Introduction to the Series 28 Exam
In the highly regulated world of financial services, the role of a Financial and Operations Principal (FINOP) is critical for ensuring that a firm maintains its fiscal integrity and adheres to strict government standards. The Series 28 exam, formally known as the Introducing Broker-Dealer Financial and Operations Principal Qualification Examination, is the gateway for professionals seeking this specialized designation within introducing broker-dealers. Unlike general securities licenses, the Series 28 focuses heavily on the “back-office” mechanics of a firm—accounting, financial reporting, and capital requirements.
The significance of this exam cannot be overstated. A FINOP is responsible for the accuracy of a firm’s financial statements and its compliance with the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) financial responsibility rules. Our team at Fraser Exam has compiled the most effective strategies to help you navigate the nuances of this challenging qualification, ensuring you understand not just the “how” but the “why” behind these complex regulations.
Whether you are a seasoned accountant moving into the securities industry or a compliance officer looking to expand your oversight capabilities, passing the Series 28 is a major career milestone. This guide provides a deep dive into everything you need to know, from eligibility and exam format to study strategies and career outcomes.
Section 1: The Basics & Eligibility
The Series 28 exam is designed to assess the competency of an entry-level Financial and Operations Principal specifically for introducing broker-dealers. An introducing broker-dealer is a firm that does not hold customer funds or securities but instead “introduces” its customers’ accounts to a clearing firm that handles the actual execution and settlement of trades.
Who is it for?
The exam is intended for individuals who will be responsible for the firm’s financial and operational management. This includes the preparation and filing of financial reports, the supervision of individuals who assist in these duties, and the overall responsibility for the firm’s compliance with financial responsibility rules. It is specifically tailored for firms that do not carry customer accounts and do not hold customer funds or securities.
Prerequisites and Eligibility
To sit for the Series 28 exam, a candidate must be sponsored by a FINRA member firm. You cannot register for this exam as an independent individual. Additionally, while the Series 28 itself is a principal-level qualification, candidates must generally have passed the Securities Industry Essentials (SIE) exam. Depending on the specific role and firm requirements, candidates may also be required to hold a corequisite registration, such as the Series 6 or Series 7, though the Series 28 serves as its own qualifying registration for FINOP duties at an introducing firm.
| Exam Detail | Information |
|---|---|
| Administering Body | Financial Industry Regulatory Authority (FINRA) |
| Exam Cost | $105 |
| Corequisite | SIE Exam |
| Sponsorship Required | Yes |
| Validity | Valid in the United States |
Age Limits and Retakes
There is no specific age limit for the exam, though most candidates are of legal working age for the financial industry. If a candidate fails the exam, FINRA imposes a waiting period before a retake is allowed. After the first or second failed attempt, there is a 30-day waiting period. If the exam is failed a third time, the candidate must wait 180 days before testing again.
International Validity
The Series 28 is a U.S.-specific certification based on SEC and FINRA rules. While the knowledge of financial operations is universally valuable, the certification itself is not recognized as a legal qualification for financial oversight in other jurisdictions like the UK or Hong Kong. However, many international firms with U.S. subsidiaries require their staff to hold this license to manage their American operations.
Section 2: Exam Format & Style
The Series 28 is a computer-based examination administered at Prometric testing centers. It is designed to test both knowledge of the rules and the ability to apply those rules to practical scenarios, particularly regarding mathematical calculations for net capital.
Structure of the Exam
The exam consists of 95 multiple-choice questions. In addition to these, there are 5 “pretest” questions that do not count toward your final score. These questions are randomly distributed throughout the exam, and you will not know which ones they are. These are used by FINRA to test the validity of new questions for future exams.
- Format: Multiple-choice (four options per question)
- Duration: 2 hours (120 minutes)
- Book Style: Closed-book (no outside materials allowed)
- Delivery: Computer-based at a testing center
Scoring and Negative Marking
The passing score for the Series 28 is 70%. This means you must correctly answer at least 67 of the 95 scored questions. There is no negative marking, meaning you are not penalized for incorrect guesses. It is always in your best interest to answer every question, even if you are unsure of the correct choice.
Exam Content Breakdown
The exam is divided into four major job functions. Understanding the weight of each section allows you to prioritize your study time effectively.
| Job Function | Description | Number of Questions |
|---|---|---|
| Function 1 | Financial Reporting | 18 |
| Function 2 | Operations, General SEC and FINRA Rules | 33 |
| Function 3 | Net Capital Requirements | 36 |
| Function 4 | Customer Protection and SIPC | 8 |
Section 3: Difficulty & Passing Rates
The Series 28 is widely considered one of the more technical exams offered by FINRA. While it has fewer questions than the Series 7 or Series 27, the density of the material—specifically the mathematical formulas and the interpretation of SEC Rule 15c3-1—makes it quite challenging.
Historical Passing Rates
FINRA does not publicly release official passing rates for its qualification exams. However, industry estimates suggest that the pass rate for the Series 28 is generally between 60% and 70% for first-time test-takers. The technical nature of the exam means that even candidates with accounting backgrounds can struggle if they do not study the specific regulatory nuances of the securities industry.
Challenging Sections
Candidates consistently report that Net Capital Requirements (Function 3) is the most difficult portion of the exam. This section requires you to calculate a firm’s “net capital” by taking its equity and subtracting “non-allowable assets” and “haircuts” (percentage deductions for market risk). Mistakes in these calculations are the primary reason candidates fail. Additionally, understanding the specific timelines for “Books and Records” (SEC Rules 17a-3 and 17a-4) requires significant memorization of retention periods.
Section 4: Preparation Strategy
Success on the Series 28 requires a disciplined approach that balances conceptual understanding with rote memorization and mathematical practice. Here at Fraser Exam, we recommend starting your preparation at least 8 to 10 weeks in advance to ensure you have enough time to digest the material.
Recommended Study Hours
Most candidates should aim for 60 to 80 hours of total study time. If you do not have a strong background in financial accounting or broker-dealer operations, you may need closer to 100 hours. This time should be split between reading the study manual, taking practice quizzes, and performing full-length simulated exams.
Self-Study vs. Prep Courses
While it is possible to self-study using the official FINRA Series 28 content outline, most candidates find that a structured prep course is essential. These courses often provide “cheat sheets” for net capital formulas and practice question banks that mimic the wording of the actual exam. At Fraser Exam, we believe that taking at least five full-length practice exams is the best way to build the “mental stamina” required for the two-hour testing window.
Study Timeline Example
| Timeline | Focus Area |
|---|---|
| Weeks 1-3 | Reading the primary study manual and taking notes on SEC/FINRA rules. |
| Weeks 4-6 | Deep dive into Net Capital calculations and Focus Report filings. |
| Weeks 7-8 | Taking practice quizzes for each section and identifying weak spots. |
| Final Week | Full-length simulated exams and memorizing retention periods/deadlines. |
Section 5: Career & ROI
Passing the Series 28 is more than just a regulatory requirement; it is a significant career booster for those in finance and compliance. It signals to employers that you possess the specialized knowledge to manage a firm’s financial health.
Job Roles and Opportunities
The most common role for a Series 28 holder is the Financial and Operations Principal (FINOP). However, the certification is also highly valued for:
- Chief Financial Officers (CFO) of introducing broker-dealers
- Senior Compliance Officers
- Operations Managers
- Regulatory Consultants
Salary Impact
While the certification itself doesn’t guarantee a specific salary, it is often a prerequisite for high-level management positions. Professionals in FINOP roles at mid-sized firms can expect salaries ranging from $120,000 to $180,000, depending on experience and the complexity of the firm. Holding the Series 28 can lead to a salary increase of 15-25% for those moving from staff accounting to principal-level roles.
Certification Maintenance
The Series 28 registration does not “expire” as long as you remain employed by a FINRA member firm. However, you must complete the Continuing Education (CE) requirements. This includes the Regulatory Element, which is an annual training requirement administered by FINRA. If you leave the industry for more than two years, your license will lapse, and you will likely need to retake the exam to re-register.
Section 6: Exam Day Logistics
Knowing what to expect on exam day can significantly reduce anxiety. The Series 28 is administered in a highly secure environment to ensure the integrity of the testing process.
Identification and Arrival
You must bring a valid, government-issued photo ID that matches the name on your registration. It is recommended to arrive at the testing center 30 minutes early. Late arrivals may be barred from the exam and will forfeit their testing fee.
Allowed Items
The testing room is strictly controlled. You are not allowed to bring calculators, phones, or scratch paper. The testing center will provide:
- An on-screen calculator or a physical basic calculator
- Dry-erase boards or scratch paper and a pen
- A locker to store your personal belongings
Receiving Results
The Series 28 is a computer-based exam, so you will receive your results immediately upon completion. You will see a “Pass” or “Fail” screen, and the proctor will provide you with a printed score report before you leave the center. This report will include a breakdown of your performance in each of the four job functions, which is particularly helpful if you need to retake the exam.
Comprehensive FAQ Section
Is online/remote proctoring available for the Series 28?
Yes, FINRA offers an online proctoring option for certain exams through Prometric’s ProProctor system. However, availability may vary based on your firm’s policies and specific technical requirements. Most candidates still prefer the controlled environment of a physical testing center.
What is the cost of the exam, and are there hidden fees?
The base cost is $105. While there are no hidden fees from FINRA, your firm may charge an internal processing fee, and you should factor in the cost of study materials and prep courses, which can range from $200 to $500.
How do I schedule my exam date?
Once your firm files your Form U4 and pays the fee, a 120-day enrollment window opens. You can then schedule your exam through the Prometric website.
What is the cancellation or rescheduling policy?
You can reschedule or cancel your exam, but you must do so at least 10 business days in advance to avoid a fee. If you cancel within 3 to 10 days, you will be charged a fee. Canceling with less than 2 business days’ notice usually results in the forfeiture of the entire exam fee.
Am I allowed to bring a calculator?
No, you cannot bring your own calculator. The testing center will provide one for you, either as a physical device or a software-based calculator on the computer screen.
Are bathroom breaks allowed during the exam?
Yes, you can take an unscheduled break, but the exam timer will not stop. You will also have to undergo security re-screening before re-entering the testing room.
What items are strictly prohibited in the testing room?
Prohibited items include cell phones, smartwatches, hats, bags, study notes, and any electronic devices. Most centers even require you to turn your pockets inside out to ensure no materials are being smuggled in.
What is the current pass rate for this exam?
While not official, the industry-standard pass rate is estimated to be around 65%. It is widely considered a “specialist” exam with a higher degree of difficulty than general sales exams.
How many hours should I study?
We recommend 60 to 80 hours. This should be spread out over 2 months to allow for better retention of the complex net capital formulas.
Does the exam change every year?
FINRA updates the question bank periodically to reflect changes in SEC rules and financial regulations. It is vital to use the most up-to-date study materials available.
Are the questions multiple choice or essay based?
The exam consists entirely of multiple-choice questions. There are no essay or short-answer sections.
Do I get my results immediately?
Yes, your score will appear on the screen as soon as you submit the exam. You will also receive a physical printout of your performance.
If I fail, how soon can I retake the exam?
You must wait 30 days after the first and second attempts. After a third failure, the waiting period increases to 180 days.
Does this certification expire?
It does not expire as long as you are registered with a firm. If you leave the industry, you have a two-year grace period before the license lapses.
Are accommodations available for candidates with disabilities?
Yes, FINRA provides accommodations under the Americans with Disabilities Act (ADA). You must submit a formal request and provide documentation to FINRA prior to scheduling your exam.
Conclusion
The Series 28 exam is a rigorous but rewarding challenge that separates general financial professionals from specialized operations experts. By mastering the complexities of net capital, financial reporting, and regulatory compliance, you position yourself as an indispensable asset to any introducing broker-dealer. While the math can be daunting and the rules extensive, a structured study plan and the right resources will lead you to success.
Many candidates who’ve used Fraser Exam resources report feeling more confident on exam day, as our focus on practical application helps demystify the most difficult concepts. Remember to stay focused on the “why” behind the rules, practice your calculations until they become second nature, and approach the exam with a calm, analytical mindset. Good luck on your journey to becoming a qualified FINOP!