Posted By: Kaplan Financial Education
Updated: July 28, 2017
The Series 66 license, known as the Uniform Combined State Law Examination, is a North American Securities Administrators Association (NASAA) exam that is administered by FINRA. It is required for individuals acting as or soliciting for the service of investment advisors or soliciting the purchase or sale of securities within a state. Getting the Series 66 license fulfills the requirements of both the Series 63 and Series 65 licenses.
In order to take the Series 66 exam, you must be a Series 7 license holder, or be taking the Series 7 license exam concurrently with the Series 66 license exam. If you are not planning on getting the Series 7 license, then you must take the Series 65 license exam instead.
Obtaining the Series 66 license is important for representatives who provide advice on ERISA-regulated retirement accounts. While the DOL fiduciary standard rule, which is slated to take effect in April 2017, does not explicitly state that fiduciaries need to have a certain licensing or registration requirement, we believe it is in the best interest of both firms and individuals to protect themselves by becoming a registered investment advisor (RIA) or an investment adviser representative of a RIA, because they are already held to a fiduciary standard.
Unlike many FINRA Series exams, the Series 66 exam does not require an individual to be sponsored by a member firm. If you are not Form U4 registered or affiliated with a firm through FINRA’s Web CRD system, you should use the Form U10 to request and pay for the Series 66 exam. There is an exam fee that is commonly covered by the sponsoring firm if you are Form U4 registered, or by the individual if you are not sponsored.
The Series 66 exam covers four topic areas:
The Series 66 exam contains 100 multiple-choice questions that must be completed in 150 minutes. You must get a 73/100 or higher to pass.
In July 2016, NASAA added new content to the exam to better reflect the skills and knowledge required for dually registered agents of broker dealers and investment adviser representatives. Some content areas were renamed, combined, or reorganized. For example, the alternative investments area was expanded to include additional investment types and given changing market conditions. The content was also expanded regarding client type, ownership, and estate planning techniques. A content area was added to incorporate new topics such as social media, cybersecurity and data protection, anti-money laundering, and custody obligations.
While the length of the exam did not change, the passing score did change to 73%. The weighting of the topics and number of questions in each topic area were also updated to better reflect the importance of certain knowledge and skills. Check NASAA’s website for the most up-to-date content outline for the Series 66 exam.