When a person is preparing to enter the world of investment professionals, he or she must take - and pass - qualification examinations. Often before the individual is prepared to fully function in his or her profession, there are multiple examinations that must be successfully negotiated. Once the prospective registered representative has passed the first "core" examination - usually the NASD Series 6 or Series 7 - at least one more hurdle remains: the Series 63, 65 or 66.
A question in the minds of many is, "Which one do I need to pass?" In this article, we'll show you how you can answer this question for yourself. The Exams In most states, a new registered representative must - at a minimum - pass the Series 63 to satisfy state law registration requirements. The Series 63 (formally known as the Uniform Securities Agent State Law Examination) consists of 65 questions. Of this number, 60 count toward the candidate's score. The remaining five questions are experimental questions used by NASAA to evaluate their potential future use and, therefore, they do not count toward the candidate's score.
The exam has a time limit of 75 minutes. The exam focuses on the registration of persons and securities under the USA and ethics in the securities industry. (For more on this exam, check out Succeeding At The Series 63 Exam.) The first examination created by NASAA to test the competency of individuals who wish to provide fee-based investment advisory services was the Series 65. At the time, it focused primarily on the Uniform Securities Act, NASAA amendments and ethical practices in the securities industry. Series 65 Makeover The Series 65 exam underwent a dramatic change that became effective in 2000.
It had long been a 75-question exam that focused primarily on state securities laws (the Uniform Securities Act) and ethics, but became a 130-question "competency exam" with a time limit of 180 minutes. Like the Series 63, the Series 65 exam has experimental questions that will be included in every test - there are 10. To pass the exam, the candidate must answer 89 of the 130 questions correctly (68.5%). In addition to questions about the USA and ethics, the Series 65 exam includes questions on the subjects of economics, investment vehicles, investment strategies, analysis and ethics. Currently, the majority of those who take the Series 65 are either securities professionals who have not passed the Series 7 General Securities Representative Exam, or those persons in related fields within the financial services industry - such as accountants - who wish to be in the business of providing investment advice for fees.
This includes, of course, those who work for investment advisory firms and wish to become investment advisory representatives (IARs). (For more insight, see Tips For Series 7 Options Questions and Solving Mixed Options Problems On The Series 7.) Series 66 The Series 66 exam is relatively new. It was created by NASAA in response to requests from broker-dealers and other financial services firms. It is essentially a combination of Series 63 and Series 65, but since a prerequisite for taking the exam is successful completion of the Series 7 exam, it does not include the product, analysis and strategy questions that are a large part of the Series 65. The Series 66 test is 100 questions that count toward the candidate's score and 10 experimental questions.
The time limit for the exam is 150 minutes. To pass the exam, a candidate must correctly answer 71 (71%) of the questions. To avoid overlap with the Series 7, NASAA assembled a committee of securities industry experts to eliminate questions in the Series 66 that would be duplicative of those in the Series 7. As a result, the Series 66 exam is considered by most to be an "easier" test. It will, like the Series 65, qualify the individual to act as an IAR, and it fulfills the requirements of the Uniform Securities Act for state registration.
Note that, candidates can take the 66 or 7 in any order, but both must be completed in order to register. Summary * Passing the Series 63 exam for registration within a state is a requirement for all registered representatives. * Those who wish to be IARs must pass the Series 66 and the Series 7. The Series 66 is equivalent to taking both the Series 63 and Series 65. * If an individual does not already have a Series 7 and wishes to be an IAR, the Series 65 is NASAA's competency exam.
Series 65 License Online Video Course.