This exam is required by certain states for an individual who wants to register as an investment adviser representative and securities agent. Passing the Series 66 would be equivalent to passing both the Series 63 and Series 65 exams. Additionally, individuals are required to pass the Series 7 exam as a prerequisite for taking the Series 66. This post will provide an overview on the Series 66 exam and some thoughts on both taking and passing the exam.
The Series 66 Basics
What: The exam has a time limit of two hours and 30 minutes and a total of 110 questions, 10 of which are “pretest” questions and do not count in your final score. The exam covers the following topics: Economic Factors and Business Information; Investment Vehicle Characteristics; Client Investment Recommendations and Strategies; and Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices. You must earn at least 75% to pass the exam.
Where: You can take the exam at most Pearson VUE or Prometric testing centers.
When: You should probably sign up for the exam at least a week prior to taking it, and you can choose the time and date on either the Pearson or Prometric website when you register.
Why: The exam is required for those individuals who want to become both securities agents (generally brokers) and investment adviser representatives.
How to sign up
You can register for the exam by submitting a Form U-4 or Form U-10 through the IARD system online. Please not that, effective September 15, 2010, FINRA requires individuals to use either their CRD number or FINRA ID number in order to schedule an exam and no longer accepts social security numbers. If you have any questions regarding registering for an exam, be sure to ask your law firm, compliance consultant, or feel free to contact us.
The cost to take the exam is $128.
How to study for the exam
It is recommended that you obtain a study guide and thoroughly read the entire guide. NASAA (North American Securities Administration Association) provides a study guide available for download on their website. Also, Kaplan provides a useful study guide that presents the study material in a simple and easy-to-understand way, and their practice questions are very similar to questions you are likely to see on the actual exam.
Take at least two to three practice exams prior to taking the test, possibly more. Use memory refreshers such as note cards or other review materials. Do not cram the morning of the test, as this will probably only make you more anxious. In fact, it is recommended that you take the exam in the morning after a full night’s rest.
Day of exam
Arrive at the testing center at least 45 minutes prior to taking the exam to allow yourself time to review some of your notes beforehand. The proctor will require you take off your jackets and place your belongings, including your study material, in a provided locker. Be sure to have woken up early enough to eat breakfast beforehand and be fully alert during the test.
The exam is computer-based and will initially instruct you on how to properly answer and mark the following questions. Note that the beginning of the exam will most likely include the easiest questions, and then the questions will get harder as you reach the middle. Always attempt to make the most educated guess on questions you do not understand.
The length of the exam might require you to pause and use the restroom or take a break. Allow yourself time to step away from the computer for a moment, take a drink, and gather your thoughts. When you encounter difficult questions, you always have the option of marking the question for review. Never spend an extended period of time on a question, as you will just waste time on answering other questions you might know better.
After you have completed the questions, you will have the option of changing any of your answers. After completely answering everything, you will receive your score immediately.
If you don’t pass
A number of managers who take the exam do not pass or only come close to passing. If this is the case, you will need to wait another 30 days before re-taking the exam. If you do not pass the exam the second time, you will need to wait another 60 days before taking the exam. If you do not pass either the third or fourth attempt, you will need to wait at least 180 days before taking the exam again. There is no limit on the number of times allowed for taking a test.
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Bart Mallon, Esq. runs the Hedge Fund Law Blog and provides hedge fund start up and legal services through Cole-Frieman & Mallon LLP. He can be reached directly at 415-868-5345.