CFA vs Series 7

Difference Between CFA and Series 7

CFA or Chartered Financial Analyst is offered by CFA Institute and the course offers opportunities in portfolio management, risk management, consultant, chief executive, etc whereas Series 7 is offered by FINRA and with the completion of this course an individual will be eligible for being registered with self-regulatory organization for successfully trading in general securities that includes bonds and corporate stocks.

In this comparative article, we will discuss the CFA exam, an important financial credential, and Series 7 license, a prerequisite laid down by FINRA for those engaged in trading of securities. This should help those contending these two qualifications to make an informed choice regarding their eligibility and preferences.

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What is CFA?

CFA (Chartered Financial Analyst) certification is considered the ‘gold standardGold StandardThe gold standard was a monetary term used when gold exchange was used instead of paper currency.read more’ of investment management and financial analysis, designed to validate the expert knowledge and capabilities of professionals in these and related fields. Offered by CFA Institute, USA, this is undoubtedly one of the most reputed certification programs in finance that help professionals acquire advanced capabilities in highly specialized knowledge areas, including portfolio management, financial analysis, and financial advisory, among other areas.

It has one of the lowest passing rates among financial credentials, making it one of the most difficult to acquire, and one of the most sought-after in the financial industry.

What is a Series 7 License?

It should be clearly understood at the very outset that Series 7 is a license, unlike CFA, which stands for a certification. The scope and contents of the Series 7 exam are much more limited than CFA. They are specifically aimed at helping those engaged in the sale and purchase of financial products acquire the necessary knowledge and skills for the job.

To sit for the Series 7 exam, an individual must be sponsored by a FINRA member firm and a prerequisite to appear for several other FINRA exams. Acquiring a Series 7 license is nowhere as difficult as earning CFA Charter, with the latter representing much-advanced knowledge and capabilities in the financial domain.

CFA Certification vs. Series 7 License Infographics

Let’s see the top differences between CFA certification vs. Series 7 License along with infographics.

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Exam Requirements

CFA Exam Requirements

To qualify for CFA, a candidate should have a Bachelor’s Degree (or they should be in the final year of Bachelor’s Degree) or 4 years of professional work experience or 4 years of higher education and professional work experience taken together.

Series 7 Exam Requirements

One should have the sponsorship of a firm with FINRA membership. That is the only prerequisite for this exam.

CFA vs. Series 7 Comparative Table

SectionCFASeries 7
Organizing BodyThe organizing body for the CFA exam is the CFA Institute, USA.The organizing body for the Series 7 exam, which is officially known as the General Securities Representative Qualification exam, is the Financial Industry Regulatory Authority (FINRA), USA.
PatternThe course of CFA qualification is divided into three sequential levels – Level I, Level II, and Level III.The course of Series 7 license consists of a 3 hours 45 minutes exam to appeared in a single day.
Duration of CourseThe candidates who are able to pass each exam in the first attempt can complete the course in a span of 36-48 months.The course requires 100-120 hours of study, which spread across 1-4 weeks. However, candidates’ inability to clear the exam in the 1st attempt can stretch the course duration as the candidates have to wait for 30 days for the 2nd attempt and another
SyllabusThe syllabus primarily covers the following topics

  • Ethics & Professional Standards
  • Economics
  • Corporate Finance
  • Portfolio Management
  • Quantitative Methods
  • Fixed Income
  • Alternative Investments
  • Equity Investments
  • Derivatives
  • Financial Reporting and Analysis

 

 

 

The syllabus primarily focuses on the following functions

  • Seeking business existing & potential customers
  • Account opening after obtaining & evaluating customers’ financial profile & investment objectives
  • Providing investment-related information to customers, making recommendations, transferring assets & maintaining appropriate records
  • Obtaining & verifying customers’ purchase & sales instructions & agreements
  • Processing, completing, and confirming transactions
Exam FeesThe total cost of the course falls in the range between $2,550 and $3,450, which includes exam fees and an enrollment fee. The exam fees vary based on the time of registration.The exam fees for the license is $245. However, the license also requires sponsorship from a FINRA-member firm.
JobsSome of the common profiles include

  • Strategic Analyst
  • Wealth Manager
  • Portfolio Manager
  • Investment Analyst
  • Financial Consultant
Some of the common profiles include

  • Financial Advisor
  • Registered Client Service Associate
  • Financial Planner
  • Registered Client Associate
DifficultyThe exams are very difficult. The pass rates for the exams conducted in June 2019 were

  • Level I: 41%
  • Level II: 44%
  • Level III: 56% [Source: CFA Institute]
The exams are fairly difficult. Although FINRA doesn’t publish the pass rates for the Series 7 exams, it is generally believed that the pass rate is around 65%.

 

 

Exam DateThe schedule of the upcoming exams for the year 2021 is as follows

  • Level I: Feb 16-Mar 01, May 18-24, Aug 24-30 & Nov 16-22
  • Level II: May 25-Jun 01 & Aug 31-Sep 04
  • Level III: May 25-Jun 01 & Nov 23-25
The candidates can schedule the exam on any weekday within 120 days from the enrolment date.

Why Pursue CFA?  

Earning CFA Charter validates that a professional can undertake complex roles in various sub-domains of finance, ranging from financial analysis and investment management to investment banking, research, and academics, among other areas.

Career enhancement is substantial as CFAs can explore several global opportunities in finance, and this hard-earned credential can lend them greater credibility in the eyes of prospective employers as well. Non-finance professionals can also have several potential advantages as a professional if they go ahead to earn CFA Charter.

Why Acquire Series 7 License?

Series 7 license does not offer any unique advantage except to serve as a prerequisite to serving as a General Securities Representative in keeping with the requirements laid down by FINRA (Financial Industry Regulatory Authority).

This qualifies them to engage in the sale, purchase, and or solicitation of securities products, including stocks, bonds, mutual fundsMutual FundsA mutual fund is an investment fund that investors professionally manage by pooling money from multiple investors to initiate investment in securities individually held to provide greater diversification, long term gains and lower level of risks.read more, and other forms of instruments. There is no additional career scope for those who acquire a Series 7 license except to work within these pre-specified roles.

Conclusion

There can be no comparison between the CFA and the Series 7 exam since they do not even represent a certification program. CFA is an advanced multi-tier certification program considered one of the most stringent financial credentials to earn. Series 7 license simply qualifies an individual to trade general securities on behalf of any self-regulatory organization.

CFA is intended for professionals planning to advance their careers and showcase their knowledge and capabilities by acquiring a specialized credential in finance. In contrast, the Series 7 exam is only meant for individuals seeking licensure from FINRA to operate as general securities representatives, trading for securities in the market.

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This has been a guide to CFA vs. Series 7. Here we discuss the difference between CFA and Series 7 along with the infographics and comparative table. You may also have a look at the following articles –

Reader Interactions

Comments

  1. Elias Braker says

    Great one!! thanks for providing insights to CFA and series 7.

  2. Erick Vesey says

    Very well explained about CFA and Series 7. I had knowledge on CFA but going this article I have also gained some important knowledge on Series 7 thanks for making it clear to me.

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