Introduction
The Uniform Combined State Law Examination, also known as the Series 66, has a formidable reputation for a reason: it is the exam that qualifies individuals to give investment advice for a fee. The organization that creates the test—the North American Securities Administrators Association, or NASAA—works to protect investors in every state, territory, the District of Columbia, Canada, and Mexico. Requiring investment adviser representative candidates to pass the Series 66 is a key tool in the NASAA’s investor protection arsenal. Regulators want to make sure people who are giving investment advice in their state or jurisdiction are competent and will behave legally and ethically. Humans being humans and greed being greed, this is no small order. For you, it means the exam is not easy. NASAA expects you to know about economics; financial reporting; quantitative methods; risks; cash investments; fixed income; equities; pooled investments, such as mutual funds, ETFs, and REITs; derivatives; alternatives; annuities and other insurance-based investments; client types; client profiles; capital market theory; portfolio management; taxes; retirement plans; ERISA; special accounts, such as college savings plans; trading securities; performance measures; state and federal securities acts and regulations; and ethical practices and fiduciary obligations.
Topically, the exam is divided into the following four sections:
- • Economic Factors and Business Information—5 questions (5%)
- • Investment Vehicle Characteristics—15 questions (15%)
- • Client Investment Recommendations and Strategies—30 questions (30%)
- • Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices—50 questions (50%)
The required passing score for the Series 66 is 75%. That means that you must get at least 75 questions correct out of the 100 scored questions on the exam. There are 10 additional “pre-test” questions