Series 65

What Is the Series 65?

Designed by the North American Securities Administrators Association (NASAA) and administered by the Financial Industry Regulatory Authority (FINRA), the Series 65 is an exam and securities license required for individuals to act as investment advisers in the US.

The Series 65 exam, known formally as the Uniform Investment Adviser Law Examination, covers laws, regulations, ethics, and various topics important to the role of a financial adviser.

Key Takeaways

  • Financial professionals in the U.S. must often pass licensing examinations in order to practice.
  • The Series 65 exam qualifies an investment professional to function as an Investment Adviser Representative (IAR) in most states.
  • Topics include state and federal securities acts, rules and regulations for investment advisers, ethical practices, and fiduciary obligations—including communications with clients, compensation, client funds, and conflicts of interest.
  • The exam features 130 multiple-choice questions, and you have 180 minutes to earn a passing score of at least 72%.
  • If you passed the Series 65, you may also need to take the FINRA Series 7 exam to be fully-licensed to sell securities and execute trades.
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Series 65

Understanding the Series 65

Successful completion of the Series 65 exam is designed to qualify candidates as investment adviser representatives (IARs) in their home states.  As an IAR, advisors must act in a fiduciary capacity, offering investment advice to clients for a fee. 

Passing the Series 65 exam, formally known as the Uniform Investment Advisor Law Exam, is the only requirement for becoming an IAR. There are no prerequisites, and candidates do not need to be sponsored by an investment firm to sit for the exam, but they need to file a Form U10 (Form U4 for brokers) and pay the $187 exam fee. 

The Series 65 exam includes 130 questions that cover topics determined to be necessary to understand in order to provide investment advice to clients. These include questions on the subjects of economics, financial markets, investment vehiclesinvestment strategies, analysis, and ethics.

If you are not charging a fee and you do not regularly provide advice on securities, then you most likely do not need to get your Series 65 license. Other FINRA-administered qualification examinations include the Series 3 National Commodities Futures (NCFE), Series 7 General Securities Representative (GS), and Series 63 Uniform Securities Agent State Law.

Financial professionals who have successfully passed the Series 65 exam may not act as investment advisers until licensed and registered in their state.

Series 65 Exam Structure

The Series 65 examination contains 130 multiple-choice questions. Candidates have 180 minutes to complete the exam. Candidates must get 94 of the 130 questions correct to pass (a score of 72.3%).

Test takers must schedule an exam at a qualified testing center, where they are provided with a basic four-function electronic calculator. Only this calculator may be used during the exam. Dry-erase boards and markers are also provided for candidates. No reference materials of any kind are permitted in the exam room, and there are severe penalties for those who are caught cheating or attempting to cheat.

An individual's firm can schedule a candidate to take the exam by filing Form U4 and paying the $175 examination fee. If an individual is not firm-registered, the candidate uses Form U10 to request and pay for the exam.

Series 65 Exam Content

NASAA provides updated information on the exam's content on its website. The exam is structured as follows:

  • Economic Factors and Business Information (15%, 20 questions): Topics include monetary and fiscal policy, economic indicators, financial reporting, quantitative methods, and basic risk concepts.
  • Investment Vehicle Characteristics (25%, 32 questions): Topics include cash and cash equivalents, fixed income securities, methods of fixed income valuation, equities and methods used in equity valuation, pooled investments, derivative securities, and insurance-based products.
  • Client Investment Recommendations and Strategies (30%, 39 questions): Topics include individuals; business entities and trusts; client profiles; capital market theory; portfolio management styles, strategies, and techniques; tax considerations; retirement planning; ERISA issues; special types of accounts; trading securities; exchanges and markets; and performance measurement.
  • Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices (30%, 39 questions): Topics include state and federal securities acts; rules and regulations for investment advisers, investment adviser representatives, broker-dealers, and agents; ethical practices; and fiduciary obligations, including communications with clients, compensation, client funds, and conflicts of interest.

NASAA updated questions on the Series 65 exam in light of 2018 changes to the tax code. Tax-related questions appearing on the exams starting in Jan. 2019 reflect the tax code changes.

Studying for the Series 65

There are several resources in book form or online to help study and prepare for the Series 65 exam. Candidates are encouraged to devote between 50-70 hours to studying for the exam. Unlike many other securities exams, preparing for the Series 65 exam primarily involves memorizing rules and laws. People with good recall might require less preparation time than those who struggle with recall. Regardless, some exam sections are more challenging than others, especially for people with no background in securities.

In addition, Investopedia has reviewed several of the best Series 65 test prep courses, which you can find here.

Series 65 vs. Series 63 vs. Series 66

The NASAA offers three exams: the Series 65; Series 63; and Series 66.

The Series 65 was the first exam created by NASAA back in 1989, used to evaluate the competency of individuals who wanted to engage in commission or fee-based investment advisory services, such as being a financial advisor or RIA. At the time it was launched, it focused primarily on the Uniform Securities Act, NASAA rules, and ethical practices in the securities industry.

The Series 63 was developed to qualify candidates who wished to work in the securities industry within a state and to sell investment products, such as stocks, mutual funds, variable annuities, and unit investment trusts. In other words, to execute trades rather than give out financial advice. The exam covers the principles of state securities regulations and laws, and is formally known as the Uniform Securities Agent State Law Examination.

The Series 66 is a newer NASAA exam that combines subject matter from both the Series 63 and Series 65, and is fittingly known as the Combined State Law Exam. Test-takers of the Series 66 must also take the FINRA Series 7 licensing exam (which is not a co-requisite of the Series 63 or 65, although many individuals will still need the Series 7 to legally operate).

If you only have a Series 65 license, you can give financial advice but you cannot sell securities, execute trades on behalf of clients, or manage portfolios. To do so, you will also need to pass the FINRA Series 7 exam, which is more intensive

Does the Series 65 License Expire?

No, the Series 65 license does not expire as long as you are actively working in the financial services industry. If you leave the industry for more than two years, your new employer may require you to pass the Series 65 exam again.

Do I Need A Sponsor to Take the Series 65?

No. To sit for the Series 65 exam, a candidate does not require sponsorship by a member firm.

How Much Does the Series 65 Exam Cost?

The cost for sitting for the Series 65 exam is currently $187. You'll need a passing score of 72%, but if you fail you can pay the exam fee again and retake the test after 30 days.

Can I Become An IAR Without Taking Series 65?

Yes, but you will instead need to take the Series 7 and Series 66 exams.

Is the Series 65 a Hard Exam?

The NASAA does not release official pass rates, however test preparation programs estimate that the pass rate is around 65-70% of test takers.

The Bottom Line

The Series 65, officially known as the Uniform Investment Adviser Law Exam, is designed to test an individual's knowledge and ability to advise clients in the area of investing and to discuss general financial concepts. The Series 65 exam tests candidates' comprehension of financial concepts and qualifies them to give investment advice and charge a fee for doing so. Most state securities regulators have set the Series 65 as the minimum requirement to become an investment advisor representative (IAR).

Article Sources
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  1. NASAA. "Series 65 Exam Outline."

  2. NASAA. "Series 65 Test Specifications."

  3. Pass Perfect. "Series 65 Exam FAQ & Information."

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