Series 66 Test Guide

By: Erin Hasinger, Tests.com

Series 66 is an exam used to grant certification to financial professionals to work as securities agents and investment advisers. Created and administered by the Financial Industry Regulatory Authority, or FINRA, the Series 66 exam must be taken in conjunction with the Series 7 exam in order to apply for registration with a state. The exams may be taken in any order, but both must be passed in order to be able to register.

Also known as the Uniform Combined State Law Examination, Series 66 is accepted by all states as the exam for qualification to register as either a securities agent or investment adviser.

The exam includes 110 multiple-choice questions, 100 of which count toward the final score. The other ten are pretest questions that are distributed randomly throughout the test. Seventy-five of the 100 questions must be answered correctly in order to receive a passing score of 75 percent. Test takers have 150 minutes, or two-and-a-half hours, to complete the exam.

The Series 66 examination includes questions on the following topics:

-  Economic Factors and Business Information (5 questions), including financial reporting, quantitative methods and types of risk

-  Investment Vehicle Characteristics (15 questions), including fixed income securities valuation methods, derivative securities, alternative investments and insurance-based products

-  Client Investment Recommendations and Strategies (30 questions), including type of client, client profile, capital market theory, portfolio management styles and strategies, portfolio management techniques, tax considerations, retirement plans, ERISA issues, special accounts, trading securities and performance measures

-  Laws, Regulations and Guidelines with Prohibition on Unethical Business Practices (50 questions), including state and federal securities acts and related rules and regulations, ethical practices and fiduciary obligations

Firms can register a candidate for an exam using the U-4 form, available at finra.org. Individual test candidates can also register themselves for the exam using the U-10, which is also available from finra.org and must be completed electronically. The exam fee (as of 2010) is $128, payable either by the test taker or the test taker’s sponsoring firm.

Once a candidate is registered for the exam, they have 120 days in which to schedule the exam. Tests are given at test centers nationwide, such as Prometric and Pearson. Test centers can be found in cities in all US states as well as in countries throughout the world.

At the completion of the exam, test takers will be able to see their overall score as well as scores from each individual section. Test takers do not receive a certificate of completion or an official score report in the mail following the test. Test scores are instead permanently recorded in FINRA’s Central Registration Depository. Once an employer files a U-4 to register a new employee, the system checks one’s records and issues an automatic license, so long as one has met all of their state’s requirements.

Test takers who do not pass the exam may schedule a retake of the exam after a 30-day waiting period. After a test taker has failed the exam three times, 180 days must pass before they are able to schedule a fourth (or subsequent) exam.

For more information on the Series 66, please see the Series 66 Test Directory.

Source: North American Securities Administrators Association