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.
What is CFA?
CFA (Chartered Financial Analyst) certification is considered the ‘gold standard’ of investment management and financial analysis, designed to validate 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.
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CFA Certification vs. Series 7 License Infographics
Let’s see the top differences between CFA certification vs. Series 7 License along with infographics.
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
| Section | CFA | Series 7 |
|---|---|---|
| Certification Organized By | CFA is organized by CFA Institute | Series 7 Exam is organized by FINRA |
| Number of Levels | CFA: CFA has 3 exam levels, each of them split into two exam sessions (morning and afternoon sessions) CFA Part I: Morning session: 120 multiple choice questions Afternoon session: 120 multiple choice questions CFA Part II: Morning session: 10 item set questions Afternoon session: 10 item set questions CFA Part III: Morning session: Constructed response (essay) questions (usually between 8-12 questions) with a maximum of 180 points. Afternoon session: 10 item set questions | It is a single exam administered in two sessions with 250 Multiple choice questions, plus 10 ‘pre-test’ questions (total 260 questions). Candidates have to attempt 130 questions in each of the exam sessions. |
| Mode/duration of examination | CFA: Across CFA Part I, II, III levels, there are morning and afternoon sessions of 3 hours each. | It is a single exam administered in two sessions of 3 hour duration each (total duration of 6 hours). |
| Exam Window | CFA Part I, II & III level exams are conducted on the first Saturday of June every year, Part I exam can also be taken in December | It can be scheduled for any weekday within a 120-day window on enrolling for the exam with FINRA. |
| Subjects | CFA content curriculum consists of 10 modules with increasing level of difficulty from CFA Part I exam to Part II & Part III exam respectively. These 10 modules consist of: *Ethics and Professional Standards *Quantitative Methods *Economics *Financial Reporting and Analysis *Corporate Finance *Portfolio Management *Equity Investments *Fixed Income *Derivatives *Alternative Investments | Series 7 exam covers relevant knowledge areas related to the five primary functions of General Securities Representative. These include: Function 1: Seeks business for the broker-dealer through customers and potential customers Function 2: Evaluates customers’ other security holdings, financial situation and needs, financial status, tax status and investment objective Function 3: Opens accounts, transfers assets and maintains appropriate account records Function 4: Provides customers with information on investments and makes suitable recommendations Function 5: Obtains and verifies customers’ purchases and sales instructions, enters orders and follows up |
| Pass percentage | CFA 2016 you need CFA Level 1 43%, CFA level 2 46% and for CFA level 3 54% | The average passing rate for Series 7 exam is greater than 70% |
| Fees | CFA fee is approximately $650 - $1380 including registration and examination. | Series 7 Exam: $305 February 2017. |
| Job opportunities/job titles | It is an advanced credential in financial analysis which can help develop expert capabilities for portfolio management, equity research and other complex knowledge areas in finance. It is suited for professionals looking to refine their knowledge and skills and enhance career prospects in the global arena. Some of the relevant job roles include: Investment Bankers Portfolio Managers Equity Research Analysts | On successful completion of Series 7 exam, which is an entry-level examination, an individual is qualified to register with any self-regulatory organization to trade in pre-specified categories of general securities including corporate stocks and bonds, real estate investment trusts (REITs), municipal securities, options-equity, index and foreign currency, investment company products or variable contracts, direct participation programs and exchange-traded funds (ETFs) along with several other instruments.There is no additional career scope for an individual based on Series 7 license except to work in the capacity of FINRA authorized General Securities Representative. |
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 funds, 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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