A licensing exam that’s found throughout the United States, the Series 65 is a pretty big deal.
So today, we take an in-depth look at this test that all investment advisers will have to face to be able to give investment advice to others.
In particular, we will look at:
There’s a lot of information to get through here and all of it is worth your attention, that’s for sure.
Series 65 Exam Overview
Starting out, let’s take a quick overview of this FINRA exam.
Well, to start, technically it’s not a Financial Industry Regulatory Authority test.
It’s only administered by that organization.
The exam is actually from the North American Securities Administrators Association (NASAA) and is also called the Uniform Investment Adviser Law Examination.
It’s a requirement for investment advisor representatives through the United States as decreed by state law.
It’s very different from the Securities Industry Essentials (SIE) qualification exam, for example, in the fact that you don’t need sponsorship from a FINRA member firm.
In fact, test-takers could register and take the exam before they’ve passed any FINRA exam.
A form U4, however, is needed to write the exam for those employed by FINRA-member firms.
Those candidates who aren’t will need a form u10.
Series 63 license v Series 65 license
So how are these two securities exams different?
Well, if you want a state license as a broker-dealer, you would take the Series 63 exam.
And as we’ve already mentioned, the Series 65 exam is for candidates who need a license to become investment adviser representatives.
Most state securities laws say that candidates with a Series 65 license are allowed to not only provide investment advice but also provide guidance on general financial issues, much like a financial advisor or financial planner.
Registered investment packages are not something that can be sold if you hold this license, however.
What’s covered in the Series 65 exam?
Lots of word-heavy coursework, that’s for sure.
Four main sections will form part of this exam, however.
Let’s break down not only what those are but also how many questions each section contributes to the overall exam.
- Recommendations and Strategies (30% of all questions)
- Regulations and Guidelines (30% of all questions)
- Investment Vehicles (25% of all questions)
- Economic Factors and Business Information (15% of all questions)
Other quick facts you need to know about the Series 65 exam
The Series 65 exam is far longer than the Series 63.
Where that is just 60 questions, with candidates given 75 minutes to complete it, the Series 65 is a little over double the amount.
Candidates will have 180 minutes to finish 130 multiple-choice questions and that equates to around 90 seconds for each of them or thereabouts.
When it comes to pricing, to register for the FINRA Series 65, a candidate will have to pay $187.
With such word-heavy course work, it’s advised that candidates not only focus on that but effective test prep as well, especially if they want to pass on their first attempt.
Should a candidate fail, they can retake the test but you need to consider several rules.
For a second attempt at the exam, you must wait 30 days from your initial date.
That counts too if you fail the second time and try for a third.
That’s a wait of 30 days as well.
The penalty, however, gets significantly harsher if you fail a third.
From that point on, every failure means a candidate will have to wait 180 days or six months to attempt the exam once again.
And that’s not something anyone would want, right?
That’s where proper preparation is key to ensure you give yourself every chance of passing the first time.
Other than studying the coursework, I’d encourage you to use other study materials.
Choose what’s worked for you before, for example, flashcards, study guides, or prep courses.
What you shouldn’t miss out on, however, is practice questions or even full practice exams.
Without a doubt, this is the best way to test if you understand the coursework fully or not.
If not, it will expose those areas that you need to work on, that’s for sure.
There are many excellent extras available when it comes to adding to your preparation.
- Series 65 Study materials such as flashcards, practice questions, prep courses, or other online courses
- Full Series 65 practice exams
- Series 65 study guides
- Finding a Series 65 tutor
- And more
So make sure you use extra study materials, Series 65 practice tests, and study guides to ensure your study time helps you prepare efficiently.
Series 65 Pass Rate
What is the pass rate for this exam?
Well, I wish I had passing scores for you, but that’s not the case, unfortunately.
That’s because it’s simply impossible to get the passing rate from state to state.
Ultimately, however, the pass rate is not something that any candidates should worry about.
The real concern is the overall pass mark for the exam.
And that’s 72% just like the Series 63.
If you want to achieve that, a score of 94 out of 130 is what you are aiming for on the test.
While we covered the basic exam structure a little earlier, let’s look at it in more detail.
While doing so, we can break down each of the four major sections a little more, all of which are covered in the exam questions.
Economic Factors and Business Information
In total, 20 questions out of 130 will come from this section.
They will cover:
- Economic concepts
- Financial reporting
- Analytical methods
- Types of risks
Investment Vehicle Characteristics
In total, 26 questions out of 130 will come from this section.
They will cover:
- Types of and characteristics of cash and cash equivalents
- Types and characteristics of fixed income securities
- Types of equity securities
- How to value equity securities
- Types and characteristics of pool investments
- Kinds of derivative securities
- Alternative investment options
- Types of insurance products
- Other types of assets
Client Investment Recommendations and Strategies
In total, 39 questions out of 130 will come from this section.
They will cover:
- Client types and profiles
- Theory of capital markets
- Strategies for portfolio management
- Various tax considerations
- Types of retirement plans/accounts
- Fiduciary requirements
- Special account types
- Techniques for estate planning and ownership
- Securities trading
- Measures to gauge portfolio performance
Laws, Regulations, and Guidelines
In total, 39 questions out of 130 will come from this section.
They will cover:
- Regulation of investment advisors, investment advisor representatives, broker-dealers as well as their agents.
- Securities and issuers regulation
- Administrative provisions and remedies
- Client communication
- Fiduciary obligations and ethical practices
What we’ve outlined above gives you a fantastic insight into the subject of test questions you will face on the Series 65 exam.
Series 65 Preparation
When it comes to preparing for the Series 65, you are going to have to put in some extended time, that’s for sure.
Experts say that candidates should set aside 60 hours to work through the coursework.
And of course, there’s extra study prep to consider as well, particularly practice tests.
Increasing your chance of passing the first time
In this section, we will be taking a look at some helpful hints for candidates taking the exam, especially if they don’t want a dreaded rewrite.
Where to start?
Well, because there is so much to get through in the coursework, that’s your starting point right there.
There is no point in looking for practice questions, study guides, or anything else like that before you familiarize yourself with the coursework.
It’s critical to note that there’s a lot to go through here.
As this is an exam that covers various state laws about investment advisers, you will find lots of legal jargon.
This can be confusing if you skim read through it.
So be sure to take your time and read through everything thoroughly, especially as there will be topics that you probably have never come across before.
By reading through the coursework, perhaps twice if necessary, you give yourself the overview you need to base the rest of your study prep on.
There’s something else you can do during this overview of the coursework.
It will help you quickly identify key concepts too.
And that’s making notes as you go along and highlight those areas of the work that you feel are important.
Most people learn far easier if they make their own notes.
While it’s not that easy with coursework like you will find in the Series 65, it will be worth it to help get those key concepts into your head.
If you don’t want to write out your own notes, then perhaps highlight the key concepts instead.
Ultimately, each of us studies in different ways, but it would be a mistake to not work through everything, that’s for sure.
You need a plan
You’ve got 180 days from the day you register for the exam to write it.
While that’s more than enough time to prepare, people often leave things to the last minute because it seems like they have so much wiggle room.
So how do you overcome that?
Well, it’s easy if you draw up a study plan.
You can do this once you’ve worked through the coursework but I would do it right at the beginning.
In other words, factor in the time you need to cover the coursework, then draw up a plan that includes all other elements.
As mentioned earlier, this could include taking extra exam prep, working through study guides and practice questions, and finally, taking practice exams.
Too many people jump straight into the practice exams.
Rather only undertake those when you think you are prepared enough for the real thing.
They are the perfect way to gauge if you are ready or not.
Here’s a valuable hint that you can incorporate into your study plan as well.
And that’s revision work.
This is the best way to keep key concepts fresh in your mind.
It’s an invaluable tool with text-heavy coursework too.
The simplest way to use revision is at the start of your study period each day,.
Begin by looking back on the work you covered in the previous session.
Consider study guides
There is no doubt that using a study guide can go a long way to helping you pass the exam.
That’s especially true if you’ve worked through the coursework but are still struggling to understand everything.
How can you possibly hope to pass the exam if you are in that situation?
Study guides offer a way to help you immeasurably because they will highlight the key points that you need to understand about the Series 65.
Also, you can focus on those areas in which your knowledge is lacking.
Practice questions and exams
Talking about areas where your knowledge is lacking, this is best exposed by taking practice exams.
Without a doubt, candidates who opt not to take practice questions before they take the real test could be setting themselves up for failure.
And if you are taking a practice exam and failing, there’s no chance you are going to pass the real thing.
In that case, more preparation is necessary.
Experts agree that if you are consistently getting around 80% on the practice exams you take, you should pass the real deal
That’s it for our look into the Series 65 exam structure, pass rate, passing score, and best preparation practices.
This is a tough cookie and you will have to be thoroughly prepared should you wish to pass it the first time.
But put in that preparation and you should be all set!
We will get back to you as soon as we can.