How to Get a Series 66 License

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Series 66 Overview

The Series 66 combines the Series 63 and 65 licenses by satisfying the state registration requirements and the requirements for those who want to become an investment advisor representative. This license is also known as the Uniform Combined State Law license and is required for individuals to be considered investment advisor representatives in the securities industry. The Series 66 license is required to be paired with the Series 7 license in most cases.

The four key components to the exam are:

  1. Economic factors and business information
  2. Investment vehicle characteristics
  3. Customer investment recommendations and strategies
  4. Laws, regulations, and guidelines including prohibition of unethical business practices

This exam to built to be a testament of the rules and regulations of the industry so be sure to spend time on them. It is important for the individual to check periodically for any updates FINRA issues on the components of the examination. While studying for this exam, expect to find calculations in the 'customer investment recommendations and strategies' component and memorization on technically topics on the 'laws, regulations, and guidelines' component.

Who is the Series 66 license for?

The Series 66 license is for an individual who have previously obtained the Series 7 license or who plan too; these exams can be taken in any order. Investment advisor representatives are required to have either a Series 66 or 65 license. The Series 65 license does not carry all the requirements needed for a registered representative for the state. If an individual wants to provide all the products and services of both a registered representative and investment advisor representative, the Series 66 is required.

An investment advisor representative gives recommendations or investment advice on securities, manages accounts of clients, decides which recommendation should be given, and holds themselves out as providing investment advice, and who receives compensation to solicit and negotiate the selling of investment advice or supervise employees who preform those tasks.

This definition above is normally known as a 'fee-based account' in the industry. This type of customer account does not trade on commission but on an annual percentage fee an advisor manages at their discretion.

Steps to Obtain a Series 66 License

  • Pass the Securities Industry Essentials (SIE) Exam

Recently a new license has become required be obtained before any others, the Securities Industry Essentials (SIE) examination. This exam introduces key concepts, definitions, and acceptable and unacceptable sales practices.

  • Find a Sponsorship or Self Register

Unlike many other FINRA exams, a person is not required to be sponsored in order to get a Series 66 license, but most are. Firms sponsor an individual by submitting Form U4, also known as the Uniform Application for Security Industry Registration. This step initiates the appropriate background checks, including fingerprinting, and registration filing of the individual with FINRA and it's member firm.

If a person chooses to self-register, then they will have to file Form U10 with FINRA and pay the appropriate fee.

  • Study for the Exam

The Series 66 exam is a combination of the Series 63 and 65. However, it is actually known to be easier than the Series 65 alone. There have been recent updates over the years to include topics such as cyber-security, social media, and anti-money laundering. It is highly recommended to take an educational course to learn the appropriate information.

This type of course can be found on the Study.com website under Financial Securities Courses. Plan on taking practice exams before the real thing. It is recommended to take at least two but possibly more if your practice scores are not above the passing rate or it takes you longer than the required time restraint.

  • Pass the Exam

The exam consists of 100 multiple choice questions and must be completed in 150 minutes. An individual must get at least a 73/100 to pass the Series 66 examination.

Series 66 Exam Resources

The two main resources an individual should reference is the FINRA website, www.finra.org and a study prep website such as Study.com. It is also important to start with the organization that is producing the exam as you can also find the specific laws, requirements, and legal documentation of the industry. Start by reading what FINRA publishes on their website in the event any updates or notice is posted about updates to rules or the exam.

Second, reference a study prep website, such as Study.com. This type of website is best because it translates the legal documents into educational pieces and typically makes it easier to learn. This is the best place to find best practices, educational resources, and practice problems. The material from these test prep websites are produced from industry professionals who have passed the exams and directs you to the most important topics to focus on.

Continue reading: How to Get a Series 7 License

In this lesson, we will discuss various types of finance certifications and associated exams. Included are important terms, examples of each exam and certifications, and the career path within the industry.

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