If you plan to sell securities, you will need to get a license through the Financial Industry Regulatory Authority (FINRA). The exact type of license that you need to get depends on your role and what securities-based products you would like to sell.
Securities licenses can be grouped into two categories: federal licenses offered through FINRA and state licenses offered through the North American Securities Administrators Association (NASAA). The Series 65 license covers state-based information for investment advisor representatives.
What is the Series 65 License?
The Series 65 license is a state-specific securities license that allows individuals to market and sell securities and give financial advice related to securities. The Series 65 is a NASAA exam but is administered by FINRA. Preparing for this exam with a study course is often the first step to getting your Series 65 license.
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You will also need to pass one of the federal FINRA exams to become fully licensed to market and sell securities. The two most common FINRA licenses for financial services industry professionals are the Series 6 and Series 7.
Who Needs a Series 65 License?
Also known as the Uniform Investment Adviser Law license or exam, the Series 65 is commonly held by financial advisors and some insurance agents. Once you have a Series 65 license and other required FINRA licenses, you can market and sell securities to your clients as well as give advice about what clients should purchase and their overall financial strategy.
What Does the Series 65 License Allow You to Do?
The NASAA Series 65 license is also known as the Uniform Investment Adviser Law Examination because it allows licensees to provide financial investment advice.
What Can I Sell with a Series 65?
The Series 65 exam covers a variety of investment vehicles and allows license holders to charge a fee for their financial advice and services including securities-based products. The Series 65 was designed to make sure that professionals offering financial advice were licensed to do so and knew about the products and regulations.
Keep in mind that you must have another FINRA license (usually the Series 6 or Series 7) to be able to market and sell securities. The Series 65 alone does not allow you to sell securities.
Other Securities Licenses
You will need to get other FINRA licenses to market and sell securities. The most popular securities licenses include:
- Securities Industry Essentials (SIE): This prerequisite is designed to test your basic knowledge of the financial services industry. It is not a FINRA license but is required before you can register for the Series 6 or Series 7 exams.
- FINRA Series 6: This license allows you to market and sell grouped securities-based products and is most commonly held by insurance agents (especially life insurance agents) and financial advisors.
- FINRA Series 7: This license allows you to market and sell the widest variety of securities-based products and is considered the most comprehensive FINRA securities license. It is commonly held by financial advisors and some insurance agents.
- NASAA Series 63: This license allows you to conduct purchase and sale transactions of securities-based products. It is commonly held by insurance agents and bankers. The Series 63 and Series 65 are both regulated by the same authority and cover state regulations.
- NASAA Series 66: This license combines the Series 63 and Series 65 material under one NASAA license. Series 66 license holders do not need to take the Series 63 or Series 65 but can conduct transactions and give financial advice.
Series 65 Requirements
You do not need to be sponsored by a FINRA-member firm, company, or organization to take the Series 65 exam. Other securities licenses, including the Series 6 and Series 7, do require sponsorship, however.
If you are sponsored, you will submit a Form U-4 through your employer to open your Series 65 exam registration. If you are not sponsored, you will open your exam registration as an individual directly with FINRA. You will receive a 120-day window during which you can take the Series 65 exam.
The Series 65 exam costs $175. If you have a sponsoring firm, they may cover the exam registration and test prep course fees for you.
After you pass the Series 65 test, you will complete your license application with a background check and paying state fees. During the licensing process, you can check the status of your license through FINRA’s Central Registration Depository (CRD). FINRA also updates the active/inactive status of licensees in the CRD when they change employment.
How Long is the Series 65 Good for?
The Series 65 license does not expire, as long as you continue to work for a sponsoring firm in the financial services industry. If you leave your sponsoring employer, you must find a new sponsor within two years to keep your license current.
Series 65 license holders do need to meet continuing education requirements to show that their knowledge and proficiency includes new standards, regulations, and information. Continuing education for securities licenses includes a regulatory element training through FINRA and a firm element program through the employer.
How Hard is the Series 65 Exam?
The Series 65 exam includes 130 scored questions and 10 unscored pretest questions. The exam is broken into four main sections of content.
- Economic Factors and Business Information (20 questions)
- Investment Vehicle Characteristics (32 questions)
- Client Investment Recommendations and Strategies (39 questions)
- Laws, Regulations, and Guidelines Including Prohibition on Unethical Business Practices (39 questions)
You have three hours to complete the test at an individual testing station. If you are unfamiliar with the format or have never taken a computer-based exam at a testing center before, a Series 65 exam prep course and practice test can help you prepare.
Take a practice exam under conditions as close to the real test as possible. This means turning off your personal electronic devices, closing your notes, and setting a timer. This will give you the most realistic idea of how prepared you are for the test.
What is the Passing Score for the Series 65 Exam?
You must answer at least 72% of the Series 65 exam questions correct to pass. This means that you have to answer at least 94 questions, although they can be from any of the sections. The Series 65 exam content outline covers all of the testable information. A test prep course can help you maximize your chances of exam success on the first attempt.
Is the Series 65 or Series 66 Harder?
The Series 66 license allows licensees to perform all of the functions covered under the Series 63 and Series 65 exams. At 100 scored questions and $165 per attempt, the Series 66 test is shorter and less expensive than the Series 65. The biggest factor to consider when registering for a securities exam is what your career path may look like after becoming licensed.
If you want to conduct transactions as well as offer financial advice, getting the Series 66 license that covers both can save you time and money. If you only need to perform one of these functions for your position, you may need to get the Series 63 or Series 65 instead.
Talk to your manager or professional mentor to help decide which securities licenses are most beneficial for your current position and any future professional goals that you have. They may even be willing to pay for your exam or test prep courses and provide work time to study.
Getting Your Series 65 License
Once you are ready to begin or advance your career in the financial services industry, getting your securities licenses in an important step. The Series 65 license will allow you to provide valuable financial advice about securities-based products to your clients.