The Series 65 Exam

If you are a hedge fund manager in certain states (California and Texas are two prominent examples) then your management firm will need to be registered as an investment adviser with your state’s Securities Commission. In all states, the prerequisite for such registration is that the firm have at least one investment adviser representative who has passed certain qualifying exams (the Series 65 exam or the Series 7 and Series 66) or have certain designations (CFA, CFP, etc).

This post intends to give you an overview of the Series 65 exam and some thoughts on taking and passing this exam.

The Series 65 basics

What: a three-hour (maximum) 140 question computer based exam which focuses on the following topic areas: economics and analysis; investment vehicles; investment recommendations and strategies; and legal and regulatory guidelines, including prohibition on unethical business practices. The exam features 10 ungraded questions (which can appear anywhere within the test) and an examinee needs to correctly answer 89 of 130 graded questions (70%).

Where: you will take the exam at either a Pearson-Vue or Prometric testing station.

When: you will sign up to take the exam at a time of your choosing on either the Pearson or Prometric website. It is recommended you schedule the exam at least a week prior to the date you plan to take it.

Why: it is required for a person to become registered as an investment adviser representative.

How to sign up

You will typically register for the Series 65 by submitting a Form U-4 through the IARD system or by submitting a Form U-10 online. Your law firm or your compliance consultant can help steer you through this process. Also feel free to contact us if you have any questions.

The cost to take the exam is $120. There may also be some state and IARD fees if you are signing up for the exam through the Form U-4 process.

How to study for the exam

I recommend to all of my clients that they put a pretty good effort into studying. I have seen a good portion of very smart hedge fund managers fail the exam on the first try. The central reason, in my opinion, is lack of a diligent study program. While the Series 65 is not a college chemistry exam, it still covers a lot of information which is probably new to the manager. Accordingly, I recommend that a manager set aside at least 40 hours to prepare for the exam. During the preparation phase, I recommend the following:

Get a study guide and read the guide from front to back. I read my study guide from front to back while I actively created notecards as I read each chapter. Doing so takes much longer, but afterward I was able to keep the notecards in my pocket and review them whenever I had free time, which kept the material fresh in my mind.

I used the Kaplan study guide. I am partial to the Kaplan study guides and have exclusively used these guide when studying for the various securities exams I have taken – I have passed the Series 3, Series 7, Series 24, Series 65 and Series 66 exams. The major frustration with the Kaplan guide is that it contained many errors. However, I think that Kaplan does the best job of preparing practice questions which will be very similar (if not exactly the same) to what you are likely to see on the exam. There are some other study guides out there like the “Pass the 65,” however, I have not found a guide which presents the information in a simple, matter-of-fact way like the Kaplan materials.

Other study options include various multi-media and internet applications. Kaplan also has a full-day class you can take from an instructor.

Take two to three practice exams. I took two Kaplan practice exams. After taking each exam, I examined the answer to every question, including the ones I correctly answered. This review process really helped me to solidify my understanding of the material. [Note: you may need to take more than two practice exams to feel comfortable with your knowledge base. If this is the case, I highly recommend taking more practice exams.]

Get a good night of rest the night before the exam. I always scheduled my exams in the morning. This way I can get the exam out of the way early and I do not need to be anxious during the day. I try to get a good night’s sleep the night before. At this point, it is not going to help your exam performance to stay up into the morning trying to cram.

Day of exam

Make sure you wake up early enough to be awake and alert. You should eat a proper breakfast. Allow extra time to get to the testing site. Pearson and Prometric have different rules about when you are supposed to show up at the testing site. A good rule of thumb is 45 minutes prior to your testing time. When you get to the testing site, you will sign in and the proctor will give you the rules of the testing site. Be ready to take everything out of your pockets and to take your jacket off (it is advisable to dress in layers as the testing rooms are often kept at very cool temperatures). You will likely be nervous before the test – I took the opportunity after signing in and before the test time to review a few of the more important note cards before I put them in my provided locker. This kept my mind busy, calmed my nerves, and gave me a little extra bit of confidence that I could answer the questions on the exam.

The exam

The exam is a computer-based exam so the first five minutes or so you’ll be given an on-line demonstration of the manner in which to answer questions and mark them for review. After this demonstration, the exam will start. The first ten to fifteen questions will generally be easier than the questions which come in the middle of the exam – don’t get too complacent. The middle of the exam will drag on and during this time there were many questions which I was not sure about and there were a lot of questions where I had to give a best guess. At about 2/3 of the way through the exam, I thought that I was going to fail for sure. Be aware of this, it happened to me in almost every single FINRA exam which I took.

Because the exam is so long – 180 minutes – you may need to use the restroom during the middle. If this is the case don’t hesitate to take some time for a break. During these breaks I would take some time to grab a drink of water and take a few deep breaths. When you get back, complete the last half or third of the exam in a methodical manner. If you encounter a question which you do not have a clue about how to answer, either guess and move on or guess and mark the question for review. Do not spend an inordinate amount of time trying to come to the correct answer – there are enough questions which you will know the answers to and it is most important that you get to those questions without being flustered. Remember also that the final 15 to 20 questions are generally going to be easier.

When you have answered all of the questions you will have the option to go back over your answers and to change any of your previous answers. It is recommended that you do not make any changes unless you are positive that your new answer is correct. Once you have certified that you are satisfied with your present answers the computer will ask you to confirm that you wish to proceed. When you confirm, the computer will begin to process your answers. During this minute or so your heart will race as adrenaline pumps through you. The screen will then tell you if you have passed or not.

If you don’t pass

Some people will not pass this exam – I have spent plenty of time on the phone talking to managers who almost passed. If you don’t pass it is not the end of the world. The major drawback of not passing the exam is that you will have to wait 30 days to take the exam again. If time is of the essence, this drawback could be the difference between an on-time hedge fund launch and the dreaded delay. As such, I always stress to the client that it is much better to be overprepared than underprepared. You will thank yourself for those extra few hours when you have passed the exam. If you do not pass the exam on the second try, you will need to wait 60 days to take the exam again.

***UPDATE FOR MAY 2010***

As many of you know, the Series 65 exam changed in 2010 and it is now much more difficult to pass.  I have heard more stories from people this year about not passing than I did last year.  Also a concern is that the study guides are not spending enough time on the new emphasis in the exam.  For instance, one person I just spoke with mentioned that there were many more questions on trusts and pensions than were covered in the study guides.  As always I recommend you get an up to date study guide and take at least two practice exams before taking the actual exam.

33 thoughts on “The Series 65 Exam

  1. Pingback: How to register as a CPO or a CTA | Hedge Fund Law Blog

  2. brooke

    I found your blog very interesting and having been one of those that didn’t pass the 65 the first time around I ordered every study guide I could find online. I really liked Kaplans guide but like you found the mistakes very tedious and frustrating. Came across STC (securities training corporation) and loved the book. It was very well written and had lots of tips very similar to Kaplan’s version but for me seemed easier to read through. Just wanted to let you know that it might be worth checking out.

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  4. Chuck Lowenstein

    Thanks for the kind words about the Kaplan course. I have recently taken the responsibility for editing the Series 63, 65 and 66 exams and was amazed at the number of errors. Although most were typographical in nature, there were far too many where one would mark the correct answer to a question only to be told that it was wrong.

    Our 4th Editions of the Series 65 and Series 66 are just released and I believe I have caught virtually all of these mistakes. In addition, our new platform allows us to post errata on our website on a daily basis so, just in case there is something that I overlooked, it will be posted for all to see.

    Chuck Lowenstein
    Senior Editor – Securities
    Kaplan Financial Education

    1. Donald

      I am currently using Kaplan’s 6th edition book to study for the Series 65. Could you recommend any additional information or sources to maximize my studying efforts? I appreciate any help you can offer, or maybe some freebies Kaplan wants to send my way!!! 🙂 please let me know as well if there are any mistakes in the 6th edition book I should be aware of. Thanks

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  6. Martin

    I recently passed the Series 65 with an 86%. I used both the Kaplan manual and CD, and the materials from Passperfect. The Passperfect was well written but was lacking an index and a comprehensive table of contents at the front of the book. Kaplan has a much slicker product and probably contains more detail. I did notice a lot of errors in the Kaplan 2006 version and the Passperfect seemed to be more accurate. Kaplan’s CD is excellent and offers the ability to create customized practice tests so problem areas can be focused on. All things considered, I don’t know which product I would recommend. I’m glad I used both because I learned a lot from my own research of the regs when the two products seemed to conflict. I figured I would drop 5 to 10 points from my practice test scores so I practiced until I could average over 90%. I averaged 93 on 4 Kaplan 130 question practice exams so I dropped 7 points on the actual exam. If I had it to do over again and cost wasn’t an issue, I might buy the Passperfect manual and CD and also the Kaplan CD. The bottom line is, if you practice until you hit 90%, you will pass the 65 easily regardless of which product you use.

  7. John Leavitt

    I’m attempting to start a hedge fund, hired an attourney, but might require a specialist, enjoyed this blog on IA and series 65 input. I was really looking for a “Master feeder organizational chart” from you guys that I found on a prevous blog dated Dec 17, 08, Can you provide this?

    Thank you

    1. Hedge Fund Lawyer Post author

      Hi Brian,

      If you are a CTA (registered with the CFTC and a member of the NFA) and if you do not provide investment advice with regard to securities (including potentially money market funds), then you would not be deemed to be an investment adviser and accordingly you would not be required to take the Series 65 exam. If you reside in California and provide investment advice on securities to individuals then you will generally need to be registered as an investment adviser with the California Securities Regulation Division which requires you to have passed the Series 65 exam.

      Hope this helps.


  8. sam a

    I completed the Series 65 exam in 2003, did not practice as an investment advisor for a few years but am planning to get back into that as a line of business, do I need to take the exam again if I did not renew it on annual basis or can I just renew it going forward

    1. Hedge Fund Lawyer Post author


      If you simply took the series 65 exam but did not registered as an investment adviser with a state then you would most likely need to retake the series 65. However, each state has different proficiency requirements for representatives of investment advisory firms so you check to see what the requirements are for your state of residence. Please feel free to contact us at Mallon P.C.


  9. Craig

    Hello, I am a managing member of a two-person LLC which will be a registered IA in the state of California. Your blog entry says “In all states the prerequiste for such registration is that the firm have at least one investment adviser representative who has passed certain qualifying exams (the Series 65 exam or the Series 7 and 66) or have certain designations (CFA, CFP, etc).”

    However, the FAQ for the Calif. Dept. of Corporations ( says that “Each IAR, except those employed or engaged by an investment adviser solely to offer or negotiate for the sale of investment adviser services, must qualify by passing the examination(s) as specified in CCR §260.236(a).”

    Can you clarify whether both of us must pass the Series 65 (as suggested by the state’s FAQ), or it’s sufficient that only one of us pass the Series 65 (as stated in your blog entry)?

    Thanks very much.

    1. Hedge Fund Lawyer Post author

      Hi Craig,

      It sounds like both of the members of your firm will need to be registered. Generally those persons who take part in the management of the company will need to register as IA representatives. Generally in California only those persons who provide administrative type services are exempt from the registration requirements.

      I hope this helps.


      1. Gaurav

        I just took the Series 65 exam and passed. I am about to launch my hedge fund, and needed to pass the Series 65 in order to be an IAR to the LLC which will run the fund.

        I agree with all the points about studying for the exam that Bart brought up.

        For reference, I only used the “Pass Perfect” Series 65 book. I think it was an excellent book and it is organized exactly according to the outline of the test that FINRA has published. Based on studying the material and taking the practice exam, I passed the first time with a score of 85% (passing is now 72%).

        Here are some additional suggestions if you are using the Pass Perfect book:

        1) While the book is excellent overall, the presentation of the material on the Uniform Securities Act is confusing (this is a major topic on the test). The fact is that the Federal Acts (Securities Act of 1933, Sec & Exch Act of 1934, Investment Adviser Act of 1940, etc.) all came first — and set the foundation for the USA Act. However, the material is presented as USA Act first, and then the Federal Securities acts — it is very confusing and some of it is repetitive (while all the content is correct). So make sure to spend some extra time sorting all of this out.

        2) Make sure you take the practice tests on the PassPerfect book. I found them to be harder than the actual exam. Read the explanation for ALL the questions — even the ones you got right. I feel that these answers really helped clarify the material in the text.

  10. Belinda

    I have my S7 & S63. I need the S65 but I can take either the S66 or the S65. Of course I want to take the eaiser test. In the past I heard the S66 was easier but now with the new changes in 2010 I hear it’s more difficult. Any thoughts on which test is least I’m a working Mom with little time to study as it is.


    1. Hedge Fund Lawyer Post author


      You will probably want to take the Series 65. Please see Chuck’s comment in this post. I don’t think things have changed enough to make his comment inapposite.

      Good luck with the test and studying.


  11. todd

    i recently failed the 65 exam……when taking practice tests i found the questions were very much based on on information and not so much the scenario base……i found on alot of questions there were several correct but finding the most correct was difficult….even find the question within the questions got confusing…….i was doing a stead 85+ on practice exams but struggled and am embarrassed to tell my actual score….any advise?

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  17. Michael

    I just took the S-65 today and FAILED , by 3.9 questions! OMG! So close yet so far. I really did study for this stuff and none of it came easily. I am a former S-7, S-24, S-27 and S-53. None of them easy! Just lots of study time. Any remcomedations for me. I currently have STC manuals and looking for outside help. forums?

    Feel free to drop a line to me at the above email. Thanks and Good luck to all. I really do wish you well.

    1. Hedge Fund Lawyer Post author


      I also recommend the Kaplan materials. I have not reviewed all of the Series 65 materials out there, but I do think that STC and Kaplan are good. I have personally used Kaplan to study for all the series exams I have taken (except for the Series 34 because Kaplan does not have a study guide on the 34).

      Hope this helps.


  18. James

    I am taking my series 65 exam in 2 days and i terrified! 3 people already failed the exam by just few points. I’ve been using Kaplan Qbank and STC reading material. I’ve been averaging between mid 70’s to low 80’s. Is the Kaplan qbank questions similar to the real exam?

    1. Hedge Fund Lawyer Post author


      I thought so, but I took the exam about 5 years ago so I don’t know if or how the questions on the actual exam might have changed.

      Best of luck,

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  22. Alex

    I recently changed jobs and I need the Series 65. I had passed the exam in 1995 but let it expire when I did not need it. The first time in 1995 I barely studied and passed. Now in 2011 I failed the Series 65 by getting a 70 when 72 is the minimum. My worst section was Laws, Regulations and Guidelines. During my preparation I was blown away by the volume of material and the increase in regulations now in the 65 exam. I used the Kaplan materials and Q Bank but I ordered a book in June and then two weeks before the exam in July I saw that Kaplan had updated the study materials. I ordered the new materials and there were more regulations and materials added! I am scheduled to take the re-exam in two days. I am going through the questions and book more carefully and I am trying to make sure this time that I am prepared. But I am uneasy about the outcome as a result of my first attempt.

  23. Kyle

    I just took the series 65 after passing my 7 and 63. First of all the 65 has a very similar difficulty to the 7 and 63 for those who are wondering. However, in my case, even though I passed the 7 and 63 first attempt, I failed the 65 by a few questions. Frankly I believe I just got a bit lucky on the 7 and 63 and wasn’t so lucky on the 65. These tests in my opinion are not fair. They use lots of trick quests and confusing wording. Many of the questions are also quite subjective where I could make a case as to why multiple answer are correct, especially if I was given more information. There is also a luck factor because out of the 500 or topics they could ask you about you get only 50. So you may spend all your time making sure you know a particular topic you found important or weren’t doing well on in practice tests, only to find they don’t ask you a single question on the real things. In other words, there isn’t an equal weighting of test questions from each of the different chapters/topics. All I know is when I read a question and I know in my head what the answer is yet I get the question wrong, that to me is a bad test that isn’t truly testing you on your knowledge of the subject matter but instead is purposely written to trip you up. Same goes when I know all the definitions to the 4 multiple choice answers, yet I don’t which one is the answer to the question. My branch manager even looked at some practice test questions and said they were trick questions. Seriously FINRA!? Since there is a fee associated with each test attempt I believe there is a bit of motivation on FINRA’s part to purposely design the test to have high failure rates so that they can collect addition fees. It’s a scam.

    With regards to study materials I just ordered Kaplan’s materials which I have heard good things about so we’ll see. I previously used STC (for my 7,63, & 65). However in all 3 cases, I found myself guessing on at least 25% of the questions because either the question itself or some of the answers choices used terminology or addressed a topic that I had never even seen before. This lends itself to part of the luck factor I was talking about. I guess my first 2 tests I just got lucky and guessed correctly on the majority of that 25%. With that being said I can’t explicitly recommend STC even though I haven’t used anything else as of yet.

  24. Donald

    I’ve been preparing for the series 65 for a good while now between work hours. I clearly don’t want to take the test and fail, so I was wondering if anyone had any good free simulators or exam prep websites they knew about. I’m trying to use as many different formats, because I seem to get switched up when there are slight language differences between test I’ve taken. I have previous successfully passed the series 66, so feel that my Laws and Regs are in good order, but I am having difficulty with the Economics and Investment Analysis. I’m currently using the Kaplan 6th Edition to prepare for my test, but I am open to any ideas that anyone has to offer. I have also been using exam simulator, but I’m not sure if their information is current. I’m desperate to pass this exam because I’m currently working with a partner in establishing a money management firm out here in CA. Please any help would be greatly appreciated. feel free to email me at [email protected].

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