course and are preparing for the Series 7.

The practical details

The perfect course can’t do you any good if you never show up for class. Here are some issues to consider about the course offering:

  • Days and times: Make sure the class fits your schedule. If getting there on time is too stressful or you can’t attend often enough to justify the expense, you won’t benefit from registering to take the course.
  • Class size: If more than 30 to 35 people are in the class, the instructor may not be able to give you the individual attention you need.
  • Cost: Obviously, cost is a major concern, but it definitely shouldn’t be your only consideration. Choosing a course because it’s the least expensive one you can find may be a costly mistake if the course doesn’t properly prepare you. You end up wasting your time and spending more money to retake the exam. You can expect to pay anywhere from $300 to $600 for a standard Series 7 prep course, including training materials (textbooks and final exams).

Quite a few people don’t pass the first time around, so find out whether the school charges a fee for retaking the prep course if you don’t pass the Series 7 exam or even if you feel that you’re not quite ready to take the test.

How to select prep material to study on your own

If you’re the type of person who can follow a committed study schedule on your own every day, you may be able to pass the Series 7 exam without a prep course. Many different types of study aids are available to help you prepare.

No matter what your learning style is, I’m a firm believer in using a textbook as a primary training aid. You can use online courses, online testing programs, CDs, apps, and flash cards as supplements to your textbook, but give your textbook the starring role. By virtue of its portability and ease of use (you don’t have to turn it on, plug it in, or have access to the Internet, and it can never, ever run out of batteries), the textbook is simply the most efficient and effective choice.

My personal favorites are the Empire Stockbroker Training Institute’s Series 7 Coursebook and its companion, Series 7 Final Exams. The textbook focuses on the relevant exam topics, is easy to read and understand, and includes plenty of practice questions and detailed explanations. Securities Training Corporation and Kaplan Financial also publish quality Series 7 books. A lot of the better Series 7 course textbooks are available online rather than in bookstores.

In addition to Series 7 Exam For Dummies and a textbook, consider investing in one or more of the following popular study aids:

  • Online testing: I’m all for online testing. Certainly, the more exams you take, the better. If the practice exam simulates the real test, it’s even more valuable. With this study aid, you have access 24 hours a day, 7 days a week, and can pace yourself to take the exams at your leisure. Select a program (for example, Empire Stockbroker Training Institute always has the most current, updated simulated exams) with a couple thousand questions or more, along with answers and explanations.
  • Audio CDs: You may still be able to find audio CDs or audio courses to help you prepare for the Series 7. This form of training can be beneficial as a review for people who already have a decent understanding of the course material. You can listen to recorded material while on the go or in your home.

Personally, recording your own notes — especially on topics you’re having trouble with — might be a better use of your time. Putting the info in your own words, saying ideas out loud, and listening to the recordings can really help reinforce the concepts.

  • Flash cards: For those who already have a grasp on the subject matter, flash cards are good because you can tuck ’em in your pocket and look at ’em anytime you want. Commercial cards may be confusing and long-winded. You’re better off making cards that focus on the areas that are most problematic for you.