Series 65 License Frequently asked questions / FAQs
1) Why should I get a series 65 license ?
There are a large number of reason why candidates seek to become series 65 licensed. Some are entering the financial services business for the first time and are just starting out in a new career. Others are more established financial service professionals and are seeking to expand their product offerings to their clients. A series 65 license is required if a registered representative is offering managed account platforms to clients. Many managed accounts charge asset based fees and allow agents to share in the fees. As such, these representatives will need to obtain a series 65 license. If you are joining a stand-alone advisory firm, your employer as a condition of employment or promotion, will require you to obtain the series 65 license to function in your new job. Your firm’s compliance department, home office or HR will notify individuals directly or through their manager as to the time frame for taking the exam
2) What will I be able to do with a series 65 license?
A series 65 license will allow you to become registered an investment adviser representative. This license will allow you to represent an investment advisory firm offering advice to clients regarding the purchase and sale of securities, the value of securities and or in the creation of financial plans. This advice is offered for a fee, and the series 65 license will allow you to share in the fees charged by the advisory firm. Most fees are charged as a percentage of assets in the account, known as assets under management or AUM. Other fees can be charged in the form of hourly fees, subscription fees for news letters or a flat fee for the creation of a financial plan. Regardless of how your advisory firm charges fees, a series 65 license will be required. Your series 65 license will not allow you to earn commissions for executing orders for stock, bonds or mutual funds.
3) How hard is it to get a series 65 license ?
The series 65 exam presents challenges for most test takers in one area or another. The information tested covers complex topics relating to portfolio management, client recommendations and strategies and the powers of the state securities administrator. To be successful and become series 65 licensed you must demonstrate that you have mastered these areas. Every person who sits for the series 65 exam is coming from a different background. What one person finds easy to master, another may find very challenging. Historically the advanced portfolio concepts, adviser registration, and the areas relating to the application of the Uniform Securities Act tend to be among the most challenging areas. You should prepare for the exam by reading a textbook completely with a highlighter. You must read the book, there are no shortcuts and students need to understand this. You must clear your schedule, shut off your phone and focus. In addition to obtaining the knowledge required by the exam, you must master the application of the information by taking as many practice questions as you can. We recommend at least 60 – 70 hours of preparation to ensure you pass your series 65 exam and become licensed to represent a registered investment adviser.
4) Is my series 65 license transferable ?
The answer is, that while it feels like your series 65 license is indeed transferable, in actuality it is not. If you want to change firms, your series 65 registration / license along with all of your other registrations must be terminated by your employer. If you are registered at a FINRA member firm, Your former employer / the firm that you are leaving will fill out and submit a Form U5 to FINRA. This will terminate your employment and your registration with that firm. When you arrive at your new firm you must fill out and submit a new Form U4. This will begin your registration with your new firm and your series 65 license will become active at your new firm upon receiving notice from FINRA and the states where you conduct business. If you are associated exclusively with a registered investment advisory firm, your firm will initiate and terminate individual registrations through the investment adviser registration database or IARD. It is important to note that passing the exam does not grant you a license. Your license will only become effective once you have received notification from each state where you plan to conduct business, that you license has become effective.
5) How much does it cost to get a series 65 license ?
Obtaining a series 65 license will require many people to make an investment in their professional development. Your series 65 license will qualify you as an investment adviser representative. It does not make you a registered investment adviser or RIA. Only the firm you work for will be the registered investment adviser. Many people who obtain a series 65 license enjoy lucrative and successful careers in the investment advisory industry. The good news is, for those who absorb the costs, they are relatively low when compared to other types of training, certification and college expenses. Some employers pick up or reimburse the costs of training and the testing and registration fees. Even for these people many obtain additional resources such as additional test questions, books or videos to ensure they pass their exam and become licensed. For those who have to pay all of the expenses out of pocket, it usually only costs a few hundred dollars for the testing fees and quality training materials. . You will find that obtaining a series 65 license opens many doors for you throughout your career.
6) What are the continuing education requirements once I have a series 65 license ?
While NASAA, the North American Securities Administrators Association is contemplating enacting continuing education requirements for investment adviser representatives, at the present time there are no continuing education requirements. That being said, if you hold a FINRA license such as the series 6 or 7, you will be required complete the FINRA mandated continuing education requirements for that license.
7) Will I need to obtain any other license to be fully registered ?
Your series 65 license is most likely the only license you will need if you plan on conducting business exclusively at a stand-alone investment advisory firm. If you wish to represent a broker dealer and to receive commissions on securities transactions you will be required to obtain a series 6 or 7 if you have not already done so. We hope that this answers many of your frequently asked questions about the series 65 license. If you have any additional questions please call or email us.
Good luck on your exam.
The Securities Institute of America, Inc.