What is the Series 66?
The Series 66, also known as the NASAA Uniform Combined State Law Examination, is essential for those aiming to become investment advisor representatives (IARs) or securities agents. This comprehensive exam covers relevant topics necessary for providing investment advice and managing securities transactions for clients. Successfully obtaining this license allows IARs to legally practice financial advising and wealth management duties.
The Series 66 exam is developed by the North American Securities Administrators Association (NASAA) and is administered by the Financial Industry Regulatory Authority (FINRA).
Key Takeaways
- The Series 66 is a professional licensing exam for investment advisor representatives (IARs).
- To become an IAR or securities agent, candidates must pass both the Series 66 and Series 7 exams.
- The Series 66 exam includes 100 multiple-choice questions and requires a passing score of 73%.
- The exam covers various topics, including economic factors, investment vehicles, client/customer investment recommendations, strategies, and relevant laws and regulations.
- The Series 66 exam is an amalgamation of the Series 63 and Series 65 exams.
Unveiling the Series 66: Your Path to a Thriving Career
Understanding the Series 66
The Series 66 certification was created by NASAA due to industry demands. FINRA administers the exam and manages the results. Note that the Series 7 exam is a co-requisite; candidates must complete it before taking the Series 66. For many, passing the Series 7 allows them to avoid the longer Series 65 exam.
Series 66 Exam and Structure
The Series 66 consists of 100 scored multiple-choice questions and 10 pretest questions, answered within 150 minutes (2½ hours). A correct score of 73 out of 100 questions is required to pass.
An individual’s employer can register a candidate for the test by submitting either a Form U4 or Form U10 and paying the $177 fee. More details can be found on FINRA’s Series 66 informational web page. As of October 2022, the Series 66 exam must be taken at a designated testing center unless a candidate provides medical proof of a qualifying disability.
Series 66 Exam Content
NASAA updates exam content regularly. As of October 2022, the questions are divided into four sections:
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Economic Factors and Business Information (5%): Involves questions on financial reporting, quantitative methods (such as internal rate of return and net present value), and various types of risks.
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Investment Vehicle Characteristics (20%): Encompasses methods to value fixed-income securities, derivative securities, alternative investments, and insurance-based products.
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Client/Customer Investment Recommendations and Strategies (30%): Includes topics on various client types, client profiling, capital market theory, portfolio management strategies, tax considerations, retirement planning, trading accounts, and performance measurement.
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Laws, Regulations, and Guidelines (45%): Covers state and federal securities acts, ethical practices, and fiduciary obligations.
Series 66 vs. Series 63 and Series 65
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Series 66: Combines components of the Series 63 and Series 65 but requires passing the Series 7 first.
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Series 63: Focuses on state-level authority to transact in securities.
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Series 65: Provides state-level authority to give financial advice and manage client assets.
Paving the Way: What Can You Do with a Series 66 License?
Passing the Series 66 exam allows financial professionals to function as investment advisor representatives (IARs) or securities agents. This license permits them to offer investment advice and manage client wealth at a state level.
Comparison: Series 66 vs. Series 65
The Series 65 exam is another licensing option by NASAA. While the Series 65 is comprehensive, the Series 66 combines material from the Series 63 and Series 65. By necessitating the Series 7 as a co-requisite, it doesn’t involve detailed product analysis and strategy questions found in the Series 65, making it generally perceived as slightly less challenging.
How Difficult is the Series 66 Exam?
The Series 66 exam covers a comprehensive range of detailed topics and is considered challenging. Although official pass rates are unpublished, prep programs estimate a 65% to 70% pass rate. A second attempt requires a 30-day waiting period.
Understanding the Cost
The Series 66 exam costs $177 as of 2022, and often, financial firms may cover this expense.
Conclusion: Your Gateway to Financial Advising
Aspiring financial professionals must pass both the FINRA Series 7 and NASAA Series 66 exams to provide investment advice and transact securities legally across states. The Series 66 encompasses both Series 63 and Series 65 material in a 100-question multiple-choice format, requiring a score of 73% to pass. Upon passing, you’ll open doors to prosperous career opportunities in investment advising.
Related Terms: Series 63, Series 65, Series 7, FINRA, NASAA.
References
- Financial Industry Regulatory Authority. “Series 66—Uniform Combined State Law Exam”.
- North American Securities Administrators Association. “Exam FAQs”.
- Financial Industry Regulatory Authority. “Exam Candidates Requiring Testing Accommodations”.
- North American Securities Administrators Association. “Series 66 Test Specifications”.
- Pass Perfect. “Series 66 Exam Information”.
- Financial Industry Regulatory Authority. “Qualification Exams”.
