Unlock Your Career: How the Series 66 Exam Empowers Investment Advisors

Julia Kagan is a financial and consumer journalist and former senior editor specializing in personal finance at Investopedia.

What Is the Series 66 Exam?

The Series 66 exam, officially known as the NASAA Uniform Combined State Law Examination, is a critical licensing test for individuals aiming to become investment advisor representatives (IARs) or securities agents. It covers essential topics related to investment advice and securities transactions, enabling licensed professionals to legally provide financial advisory and wealth management services.

Developed by the North American Securities Administrators Association (NASAA) and administered by the Financial Industry Regulatory Authority (FINRA), the Series 66 exam is often taken alongside the Series 7 exam, which is a prerequisite.

Key Highlights

• The Series 66 exam qualifies candidates as investment advisor representatives.
• Passing both Series 66 and Series 7 is mandatory to register as an IAR or securities agent.
• The exam features 100 scored multiple-choice questions with a passing score set at 73%.
• Exam topics include economic factors, investment vehicles, client strategies, and regulatory laws.
• Series 66 combines the content of Series 63 and Series 65 exams.

Understanding the Exam Structure

The Series 66 exam consists of 100 scored questions plus 10 unscored pretest questions, all to be completed within 150 minutes. Candidates must correctly answer at least 73 questions to pass. During the exam, only electronic calculators provided by the testing center are permitted, along with a dry-erase board and marker. Strict anti-cheating policies are enforced.

Registration is typically handled by the candidate's employer via Form U4 or an online application, with an exam fee of $177 as of 2024. Since April 1, 2022, the Series 66 must be taken in-person at authorized testing centers, except for candidates with valid medical exemptions.

Exam Content Breakdown

• Economic Factors and Business Information (8%): Financial reporting, quantitative methods, and risk types.
• Investment Vehicle Characteristics (17%): Valuation of fixed-income securities, derivatives, alternative investments, and insurance products.
• Client Investment Recommendations and Strategies (30%): Client profiling, portfolio management, tax considerations, retirement planning, and performance measurement.
• Laws, Regulations, and Ethical Practices (45%): State and federal securities laws, ethical standards, and fiduciary duties.

Series 66 vs. Series 63 and Series 65

The Series 66 exam effectively merges the content covered in both Series 63 and Series 65 exams but requires the candidate to have passed the Series 7 exam as a co-requisite. While Series 63 grants state-level authority to transact securities, and Series 65 authorizes financial advice and asset management, the Series 66 combines both functions for streamlined licensing.

Benefits of Passing the Series 66

Successfully passing the Series 66 exam authorizes financial professionals to operate as investment advisor representatives or securities agents with state-level registration, empowering them to provide comprehensive financial advice and manage client assets legally.

Difficulty Level and Preparation Tips

The Series 66 exam is challenging due to its broad coverage of detailed financial and regulatory material. Estimated pass rates range between 65% and 70%. Candidates who do not pass must wait 30 days before retaking the exam. Preparation through dedicated study and practice exams is highly recommended.

Exam Cost and Registration

The exam fee for the Series 66 is $177 in 2024. Many financial firms cover this cost for their employees. Registration is completed by the employer or candidate through FINRA.

Final Thoughts

The Series 66 exam is an essential step for professionals seeking to become licensed investment advisors or securities agents. By combining the knowledge areas of Series 63 and Series 65, and requiring the Series 7 as a co-requisite, it offers a comprehensive pathway to a rewarding career in financial services. Passing this exam enables legal securities transactions and advisory services across all states, marking a significant milestone in your financial career journey.

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