New entry-level securities exam seen to benefit firms, job seekers

Securities Industry Essentials general knowledge tests begin Oct. 1, but there's still little awareness among the public about the opportunity

Jun 26, 2018 @ 2:00 pm

By Mark Schoeff Jr.

A new entry-level exam for people who aspire to work in the securities industry should become popular because it will appeal to both job seekers and financial firms, according to training experts.

Starting Oct. 1, the Financial Industry Regulatory Authority Inc. will offer the Securities Industry Essentials exam, which is designed to test knowledge of basic products, the structure of the industry and regulatory agencies.

Everyone seeking to become a registered representative would have to pass the SIE and then take a so-called "top-off" exam, such as the Series 6 or Series 7, in order to qualify to sell securities.

They would be registered for the top-off exams by the firms that hire them. But anyone can sit for the SIE, giving advantages to the test taker as well as their potential employers.

The SIE is a test-drive that will provide insights about applicants for financial firms and give job candidates a way to stand out.

"It's a win-win for everybody," said Michael Roe, lecturer in financial planning at Purdue University and former broker with Morgan Stanley.

Firms can use the exam to screen candidates and avoid hiring those who might stumble on qualification exams after being hired, according to Brian Marks, managing director at Knopman Marks Financial Training.

Job candidates can "show enthusiasm and knowledge of the business and make their resume more attractive," he said. "I think it will be very popular."

The streamlined Finra exam structure will save firms time and money while bolstering their recruiting, said Doug Vincens, vice president of financial services for Kaplan Professional.

"It reduces the cost of training and registration," he said. "It essentially produces a pipeline of qualified candidates and it increases the speed to production."

Of course, this means the individual would now have to pay for the exam if it's taken before joining a firm.

But some brokerages also are likely to encourage their support personnel to take the SIE so they better understand the industry.

"Some firms look at it as a methodology to further the education of the staff," said Todd Rosenfeld, chief operating officer at Securities Training Corp. "It's a pathway to better careers in the financial services industry."

Although financial firms are gearing up for the changes ahead for qualification exams, there is little awareness of the SIE among the public, Mr. Rosenfeld said.

Perhaps the most relevant public audience is college students who are studying financial planning and other business fields. Purdue will begin offering a one-credit-hour course on the SIE exam in January.

"Our objective is to get our students prepared to sit for and pass the SIE while they are still at Purdue," said Mr. Roe, who is also program director for certified financial planner programs at the school.

Over the next few months, everyone will start becoming familiar with the new world ahead for industry exams.

"This is a major, major change," Mr. Marks said. "It's going to be exciting."


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