Key Takeaways
- Series 65 qualifies investment adviser representatives.
- 140 multiple-choice questions, 180 minutes, closed-book.
- Covers economics, securities, strategies, and regulations.
- Pass requires at least 71% correct answers.
What is Series 65?
The Series 65 exam, officially known as the Uniform Investment Adviser Law Examination, is a licensing test that qualifies individuals as investment adviser representatives (IAR). It assesses knowledge of economic factors, securities, investment strategies, and regulatory requirements essential for providing investment advice.
Passing the Series 65 is a prerequisite for professionals who want to legally offer financial advice and manage client portfolios under state regulations.
Key Characteristics
The Series 65 exam covers comprehensive topics necessary for competent investment advisory services, including:
- Exam Structure: 140 multiple-choice questions with 130 scored and 10 unscored pretest questions, completed within 180 minutes.
- Passing Score: At least 92 correct answers (about 71%) are required to pass.
- Subject Areas: Economic factors, investment vehicles, client recommendations, and laws/regulations.
- Regulatory Focus: Emphasizes fiduciary duties, compliance with the Investment Advisers Act, and ethical business practices.
- No Prerequisites: Candidates can sit for the exam without prior qualifications.
How It Works
The exam tests your ability to analyze macroeconomic trends and use macroeconomics principles to inform investment decisions. It evaluates your understanding of securities such as bonds, stocks, and derivatives, including knowledge of valuation metrics like the par yield curve.
Additionally, the Series 65 assesses your capacity to create tailored client investment strategies, incorporating concepts like tactical asset allocation, and ensuring compliance with legal and ethical standards. This makes it essential for anyone advising on or managing portfolios involving mutual funds, ETFs, or individual stocks and bonds.
Examples and Use Cases
Holding a Series 65 license enables you to work as a registered investment adviser, offering personalized advice across various asset classes and clients. Examples include:
- Equity Investments: Advising clients on dividend-paying companies such as those featured in our best dividend stocks guide.
- Fixed Income: Recommending bond ETFs from resources like our best bond ETFs to diversify portfolios.
- Portfolio Management: Employing data analytics (data analytics) to optimize asset allocation and risk management.
- Corporate Examples: Understanding how companies like Delta and other industry leaders impact investment decisions.
Important Considerations
When preparing for the Series 65, focus on the high-weighted sections covering client investment strategies and legal regulations, as they constitute 60% of the exam. Staying current with changes in regulations and market conditions will enhance your advisory capabilities.
Obtaining this credential allows you to register with state authorities and legally provide advice, but continuing education and ethical conduct remain critical to maintaining your license and client trust.
Final Words
Passing the Series 65 exam is essential for becoming a licensed investment adviser representative, requiring focused study on economic factors, investment vehicles, strategies, and regulations. To prepare effectively, review practice questions aligned with the exam’s weighted topics and consider enrolling in a reputable prep course.
Frequently Asked Questions
The Series 65 exam, also known as the Uniform Investment Adviser Law Examination, qualifies candidates as investment adviser representatives by testing their knowledge of investment advice, economic factors, securities, strategies, and regulations.
The exam consists of 140 multiple-choice questions, including 130 scored and 10 unscored pretest questions. Candidates have 180 minutes to complete the closed-book test.
To pass the Series 65 exam, you must correctly answer at least 92 of the 130 scored questions, which is about a 71% passing score.
No, there are no prerequisites to sit for the Series 65 exam. Anyone can register by submitting FINRA's Form U4 or through the enrollment window.
The exam covers four main topic areas: Economic Factors and Business Information, Investment Vehicle Characteristics, Client Investment Recommendations and Strategies, and Laws, Regulations, and Guidelines.
Economic Factors and Business Information make up 15%, Investment Vehicle Characteristics 25%, Client Investment Recommendations and Strategies 30%, and Laws, Regulations, and Guidelines 30% of the scored questions.
The exam tests knowledge of cash equivalents like CDs and T-bills, fixed income securities such as bonds, equity securities including stocks, pooled investments like mutual funds and ETFs, derivatives, alternative investments, and insurance products.
The fee to take the Series 65 exam is $187, which you pay when registering through FINRA.
