Becoming a financial adviser involves a lot of red tape – there’s registrations, continuing education requirements, compliance restrictions and so on. For those just getting started, those regulatory requirements can be even more confusing.
One of the most common paths people take to becoming a financial adviser is through a Series 66 exam and license. To help up-and-coming advisers make sense of the hurdles they’ll need to overcome in their journey to certification, we’re outlining seven common questions about the Series 66 exam and licensing process.
Seven questions (and answers) about the Series 66 license for RIAs
With so many licensing exams on the table, it can be confusing to know which you’ll need to take to register as an investment adviser. Here are a few of the most common questions surrounding the Series 66 licensing exam – and their answers.
1. What is a Series 66 license?
The Series 66 license, also known as the “Uniform Combined State Law Examination,” is a test for those who wish to become registered as both securities agents (representatives) and investment adviser representatives. The test is created by the North American Securities Administrators Association (NASAA) and administered and regulated by the Financial Industry Regulatory Authority (FINRA).
Related: A recap of the FINRA Exam Report for 2023
As the full name suggests, the Series 66 test is a combination of two other licenses: the Series 65 exam (which is solely focused on investment adviser registration) and the Series 63 exam (which covers state securities regulations).
2. What is the difference between Series 66, Series 65 and Series 7?
As stated above, the Series 66 license is a combination of the Series 65 and Series 63 licenses.
The Series 65 is a license specifically for investment adviser representatives, allowing them to offer investment advice but not sell securities. Meanwhile, the Series 63 license focuses on state securities laws and regulations, specifically the rules and regulations that apply to the sale of securities within a particular state. When you take the Series 66 exam, both of these licenses are covered.
Related: NASAA Announces Updates to the Series 63, 65, and 66 Examinations
In contrast, the Series 7 licensing is taken at or around the same time as the Series 66 exam. It is a comprehensive securities license that permits individuals to engage in a wide range of securities transactions, including selling stocks, bonds, mutual funds, options and more. However, it does not permit individuals to provide investment advisory services.
With both the Series 7 and Series 66 licensing complete, you’re all set to register as an investment adviser. It should be noted that several states have added the Securities Industry Essentials (SIE) examination to their requirements for IAR registration when using the Series 7 and Series 66 in lieu of the Series 65.
3. Do financial professionals have to pass the Series 66 to be an investment adviser representative?
In most cases, advisers must pass both the Series 66 and Series 7 exams to become an investment adviser representative.
If you have successfully passed both the Series 7 and 66 examinations in the past 24 months, then a prospective investment adviser representative will generally not be required to take the Series 65 examination, as the active Series 7 and 66 combination will suffice.
There are a number of professional designations that will often be accepted in lieu of an examination, depending on your specific circumstances. These include the Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA), Certified Insurance Counselor (CIC), Chartered Financial Consultant (ChFC®), or Personal Financial Specialist (PFS).
4. What’s in the Series 66 exam?
The Series 66 test consists of 100 multiple-choice questions, and individuals are given a maximum of two and a half hours to complete the test. A passing score is achieved by correctly answering at least 73% of the questions.
Exam registrants should also expect a 10-question pre-test to accompany the licensing exam – although these questions will not count toward your overall score.
The exam covers various topics, including:
- Economic factors and business information
- Investment vehicle characteristics
- Client investment recommendations and strategies
- Laws, regulations and guidelines pertaining to securities and investments
- Ethical and fiduciary responsibilities
- And more
You must take the exam in-person in most instances, with exceptions given only for medical issues, disabilities or other approved issues.
Also note: If you don’t pass the exam, you will have to wait 30 days before you can retake it. You will also be required to repay the exam fee.
5. How much does the Series 66 exam cost?
Currently, the Series 66 exam costs $177. If you fail the exam or miss your exam, you’ll have to pay that fee again to retake the test.
Keep in mind that you may also need to cover costs of any study materials in preparation for the exam date.
6. How do I sign up for the Series 66 Exam?
Once you’ve created an account on the FINRA website, you’ll be able to register for an upcoming exam.
Next, select the Series 66 test and follow the prompts to register. You will need to provide personal information at this time, including your contact details and employment history. After registering and paying the exam fee, you’ll receive information on how to schedule your exam. Choose a date, location and time that is most convenient for you.
7. How do I study for the Series 66 Exam?
There are a number of companies that provide Series 66 exam prep materials. For example, Kaplan University provides preparation packages starting at $149, which include practice exams, tips, a performance tracker and more.
With all this information in tow, you’re ready to prepare, register for and complete your Series 66 licensing – and continue your journey to becoming a successful financial adviser.
Got your Series 66 license? We can help you register!
Our RIA registration resources can help you navigate through the licensing and registration process. Click here to connect with a member of our team and get started today.