Under $100 million (small / mid-sized)

State(s) — file Form ADV with the state

May choose SEC; required at $110M

Falls below $90 million

Withdraw from SEC, return to state registration

Excessive trading in a controlled account to generate fees

Trading ahead of a known large customer order

Misrepresentation / omission

Making an untrue statement, or omitting a material fact

Trading without authority (no discretionary authorization)

Mixing client securities or funds with the firm's own

Guaranteeing against loss

Promising a client they cannot lose money

Do I need a sponsor to take the Series 65?

No. Unlike most FINRA representative exams, the Series 65 requires no firm sponsorship — you can enroll and sit it on your own, which makes it a common path for independent financial planners and advisers.

How hard is the Series 65 exam?

It is law- and concept-heavy rather than math-heavy. The two largest areas — client recommendations and laws/ethics — are 30% each, so most candidates need 50–100 hours of focused study across all four content areas.

What is the difference between the Series 65 and Series 66?

The Series 65 qualifies you as an Investment Adviser Representative on its own. The Series 66 combines the IAR and broker-dealer agent state-law content but requires you to also pass the SIE and Series 7. Choose the Series 65 if you are advice-only.

How should I use this Series 65 study guide?

Read it by content area alongside your prep provider's materials. After each module, take the checkpoint to find gaps, then drill that area with our free practice exam and flashcards. Spend the most time on client strategies and the law sections — they are 60% of the test.

Is this Series 65 study guide free?

Yes — the full guide, the checkpoints, the glossary, the practice exam, and the flashcards are 100% free with no account required.

A Roth IRA is an individual retirement account funded with after-tax dollars. You get no upfront deduction, but qualified withdrawals — held five years and taken after age 59½ — are completely tax-free, and the account has no required minimum distributions during the owner's lifetime. Because contributions are after-tax, you can withdraw your own contributions anytime tax- and penalty-free; only the earnings face the 5-year-and-59½ test. For 2026 the IRA contribution limit is \$7,500 (\$8,600 if age 50+). Retirement accounts are heavily tested in the Series 65's client-strategies area.

A fiduciary is someone legally required to act in another person's best interest. An investment adviser is a fiduciary to its clients, owing a duty of care and a duty of loyalty — it must put the client's interests first and either avoid conflicts of interest or fully disclose them. This is a higher standard than a broker's suitability obligation: disclosure must be affirmative, not made only when a client asks. The adviser's fiduciary duty is the spine of the Series 65's laws-and-ethics area — roughly 30% of the exam.

What is the difference between a traditional and Roth IRA?

A traditional IRA may give you a tax deduction now, with contributions and earnings taxed when you withdraw them. A Roth IRA gives no deduction, but qualified withdrawals are tax-free. Traditional IRAs require minimum distributions starting at age 73; Roth IRAs have none in the owner's lifetime. Rule of thumb: traditional = tax break now, taxed later; Roth = no break now, tax-free later. The right choice depends on whether the client expects a higher or lower tax rate in retirement. The Series 65 tests these distinctions when matching retirement strategies to a client's profile.

What is a required minimum distribution (RMD)?

A required minimum distribution is the minimum amount a traditional IRA or retirement-plan owner must withdraw each year, beginning at age 73. The amount is calculated from the account balance and an IRS life-expectancy factor, and missing it triggers a steep penalty. Roth IRAs have no RMD during the owner's lifetime — a key planning advantage the exam tests. The first RMD can be delayed to April 1 of the year after you turn 73; each later RMD is due by December 31.

ERISA is the Employee Retirement Income Security Act, the federal law governing private-sector retirement plans. It sets standards for plan fiduciaries, who must act solely in the interest of participants and beneficiaries, diversify investments prudently, and follow the plan documents — with personal liability for breaches. An ERISA fiduciary is held to a 'prudent expert' standard and is barred from prohibited transactions with parties-in-interest. The Series 65 covers ERISA under retirement plans and fiduciary obligations.

What is dollar-cost averaging?

Dollar-cost averaging is investing a fixed dollar amount at regular intervals regardless of price. Because the same amount buys more shares when prices are low and fewer when high, it can lower the average cost per share over time and removes the temptation to time the market. It is a discipline, not a guarantee — it doesn't ensure a profit or protect against loss in a falling market. On the Series 65 it's a client-recommendation strategy alongside diversification and asset allocation.

What is the federal funds rate?

The federal funds rate is the interest rate at which banks lend reserves to one another overnight. The Federal Open Market Committee sets a target range for it, and its level ripples out to other short-term rates, influencing how households and businesses borrow and spend. The Fed steers the rate mainly through open market operations — buying securities to add reserves and lower rates, or selling to drain reserves and raise rates. The Fed's dual mandate is maximum employment and stable prices, with a 2% long-run inflation goal.

What is the business cycle?

The business cycle is the recurring rise and fall of economic activity through four phases: expansion, peak, contraction, and trough. It is measured from the start of one recession to the start of the next, and it drives the interest-rate and market conditions advisers must read. A recession is a significant, broad decline in activity lasting more than a few months; an inverted yield curve is a classic warning sign. The Series 65 tests the cycle's phases and the indicators (GDP, CPI, unemployment) that track it.

What is a municipal bond?

A municipal bond is a debt security issued by a state or local government to fund public projects. Its interest is generally exempt from federal income tax — and often state tax for in-state residents — which makes it attractive to higher-bracket investors and a tested fixed-income product. The two main types are general obligation bonds (backed by the issuer's taxing power) and revenue bonds (backed by a specific project's income). Because the interest is already tax-free, munis are unsuitable inside a tax-deferred account like an IRA.

What is diversification?

Diversification is spreading money across many investments so that if one loses value, others may offset the loss — the classic 'don't put all your eggs in one basket.' It reduces the risk tied to any single holding, sector, or asset class within a portfolio. It mainly reduces unsystematic (company- or sector-specific) risk; it cannot remove systematic risk such as broad market, interest-rate, or inflation risk. It works with asset allocation — dividing a portfolio among stocks, bonds, and cash by the client's time horizon and risk tolerance.

How are capital gains taxed?

Capital gains are taxed by holding period. A long-term gain — on an asset held more than one year — is taxed at preferential rates of 0%, 15%, or 20% for most investors. A short-term gain, on an asset held one year or less, is taxed as ordinary income at the investor's marginal rate. The one-year line is the key tested fact: holding just over a year can sharply cut the tax on a gain. Capital losses offset gains, and up to \$3,000 of net loss can offset ordinary income per year, with the rest carried forward.

What is a variable annuity?

A variable annuity is an insurance contract whose value rises and falls with a separate account of investment subaccounts the holder chooses. Because the investor bears the market risk, it is treated as a security — it requires a prospectus and a properly licensed representative to sell. Contrast it with a fixed annuity, which pays a guaranteed rate and is an insurance product only, not a security. The Series 65 tests when variable products are suitable and the disclosure they require.

What is Regulation T?

Regulation T is the Federal Reserve rule that sets the initial margin requirement for buying securities on credit at 50%. The customer must deposit 50% of the purchase price, and the broker-dealer may lend up to the other 50% of the value of the marginable securities. Don't confuse the 50% Reg T initial requirement with FINRA's 25% minimum maintenance margin, which applies after the position is open. A cash account, by contrast, requires payment in full. Reg T is a recurring Series 65 figure.

What are soft dollars?

Soft dollars are research or brokerage services an investment adviser receives in exchange for directing client trades to a broker-dealer. Section 28(e) of the Securities Exchange Act provides a safe harbor allowing an adviser to pay above the lowest commission for these services, in good faith. Only research and brokerage services qualify — not office rent, travel, or overhead, which fall outside the safe harbor. Even within it, the adviser still owes a duty of best execution and must disclose the arrangement.

What is the difference between the Series 65 and Series 66?

The Series 65 qualifies you as an Investment Adviser Representative on its own, with no other exam required. The Series 66 covers the same investment-adviser state law plus broker-dealer agent law, but you must also pass the SIE and Series 7. Choose the 65 if you are advice-only. Both are NASAA exams administered by FINRA; the 66 is paired with a securities-rep registration, the 65 stands alone. Career-changers and independent planners who don't sell securities typically take the Series 65.

What is an investment adviser?

An investment adviser is any person who, for compensation, is in the business of advising others about the value of securities or the advisability of buying or selling them. The definition expressly includes financial planners, and it is the central concept the Series 65 is built around. Three tests define it: providing advice about securities, doing so as a business, and receiving compensation — meet all three and you're an adviser. Banks and certain professionals (lawyers, accountants, engineers, teachers) whose advice is solely incidental are excluded.

Investment adviser (IA)

Any person who, for compensation, is in the business of advising others about the value of securities or the advisability of buying or selling them. The Uniform Securities Act's definition includes financial planners.

Investment adviser representative (IAR)

An individual who works for an investment adviser and gives advice, manages accounts, solicits clients, or supervises those who do. IARs register in the states where they have a place of business or enough clients.

Federal covered adviser

An adviser registered with (or eligible for registration with) the SEC — generally one with $110M+ in assets under management. States cannot require it to register, but can still pursue fraud.

An investment adviser's duty of care and duty of loyalty — to act in the client's best interest at all times, seek best execution, and either avoid conflicts of interest or fully disclose them for informed consent.

The investment adviser registration form. Part 1 is regulatory data; Part 2A is the plain-English client brochure (fees, conflicts, discipline) and Part 2B is the supplement about the advising individuals.

Advisers Act Rule 204-3: deliver the Form ADV Part 2 brochure at least 48 hours before the contract, or at signing if the client may cancel without penalty within five business days; deliver annually thereafter.

Holding, or having any authority to obtain possession of, client funds or securities. Custody triggers extra safeguards — qualified custodian, account statements, and (often) a surprise annual examination.

Uniform Securities Act (USA)

The NASAA model state securities law on which most state 'blue sky' laws are based. It defines advisers, broker-dealers, agents, and securities, and sets registration and antifraud rules at the state level.

Investment Advisers Act of 1940

The federal law governing investment advisers, including SEC registration and the antifraud/fiduciary provisions of Section 206. State law (the USA) mirrors many of its definitions.

Section 206 (antifraud)

The Advisers Act provision making it unlawful for any adviser — registered or not — to engage in fraudulent, deceptive, or manipulative conduct. It imposes the adviser's affirmative duty of full and fair disclosure.

An investor who may buy private (Reg D) offerings: net worth over $1M excluding the primary residence, or income over $200K individual / $300K joint in each of the last two years, plus certain credentials and entities.

A firm in the business of effecting securities transactions for customers (broker) or for its own account (dealer). Registers with the SEC and the states; agents who sell for it also register.

An individual who represents a broker-dealer (or issuer) in effecting securities transactions. Under the USA, clerical and ministerial staff are not 'agents.'

The recurring fluctuation of economic activity through four phases — expansion, peak, contraction, and trough — measured from the start of one recession to the start of the next.

A significant, broad decline in economic activity lasting more than a few months. The NBER dates U.S. recessions using several measures of activity, not real GDP alone.

The interest rate banks charge one another for overnight loans of reserves. The FOMC sets a target range for it; its level influences other short-term rates across the economy.

Open market operations

The Federal Reserve's main monetary tool — buying securities to add reserves and lower rates (easing), or selling securities to drain reserves and raise rates (tightening).

The rate the Federal Reserve charges depository institutions that borrow directly from its discount window. The primary-credit rate is set above the top of the federal funds target range.

Government use of spending and taxation (set by Congress and the President) to influence the economy — distinct from monetary policy, which the Federal Reserve controls.

FREE Series 65 Study Guide 2026 + Quizzes & Readiness Score

This free Series 65 study guide walks through every topic on the NASAA Uniform Investment Adviser Law Examination, organized into the same four content areas NASAA uses to build the test.^[1]

It’s interactive, not a wall of text: every module has built-in checkpoint quizzes, flashcards, and practice questions, so you learn by doing — not just reading.

Read it module by module, test yourself at each checkpoint, then round out your prep with our practice exam, flashcards. The Series 65 needs no sponsor, so you can sit it on your own to become an Investment Adviser Representative.

Series 65 Exam Snapshot

Series 65 exam at a glance (2026)
Detail	Series 65 exam
Questions	140 total (130 scored + 10 unscored)
Time limit	180 minutes (3 hours)
Passing score	92 of 130 scored ( $\approx$ 71%)
Format	Multiple choice
Eligibility	No sponsor required
Credential	Investment Adviser Representative (IAR)

The two largest areas — client strategies and the law — are 30% each, so the back half of the exam carries the most weight. Budget your study accordingly:^[1]

Series 65 exam weighting by NASAA content area

III · Client recommendations & strategies30% · 39 Qs

IV · Laws, regulations & ethics30% · 39 Qs

II · Investment vehicle characteristics25% · 32 Qs

I · Economic factors & business information15% · 20 Qs

Module 1 · Economic Factors & Business Information

Area I — 15% of the exam (about 20 questions). This area sets the economic stage: how the economy moves, how policymakers respond, how to read a company’s numbers, and how to classify risk. It is the smallest area, but its vocabulary runs through the rest of the exam.

1.1 Basic Economic Concepts

The economy moves through a repeating — expansion, peak, contraction, and trough:^[16]

The business cycle

Order: Expansion → Peak → Contraction → Trough

A is a significant, broad decline in activity lasting more than a few months; the NBER dates recessions using several measures, not GDP alone. Key indicators the exam expects you to recognize include GDP, the CPI (inflation), and the unemployment rate, plus leading signals like the yield curve — an inverted curve (short rates above long rates) is a classic recession warning.

1.2 Monetary & Fiscal Policy

The government has two levers. The Federal Reserve runs monetary policy (the money supply and short-term rates); Congress and the President run (spending and taxes).^[13]

Monetary policy vs. fiscal policy
Policy	Who controls it	Tools
Monetary policy	Federal Reserve (FOMC)	Open market operations, the discount rate, reserve requirements
Fiscal policy	Congress & the President	Government spending and taxation

The Fed’s main day-to-day tool is : buying securities adds reserves and lowers the (easing); selling drains reserves and raises it (tightening).^[14] The Fed’s mandate is maximum employment and stable prices, with a long-run inflation goal of 2% measured by the PCE price index.

1.3 Financial Reporting & Analytical Methods

To judge a company you read its statements: the balance sheet (assets = liabilities + equity, a snapshot in time), the income statement (revenue minus expenses over a period), and the cash-flow statement. From them come ratios the exam tests — liquidity (current ratio), leverage (debt-to-equity), and valuation (price-to-earnings).

Analytical methods cover the time value of money — present value, future value, and the idea that a dollar today is worth more than a dollar tomorrow — plus measures like net present value (NPV) and internal rate of return (IRR). The exam keeps these conceptual rather than computational.

1.4 Types of Risk

The master distinction: is market-wide and cannot be diversified away, while is specific to one issuer or sector and can be reduced by diversification.

Types of investment risk
Risk	Category	What it means
Market risk	Systematic	The whole market falls and drags a security with it.
Interest-rate risk	Systematic	Rising rates push existing bond prices down.
Inflation (purchasing-power) risk	Systematic	Fixed payments buy less over time.
Business / credit risk	Unsystematic	One issuer underperforms or defaults.
Liquidity risk	Unsystematic	You can't sell quickly without a price concession.

↑ Higher risk & return

Alternatives

Stocks

Mutual funds

Bonds

Cash

↓ Lower risk & return

The risk–return spectrum: low-risk cash and bonds at the bottom, higher-risk equities and alternatives at the top.

Checkpoint · Module 1

Question 1 of 10

Over time, a country's trade deficit will lead to a decline in the value of its currency because

Module 2 · Investment Vehicle Characteristics

Area II — 25% of the exam (about 32 questions). Know every major product, what gives it value, and its risks. The Series 65 tests characteristics and suitability, not the heavy math of the Series 7.

2.1 Cash & Fixed Income

Cash equivalents are short-term, highly liquid instruments: T-bills, commercial paper, certificates of deposit, banker’s acceptances, and money-market funds. A bond is a loan to the issuer — the investor is a creditor paid interest plus return of par ($1,000) at maturity.^[18] The most-tested idea is the inverse relationship: when rates rise, existing bond prices fall.

U.S. Treasury securities
Security	Maturity	How it pays
Treasury bills (T-bills)	1 year or less	Sold at a discount; no coupon
Treasury notes (T-notes)	2 to 10 years	Semiannual coupon, redeemed at par
Treasury bonds (T-bonds)	20 to 30 years	Semiannual coupon, redeemed at par
TIPS	5 to 30 years	Principal adjusts with inflation (CPI)

are free of credit risk and exempt from state and local tax.^[19] pay interest that is generally exempt from federal income tax; the two types are general obligation (backed by taxing power) and revenue (backed by a project’s income).

2.2 Equity Securities

Common stock represents ownership with voting rights and variable dividends, but stands last at liquidation. Preferred stock trades votes and growth for a fixed dividend and priority over common. Related products: rights (short-term, buy new shares at a discount), warrants (long-term sweeteners), and ADRs (foreign shares carrying currency risk).

2.3 Pooled Investments

Packaged products give small investors instant diversification and management. The Investment Company Act of 1940 defines three types:^[20]

The three investment company types
Type	How it's priced	Managed?
Open-end fund (mutual fund)	At NAV (forward pricing — next computed NAV)	Yes
Closed-end fund	Market price on an exchange (can be above/below NAV)	Yes
Unit investment trust (UIT)	Redeemable units; fixed portfolio	No — unmanaged

An prices at the next computed (forward pricing).^[21] trade intraday on an exchange. trade at a market price. Also recognize REITs (pass through ≥90% of income) and BDCs.

2.4 Derivatives & Alternatives

An option is a contract on 100 shares: a call is the right to buy (bullish), a put the right to sell (bearish). The exam focuses on the vocabulary and directional logic, not multi-leg math. Alternatives include direct participation programs (DPPs) (illiquid limited partnerships), hedge funds (private, accredited-only), and commodities.

2.5 Insurance-Based Products

and variable life insurance are insurance products that are also securities, because the value rides on a separate account and the holder bears market risk — so they need a prospectus and a properly licensed rep.^[22] A fixed annuity (guaranteed rate) is an insurance product only. 529 plans are tax-advantaged education savings plans.

Checkpoint · Module 2

Question 1 of 10

Which of the following statements concerning equity securities is not correct?

Module 3 · Client Investment Recommendations & Strategies

Area III — 30% of the exam (about 39 questions). The largest area, and the most applied: match real clients to suitable strategies, accounts, and tax treatment. Budget heavy study time here.

3.1 Clients & the Client Profile

Clients range from individuals and joint owners to trusts, estates, and business entities (sole proprietorships, partnerships, corporations). Before recommending anything you build a client profile: financial facts (income, net worth, tax bracket) and non-financial facts (age, time horizon, risk tolerance, objectives, liquidity needs). The recommendation must fit that profile.

3.2 Capital Market Theory & Portfolio Management

says you can build an efficient portfolio with the most return for a level of risk by combining assets that don’t move together.^[23] Tested measures: (volatility vs. the market), alpha (return above what beta predicts), standard deviation (total volatility), and the Sharpe ratio (return per unit of risk).

Strategies divide into strategic vs. tactical allocation, active vs. passive management, and value vs. growth styles. Risk-management techniques include diversification, rebalancing, and .^[24]

3.3 Taxation

Taxes shape every recommendation. The headline rule is the holding period: a gain on an asset held more than one year is long-term (preferential 0/15/20% rates); one year or less is short-term (ordinary income).^[27] Know also the wash-sale rule (no loss deduction if you rebuy within 30 days) and the difference between qualified and non-qualified dividends.

3.4 Retirement Plans & ERISA

Retirement accounts are heavily tested. A traditional IRA may be deductible now and is taxed at withdrawal; a gives no deduction but tax-free qualified distributions.^[25] For 2026 the IRA limit is $7,500 ($8,600 if 50+). begin at age 73 for traditional accounts; Roth IRAs have none in the owner’s lifetime.^[26]

Traditional vs. Roth IRA
Feature	Traditional IRA	Roth IRA
Contributions	May be tax-deductible	After-tax (never deductible)
Qualified withdrawals	Taxed as ordinary income	Tax-free (5 years + age 59 $\tfrac{1}{2}$ )
RMDs	Begin at age 73	None during the owner's life

Employer plans include 401(k)/403(b)/457, SEP and SIMPLE IRAs, and defined-benefit pensions. Private plans fall under , whose fiduciaries must act solely for participants and diversify investments.^[28]

Checkpoint · Module 3

Question 1 of 10

An investment adviser registered in 4 states would be permitted to enter into an advisory contract with all of the following prospective clients except

Module 4 · Laws, Regulations & Guidelines (Including Unethical Practices)

Area IV — 30% of the exam (about 39 questions). Tied for the largest area, and the reason the Series 65 exists: the Uniform Securities Act, the Advisers Act, registration, and the adviser’s fiduciary duty. Know the bright lines cold.

4.1 Registration of IAs, IARs, BDs & Agents

An advises others about securities for compensation, as a business.^[5] Where it registers depends on size: a mid-sized adviser may register with the SEC at $100M in AUM and must at $110M; an SEC adviser returns to the states only below $90M.^[8] A registers with the SEC; smaller advisers register with the state.

Investment adviser registration by AUM
Assets under management	Where it registers
Under $100 million (small / mid-sized)	State(s) — file Form ADV with the state
$100M–$110M	May choose SEC; required at $110M
$110 million or more	SEC (federal covered)
Falls below $90 million	Withdraw from SEC, return to state registration

Registration uses , including the Part 2 client brochure under the .^[9]^[10] An is the individual who advises; a and its register separately. IARs complete 12 hours of continuing education each year.^[11]

4.2 Registration of Securities

Under the , securities register by coordination (alongside a federal filing), qualification (state-only), or notice filing (federal covered securities). Exempt securities (government and municipal issues, bank issues) and exempt transactions (private placements, sales to institutions) skip state registration — but the antifraud rules still apply.

4.3 Ethical Practices & Fiduciary Duty

The adviser’s — a duty of care and a duty of loyalty — is the spine of this area.^[6]The adviser must serve the client’s best interest and either eliminate conflicts of interest or fully disclose them for informed consent. This is a higher bar than the broker’s suitability standard.^[29]

4.4 Prohibited Practices & Remedies

of the Advisers Act bars any adviser from fraudulent, deceptive, or manipulative conduct. Know the prohibited acts:

Prohibited practices the Series 65 tests
Practice	What it is
Churning	Excessive trading in a controlled account to generate fees
Front running	Trading ahead of a known large customer order
Misrepresentation / omission	Making an untrue statement, or omitting a material fact
Unauthorized trading	Trading without authority (no discretionary authorization)
Commingling	Mixing client securities or funds with the firm's own
Guaranteeing against loss	Promising a client they cannot lose money

Remedies under the USA include civil liability (rescission plus interest), criminal penalties, and the state Administrator’s power to deny, suspend, or revoke registration and issue cease-and-desist orders. Political contributions can trigger MSRB Rule G-37 pay-to-play bans.^[30]

Checkpoint · Module 4

Question 1 of 10

There are waivers from the Series 65 exam requirement for certain professional designations. Among those qualifying for the waiver are individuals who are

How to Use This Study Guide

A study guide is a map, not the whole territory — use it alongside your prep provider’s materials and our practice tools, not on its own:

A study loop that actually works

1
Read a content area here
Work through one NASAA area at a time so related concepts reinforce each other.
2
Take the checkpoint
The questions at the end of each module expose what didn't stick.
3
Drill the gaps
Send your weak area straight into the free practice exam and flashcards.
4
Bookmark & space it out
Come back over several days. Short, spaced sessions beat one long cram.

Series 65 Concept Questions

Common Series 65 concepts NASAA tests on the exam. Tap any card for a short, exam-ready answer backed by the official regulator — then test yourself on them as flashcards.

Series 65 Glossary

Quick definitions for the terms you’ll see most on the Series 65 exam:

Accredited investor: An investor who may buy private (Reg D) offerings: net worth over $1M excluding the primary residence, or income over $200K individual / $300K joint in each of the last two years, plus certain credentials and entities.
Agent: An individual who represents a broker-dealer (or issuer) in effecting securities transactions. Under the USA, clerical and ministerial staff are not 'agents.'
Beta: A measure of a security's or portfolio's volatility relative to the overall market. A beta above 1.0 is more volatile than the market; below 1.0 is less volatile.
Brochure rule: Advisers Act Rule 204-3: deliver the Form ADV Part 2 brochure at least 48 hours before the contract, or at signing if the client may cancel without penalty within five business days; deliver annually thereafter.
Broker-dealer (BD): A firm in the business of effecting securities transactions for customers (broker) or for its own account (dealer). Registers with the SEC and the states; agents who sell for it also register.
Business cycle: The recurring fluctuation of economic activity through four phases — expansion, peak, contraction, and trough — measured from the start of one recession to the start of the next.
Closed-end fund: An investment company that issues a fixed number of shares in an IPO, then trades on an exchange at a market price that can be above or below NAV.
Custody: Holding, or having any authority to obtain possession of, client funds or securities. Custody triggers extra safeguards — qualified custodian, account statements, and (often) a surprise annual examination.
Discount rate: The rate the Federal Reserve charges depository institutions that borrow directly from its discount window. The primary-credit rate is set above the top of the federal funds target range.
Dollar-cost averaging: Investing a fixed dollar amount at regular intervals regardless of price, so the investor buys more shares when prices are low and fewer when high — lowering average cost per share over time.
ERISA: The Employee Retirement Income Security Act, governing private retirement plans. A fiduciary must act solely for participants, diversify investments, and follow the plan; breaches carry personal liability.
Exchange-traded fund (ETF): A registered open-end (or UIT) investment product whose shares trade intraday on an exchange at market prices, often tracking an index at low cost.
Federal covered adviser: An adviser registered with (or eligible for registration with) the SEC — generally one with $110M+ in assets under management. States cannot require it to register, but can still pursue fraud.
Federal funds rate: The interest rate banks charge one another for overnight loans of reserves. The FOMC sets a target range for it; its level influences other short-term rates across the economy.
Fiduciary duty: An investment adviser's duty of care and duty of loyalty — to act in the client's best interest at all times, seek best execution, and either avoid conflicts of interest or fully disclose them for informed consent.
Fiscal policy: Government use of spending and taxation (set by Congress and the President) to influence the economy — distinct from monetary policy, which the Federal Reserve controls.
Form ADV: The investment adviser registration form. Part 1 is regulatory data; Part 2A is the plain-English client brochure (fees, conflicts, discipline) and Part 2B is the supplement about the advising individuals.
Investment adviser (IA): Any person who, for compensation, is in the business of advising others about the value of securities or the advisability of buying or selling them. The Uniform Securities Act's definition includes financial planners.
Investment adviser representative (IAR): An individual who works for an investment adviser and gives advice, manages accounts, solicits clients, or supervises those who do. IARs register in the states where they have a place of business or enough clients.
Investment Advisers Act of 1940: The federal law governing investment advisers, including SEC registration and the antifraud/fiduciary provisions of Section 206. State law (the USA) mirrors many of its definitions.
Modern portfolio theory (MPT): The framework that an investor can build an 'efficient' portfolio offering the most return for a level of risk by combining assets whose returns are not perfectly correlated.
Municipal bond: Debt of a state or local government. Interest is generally exempt from federal income tax (and state tax for in-state residents). Types: general obligation (taxing power) and revenue (project income).
Mutual fund (open-end): An SEC-registered open-end investment company that continuously offers redeemable shares priced at NAV and pools investor money into a managed portfolio of securities.
Net asset value (NAV): An investment company's total assets minus total liabilities. A mutual fund's per-share NAV is computed at least daily; orders fill at the next computed NAV (forward pricing).
Open market operations: The Federal Reserve's main monetary tool — buying securities to add reserves and lower rates (easing), or selling securities to drain reserves and raise rates (tightening).
Recession: A significant, broad decline in economic activity lasting more than a few months. The NBER dates U.S. recessions using several measures of activity, not real GDP alone.
Regulation T: The Federal Reserve rule setting the initial margin requirement for buying margin securities at 50% — the customer deposits 50% and the broker-dealer may lend the rest.
Required minimum distribution (RMD): The minimum amount a traditional IRA or retirement-plan owner must begin withdrawing annually starting at age 73. Roth IRAs have no RMD during the owner's lifetime.
Roth IRA: An individual retirement account funded with after-tax dollars. Contributions are never deductible, but qualified distributions — held 5 years and taken after age 59 $\tfrac{1}{2}$ — are entirely tax-free.
Section 206 (antifraud): The Advisers Act provision making it unlawful for any adviser — registered or not — to engage in fraudulent, deceptive, or manipulative conduct. It imposes the adviser's affirmative duty of full and fair disclosure.
Systematic risk: Market-wide risk that diversification cannot remove — market, interest-rate, inflation (purchasing-power), currency, and political/regulatory risk.
Treasury securities: Direct U.S. government debt: T-bills ( $\le 1$ year, sold at a discount), T-notes (2–10 years), and T-bonds (20–30 years). Considered free of credit risk; interest is exempt from state and local tax.
Uniform Securities Act (USA): The NASAA model state securities law on which most state 'blue sky' laws are based. It defines advisers, broker-dealers, agents, and securities, and sets registration and antifraud rules at the state level.
Unsystematic risk: Risk specific to one company, industry, or security — business, credit (default), and liquidity risk. It can be reduced by diversification.
Variable annuity: An insurance/annuity product whose value rides on a separate account of subaccounts. Because the holder bears market risk, it is a security requiring a prospectus and a properly licensed rep.

Free Series 65 Study Materials & Resources

Everything you need to pass the Series 65 is free here — no paywall, no sign-up. This guide is the foundation; pair it with the rest of our free Series 65 study materials for active recall, timed practice, and last-minute review:

Series 65 Practice Exam — full-length, timed, NASAA-style questions with explanations.
Series 65 Flashcards — active-recall decks for the high-yield facts.

Series 65 Study Guide FAQ

The Series 65 has 140 questions: 130 are scored and 10 are unscored pretest questions. You have 180 minutes, and you must answer at least 92 of the 130 scored questions correctly (about 71%) to pass.

References

1.NASAA. “Series 65 Exam Content Outline.” NASAA.org. ↑
2.NASAA. “Uniform Investment Adviser Law Examination (Series 65) Study Guide.” NASAA.org. ↑
3.FINRA. “Series 65 — Uniform Investment Adviser Law Exam.” FINRA.org. ↑
4.NASAA. “Uniform Securities Act (2002).” NASAA.org. ↑
5.U.S. Securities and Exchange Commission. “Investment Advisers Act of 1940 (compiled).” GovInfo.gov. ↑
6.U.S. Securities and Exchange Commission. “Commission Interpretation Regarding Standard of Conduct for Investment Advisers (Release IA-5248).” SEC.gov. ↑
7.U.S. Securities and Exchange Commission. “Dodd-Frank Act Changes to Investment Adviser Registration.” SEC.gov. ↑
8.U.S. Securities and Exchange Commission. “Transition of Mid-Sized Investment Advisers from Federal to State Registration.” Investor.gov. ↑
9.U.S. Securities and Exchange Commission. “Form ADV, Part 2 (Appendix C).” SEC.gov. ↑
10.U.S. Securities and Exchange Commission. “Investor Bulletin: Form ADV — Brochure and Brochure Supplement.” Investor.gov. ↑
11.NASAA. “Investment Adviser Representative Continuing Education.” NASAA.org. ↑
12.U.S. Securities and Exchange Commission. “Assessing Accredited Investors under Regulation D.” SEC.gov. ↑
13.Board of Governors of the Federal Reserve System. “Monetary Policy: What Are Its Goals? How Does It Work?.” FederalReserve.gov. ↑
14.Board of Governors of the Federal Reserve System. “Open Market Operations.” FederalReserve.gov. ↑
15.Board of Governors of the Federal Reserve System. “Reserve Requirements.” FederalReserve.gov. ↑
16.Federal Reserve Bank of St. Louis. “All About the Business Cycle: Where Do Recessions Come From?.” StLouisFed.org. ↑
17.Board of Governors of the Federal Reserve System. “Initial Margin Requirements under Regulations T, U, and X.” FederalReserve.gov. ↑
18.U.S. Securities and Exchange Commission. “Bonds.” Investor.gov. ↑
19.U.S. Department of the Treasury. “Treasury Bills, Notes & Bonds.” TreasuryDirect.gov. ↑
20.U.S. Securities and Exchange Commission. “Mutual Funds and ETFs.” Investor.gov. ↑
21.U.S. Securities and Exchange Commission. “Net Asset Value (glossary).” Investor.gov. ↑
22.U.S. Securities and Exchange Commission. “Variable Annuities — What You Should Know.” Investor.gov. ↑
23.U.S. Securities and Exchange Commission. “Asset Allocation and Diversification.” Investor.gov. ↑
24.U.S. Securities and Exchange Commission. “Dollar Cost Averaging (glossary).” Investor.gov. ↑
25.Internal Revenue Service. “Traditional and Roth IRAs.” IRS.gov. ↑
26.Internal Revenue Service. “Retirement Plan and IRA Required Minimum Distributions FAQs.” IRS.gov. ↑
27.Internal Revenue Service. “Topic No. 409, Capital Gains and Losses.” IRS.gov. ↑
28.U.S. Department of Labor. “Fiduciary Responsibilities (ERISA).” DOL.gov. ↑
29.FINRA. “Rule 2111 — Suitability.” FINRA.org. ↑
30.Municipal Securities Rulemaking Board. “Rule G-37: Political Contributions.” MSRB.org. ↑

Sources for the concept answers

Every answer in the Series 65 concept questions above is drawn from an official primary source:

Internal Revenue Service. “Roth IRAs.” IRS.gov, accessed 18 June 2026.
U.S. Securities and Exchange Commission. “Municipal Bonds.” Investor.gov, accessed 18 June 2026.
U.S. Securities and Exchange Commission. “Interpretive Release Concerning the Scope of Section 28(e) (Release 34-23170).” SEC.gov, accessed 18 June 2026.

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