When I first started my job in investment banking, I knew the first month or so would be training before I actually hit the desk and started working with my team. What many young professionals don’t take into account are the SIE or Series exams that you are required to take to become certified as an investment banker. For many people, these exams are taken right before you start your full-time job, though they can be taken at any point in your career if you are pivoting to investment banking later than post-college.
What are the SIE and Series exams?
The SIE, or Securities Industry Essentials exam, is a comprehensive introductory exam created and administered by the Financial Industry Regulatory Authority (FINRA) in the US. The SIE was first introduced in 2018 as a mandatory exam for people seeking to be employed in the securities industry.
The Series exams refer to a variety of licensing exams that are commonly associated with investment banking and related fields. These exams are taken by professionals to demonstrate their knowledge and competency in various areas of finance and certify to the institution’s clients that their employees have the necessary skills to handle their needs. Some of the most well-known Series exams are the Series 79 (Investment Banking Representative Qualification Exam), Series 63 (Uniform Securities Agent State Law Exam), Series 7 (General Securities Representative Exam), and many others with different content on each test.
Note that these tests are different from other ones you may have heard about like the Chartered Financial Analyst (CFA) exams, which are offered by the CFA Institute.
Where can I learn more about these exams?
The organization that administers these tests, FINRA, has a lot of information on its website about what the different exams are, what they each cover, and what you can do with each certification once you pass. The qualification exams section (https://www.finra.org/registration-exams-ce/qualification-exams) gives the full list of tests offered (in addition to the ones mentioned above).
How should I balance preparation with investment banking training?
Many firms include study time for the SIE and Series exams during full-time investment banking training. When I was in training, we did full-time training for 6 weeks and were then given two weeks to take both the SIE and Series 79. My firm structured it such that we took a week-long, all-day course with Knopman Marks, a popular test prep provider, to prepare for each test. After the first week, I took my SIE at an exam center in the center, and after the second week, I took the Series 79.
During those two weeks, the preparation was intense given how time crunched it was to prepare enough to pass the tests. If you don’t have an undergraduate background in finance or don’t like cramming for tests, I would recommend starting earlier than this to study for the exams. Many firms provide textbooks and workbooks for the earlier end of the summer so that you can start looking at them before official investment banking training starts. While the idea of studying for qualifying exams might not sound like the most fun during the summer, you don’t want to be in the position of not having passed the exams right before you are supposed to hit the desk in the fall. Not passing will prevent you from starting work at some firms, and at other firms, you may be able to hit the desk but won’t be able to work on certain transaction types without your certifications.
How can I best prepare?
1. Start early
My biggest piece of advice would be to start preparation as early as possible. For many college seniors who have already accepted offers earlier in the year, senior spring is a good time to think about these exams. Even starting early by familiarizing yourself with what tests you will be required to take (as it can vary by bank and by group, even within investment banking) and the format/content of such tests puts you ahead of many people coming into investment banking without having thought much about these exams.
2. Gather materials and resources
Depending on your bank and training program, you may or may not be given materials beforehand to study. You also may be given access to a test preparation service like Knopman Marks or others. Try to determine what you will gain access to and when by speaking to your future staffer or full-time analysts you met during the internship. They will be able to point you in the right direction if you want to prepare a bit early. FINRA also has free resources on their website that could be a good starting point for your studying.
3. Create a study plan
Creating a study plan is an important piece given passing these tests is important to starting your full-time job. Develop a study plan that includes specific goals of what content you want to cover and when and break down all of the topics on each test into manageable chunks. Be realistic with your time allocation – if you are able to start early, don’t overdo studying for multiple hours a day, but if you’re cramming the week before the test, that will be more of an all-day studying type of plan.
4. Identify your weak points
Since you will likely have a limited amount of time to prepare, identifying your weak points to work on will be key. Similar to standardized test preparation, spending more time building up your weaknesses while still refreshing your strong points is generally a good way to go about learning as much as possible in an efficient manner.
5. Study to pass
You aren’t graded with a score on the SIE and Series exams; rather you will walk out of the test center with a Pass or Fail immediately after taking the computer test. Since you just have to pass the test, focus on building up skills in as many areas as possible, but don’t feel that you have to be an expert in everything on the test. If you can really nail valuation questions but struggle with regulatory questions, make sure you can get all the valuation questions right to maximize your points there. Remember, the majority of people who put in the time and effort end up passing on the first try; armed with this knowledge, you will be able to, too!
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