Questions | Answers

If you’re with a firm, the compliance officer files a U-4 form with FINRA.  If you’re an individual you complete a form U-10 and send it to FINRA with the appropriate fee.  You can also file the U-10 form online.  Refer to our Links page

Note that NASAA creates all the test questions, but they have an agreement with FINRA to administer the exams through Prometric Testing Centers or Pearson-VUE testing Centers.

Go to our Links page and click on “domestic and international test sites”.  That will take you to FINRA’s link showing all Pearson-Vue and Prometric testing centers.  There will be an 800 number that you can call to make your appointment and it will show you the address of the nearest center to you.

The test application for the Series 65 exam is $120.00

After FINRA processes your payment you’re logged onto the testing system and given a 120 day window within which you study for and take the exam.   It doesn’t take long after FINRA receives your documents to process them and you are mailed a notice/confirm.  Once you’re logged onto the testing system you can call Prometric or Pearson and schedule a testing date.

No.  There are no prerequisites in order to sit for the Series 65 exam.

Form U-4 has a box that can be checked that indicates the certification that you hold. The CRD computers then check databases of all active certificants prepared by the certifying organizations.

Most states will waive the Series 65 exam if you hold one or more of the following professional registrations:

• CFP - Chartered Financial Planner (CFP Board of Standards);
• CIC – Chartered Investment Counselor  (Investment Counsel Association of America);
• ChFC – Chartered Financial Consultant  (American College);
• PFS – Personal Financial Specialist  (American Institute of Certified Public Accountants); or
• CFA – Chartered Financial Analyst (Association for Investment Management and Research).

Be advised that you may still have to go through other state licensing requirements such as a background check, payment of fees, etc. Check with the state securities administrator for specific state rules.

No.  There are no citizenship limitations on taking the Series 65 exam.

If I’m not a U.S. citizen and don’t have a U.S. social security number how do I sign up for the Series 65 exam?
By using form U-10, and you don’t have a social security number, FINRA will assign an ID number to you for the purpose of taking the Series 65 exam.

Is there any allowance on the exam if English isn’t my first language?
FINRA can make special arrangements and grant you one extra hour to take the exam if English is not your first language and an allowance is necessary.   When you contact the exam center for your appointment ask the operator what steps need to be made in order to get the extra time.

Can I take the Series 65 exam outside of the U.S.?
Yes. You can find information on all testing locations on the Links page of our website.

The 3 hour, 130 questions exam covers:

• economic analysis (20 questions)
• investment recommendations and strategies (39) questions
• investment vehicles (26 questions)
• ethical and legal guidelines (45 questions)

89 of the 130 questions on the exam must be answered correctly.  This works out to 68.5%  The test can include an extra 10 questions that are “sample” questions that NASAA includes for their own research – but they don’t count against you if you miss them.

As long as you meet the waiting periods there is no limit.

If you only need more time to study an extension isn’t granted; if you don’t take the test within the 120 day period you’ll have to submit another exam and pay the fee again. If you’ve been injured or have been sick, an extension may be granted.

You do not need a sponsor to sit for the Series 65 exam.  Individual applicants (those not affiliating with an existing firm) can submit a U-10 form.  Just fill in “Not Applicable” where the form requests a sponsor.

No.  There are no refunds.

The reason you sit for the Series 65 exam is to charge fees for your services; if you sit for the 7 and 66 exams your intent is to charge commissions of the securities your clients buy and sell through you (and your firm) in addition (or in lieu of) fees for your services. People who have the 7 and 66 exams are generally securities brokers who want to add the ability to charge fees instead of commissions. To sit for the Series 7 exam you have to have a sponsor which is a FINRA (NASD) member firm that has intentions of hiring you. If you’re planning on setting up an RIA and being an Investment Adviser Representative and have no registrations, the state securities administrators want you to sit for the Series 65 exam. Few states sponsor individuals for the 7 and 66 combination.

No.  Just passing the Series 65 exam is only one of the steps in becoming registered as an Investment Adviser Representative.  Each state has its own requirements and they all must be met before you can solicit.  The test center will give you a copy of your scores.  Your record of passing the exam is also kept by FINRA’s “CRD” system for two years.  Keep a copy of your score sheet for your own records.

General steps are:

• pass the Series 65 exam
• pay an application and an annual registration fee to the necessary State(s)
• file a disclosure document (sometimes referred to as an “ADV”)
• receive a letter saying your are registered.

If you need help in creating a disclosure document, contact us.

No.  At the present time there are no continuing education requirements for those who have passed theSeries 65 exam.

No.   Other than the print out of your scores that you are given at the exam site, there is no other notification or certificate.

When you take an exam, your score is permanently recorded in the Central Registration Depository (CRD) maintained by NASD. Employers and regulators have access to the records

Usually every year NASAA reviews the data bank and creates new and revised questions based on changes in law, etc.   The questions are then entered into the database on a trial basis. The Series 65 has ten extra questions added to your exam but they do not count towards the final score.   NASAA is trying to determine if the questions are too difficult or too easy.   If they fit in, they’re added to the data bank – but the proper weighting of so many questions from each topic area is maintained when you sit for the Series 65.

After you pass the Series 65 test you have two years to become licensed (registered) with a state or the exam expires. Once you are registered, the exam remains effective as long as you stay registered. If you quit your firm, the compliance officer files a Form U-5 showing your end of employment and with that the state registration terminates as well. You then have two years to be re-employed and re-registered – otherwise the exam will show as “expired” in the Central Registration Depository (CRD) and you will have to sit for the exam again to become registered.

No. If you fail the Series 65 exam there is:

• a minimum of 30 days after failing the first exam before the second taking;
• a minimum of 30 days after failing the exam for the second time before the third taking;
• and a minimum of 180 days after failing the exam for a third time before the fourth taking (and each subsequent time).

This is basically the FINRA standard policy that NASAA has adopted

If a written request has been submitted by the securities administrator’s office in the state in which the individual is seeking to be licensed is submitted, a waiver may be given.

You can submit a U-10 form for the Series 65 exam and sit for it as soon as you’re application is processed and your 120 day window is established. The waiting period applies only to the specific exam you did not pass.

Yes. The company can be more restrictive than state or federal rules if it chooses.

Many states require agents, solicitors, and those receiving referral fees to pass the 65 and register with the appropriate state administrators. It’s best to contact the state regulator where you reside and solicit to know the current rules.

Generally, the firm you are leaving will file a form U-5 ending your employment and registration. The firm you join will file a form U-4 reregistering you. As long as you haven’t gone more than 2 years between jobs the transfer is usually smooth. There may be application fees to reregister with the new firm.

Yes. After two years of not being licensed in a state requiring the Series 65, your exam will be shown on the CRD record as “expired.”

If you’ve been working as an investment adviser representative in a state that doesn’t require registration, most states have discretion to waive the requirement to retake the exam. Usually a statement from your employer regarding your duties is necessary.

If you’re registered in multiple states but live in a state that doesn’t require the exam, and the others do, then you’ve met the requirement of being continually registered.

Series 65 NASAA exam questions are copyright protected and are not disclosed to the public.

The “Series 11 Assistant Representative – Order Processing” category of NASD registration applies to  persons associated with an NASD member firm who accept telephone or other communications from the public for the purposes of providing current securities quotations and accepting unsolicited customer orders for submission to the normal order execution operations of the member.

A Series 11 Assistant Representative-order processing registrant may conduct the above mentioned tasks only on the premises of the member, must be under the direct supervision of a registered principal, and may not receive extra direct or indirect compensation for the number or size of transactions effected. In addition, an Assistant Representative – Order Processing registrant is prohibited from:

• rendering investment advice or opinion
• making recommendations
• effecting transactions in securities markets on behalf of the member firm
• accepting or opening new accounts
• pre-qualifying potential customers
• effecting transactions in municipal securities or direct participation programs
• dually registering as a representative or principal.

There is no prerequisite to sit for the exam. The test fee is $60.00 and Form U-4 is used to apply. The test has a 1 hour time limit and 50 questions.

The Series 11 Assistant Representative – Order Processing exam covers the following topics:

The Series 22 exam is designed for people who wish to work with limited partnerships only, often referred to as direct participation programs (“DPPs”) or tax shelters.

There is no prerequisite to taking the exam, there is a $75.00 test fee using application form U-10 supplied by your sponsor) and there is a 2 ¼ hour time limit to the exam.

Topics on the exam are:

The Series 24 Exam (General Securities Registered Principal) is 3 1/2 hours long and has 150 test questions. 70% of the total is passing. The fee for sitting for the Series 24 exam is $95.00 and application for U-4 is used.

The Series 24 exam is required by FINRA for any person who manages or supervises representatives in investment banking, training, solicitation, as well as the general conduct of business operations.

The Series 24 exam prerequisite is having passed either the Series #7 (General Securities Registered  Representative) exam or the Series #62 (Corporate Securities Limited Representative) exam.

Series 24 Test Topics:

Stockbroker, financial consultant, financial advisor, securities broker — these are all general terms used by individuals and brokerage firms alike, to refer to a regulatory term of “registered representative” — or shortened to “registered rep”. A registered rep is an agent of a broker/dealer who is paid commissions on the trades placed through the firm on behalf of their customer.

A stockbroker who wants to offer general (or a “full line” of) securities would sit for the Series 7 exam. The series 7 exam was created by the New York Stock Exchange and is administered by the Financial Industry Regulatory Authority (“FINRA”). Most Series 7 reps are referred to as a “stockbroker”.

Registered representatives, however, may want to “limit” their registration and offer only a specific group of securities. As an example, “mutual funds”, or investment company products representatives, sit for the Series 6 exam — and only offer comments on mutual funds; Series 22 representatives only offer direct participation programs, and Series 62 representatives only offer corporate securities. Some people sit for the Series 6 or Series 62 exam to get into production faster, and then take the Series 7 later on.

Stockbrokers often offer commodity futures, commodity limited partnerships or “managed futures”. A separate registration is required, however, and that is having passed the Series 3 exam and being registered with the National Futures Association (“NFA”) as an “Associated Person”. The securities firm that the stockbroker is registered with must also be registered with the NFA / CFTC in order to offer futures products.

You need to interview with the kinds of firms that you feel will provide you with the best opportunity to be successful and offer the kinds of securities you would like to work with. If you’re looking to lower your trading commissions or just to trade your own account, most firms will not be interested in hiring you.

Firms are looking for individuals who can create commissions for the firm. If you’re well contacted or are “sales oriented” and can generate new leads and accounts, firms like Merrill Lynch, Smith Barney, Morgan Stanley, etc., will be a good fit — since your income will depend upon the commissions you generate.

If you want to be “service oriented” and receive a salary, you will want to interview with firms like Fidelity Funds or Charles Schwab. In either case, arrange directly for an interview with the branch/location where you would like to work; generally, brokerage firms will not pay a relocation allowance for a new representative. If the firm wants you — they will sponsor you for the Series 7 exam. Most FINRA exams require a sponsor in order to sit for the test.

Some think having passed the Series 7 exam prior to interviewing makes the candidate more likely to get a job as a stockbroker. It might — if two candidates are interviewing and are identical in all skills except one has passed the Series 7 and one hasn’t. What the firms are really looking for are the right skills.

There are no educational or citizenship requirements to sit for the Series 7 exam; there is an age requirement where you must be of “legal age” and this is established by each state — generally being 18 years. Keep in mind, the brokerage firm that hires you may have more restrictive requirements (for example a college degree and 21 years of age).

After having passed the necessary exams you must complete your registration by having a background check, fingerprint card, register with the FINRA/NFA, and register with the Securities Commission of each state that you will do business in. In securities registration there are two levels of registration: federal and state. On the federal level you take the Series 6, 7, 62, etc., and then on the state level the State Securities Administrator will generally require you to have passed the Series 63 exam.

The application form for the FINRA exams that the Broker/ Dealer uses is called the U-4 form. If the firm you are going to work for is not an FINRA-member firm (for example a Registered Investment Adviser) a form U-10 is usually used.

FINRA administers exams for its own requirements, the National Futures Association (NFA), and the North American Securities Administrators Association (NASAA) through test sites run by Prometric Test Centers and Pearson VUE Testing Centers. Test Centers are located in many cities throughout the U.S. NFA exams include the Series 3, 30, 31, and 32. NASAA exams include the Series 63, 65, and 66.

A CERTIFIED FINANCIAL PLANNER™ Professional helps individuals determine whether and how they can meet their life goals through the management of financial resources. To do this a CERTIFIED FINANCIAL PLANNER™ Professional analyzes where the individual is financially, where they want to go, and how do they get there.

In most cases a CERTIFIED FINANCIAL PLANNER™ Professional analysis and recommendations are provided in a written financial plan. The CFP® oftentimes coordinates the implementation and monitoring of the plan.

Income is generally fee-based.

The CERTIFIED FINANCIAL PLANNER™Certification exam format is determined by the CFP® Board of Standards. The exam is given over a two-day period, Friday and Saturday, for a total of 10 hours. The CFP®  Exam is a rigorous exam that tests knowledge and application. There are currently 106 job knowledge Requirements specified by the Board of Standards — and these topics are tested on in the CFP® exam.

You must contact the CFP Board of Standards to register for the exam. The purchase of study materials does not register you for the exam. The web site is:  www.cfp.net The telephone number is: 202-379-2200

Many CERTIFIED FINANCIAL PLANNER™ Professionals affiliate with FINRA member firms (i.e., brokerage houses) and become Registered Representatives (i.e.. “stockbrokers”). This allows the CFP® to receive commissions on the securities they buy or sell on behalf of their clients. Accordingly, they go on to take the NASD Series 7and Series 63 exams.

A CFP® may form their own Registered Investment Advisor (RIA) firms. In this instance they charge a fee hourly or percentage of assets under management) for their advice and are required to register with their state securities commission, create a disclosure document (i.e., “ADV”), and pass the Series 65 exam.

Note that the Series 66 exam is treated as the equivalent of the Series 63 and 65 exams if the registrant holds the Series 7 registration.

The Chartered Financial Analyst registration is a globally recognized standard for measuring the competence and integrity of financial analysts. The curriculum develops and reinforces the knowledge of investment principles. Three levels of examination (one test/level each year for three years) measure the candidate’s knowledge. The exam is given the first Saturday and Sunday of June in over 70 nations.

Exam Requirements: Candidates must complete the exams sequentially and may sit for only one exam each year. Candidates who fail repeat that level the next year. Level 1 consists of multiple-choice questions, Levels 2 and 3 consist of problems, cases, essays, and a small number of multiple-choice questions.

Application processing takes about three weeks with the final deadpline generally being March 1. Applications can be filed over a specific time period with certain cut-off dates; the closer to the actual exam, the more expensive the application fee is.

Here is their web site: http://www.cfainstitute.org/

A Registered Investment Adviser (“RIA”) is an entity who, for compensation (in any form), engages in the business of advising others, either directly or indirectly, of the value of securities or of the advisability of investing in securities. They receive a management fees and do not receive commissions (“RIAs receive fees, stockbrokers receive commissions”).   Incentive fees can be charged if certain conditions are met.

To become an Registered Investment Adviser you must register with the Securities and Exchange Commission (SEC), if you manage $25 million or more.   If you manage less than $25 million you are still under the regulatory control of the Securities and Exchange Commission but SEC oversight is delegated to the State Securities Commission (or other regulatory agency) in your state of domicile –  and with each state where you will solicit business (subject to “di minimus” exemptions).

Usually, Investment Adviser Representatives (“IARs”) of any Investment Adviser must register in each state they solicit or do business in.

Registration as a Registered Investment Advisor is oftentimes a prerequisite to setting up a Hedge Fund.  If the hedge fund trades commodity futures contracts, registration as a Commodity Trading advisor may also be required.

Exam Requirements:

There is no exam requirement by the Securities and Exchange Commission at the federal level for the RIA entity.  “IARs” (Investment Advisor Representatives), however, generally have to pass an exam;   each state has its own specific requirements.

Although State requirements are becoming more uniform, you must contact the respective state agency that supervises investment advisers; ask them for the proper registration forms and procedures, and which, if any, exam is required.

The state agency will provide the test application form (generally a “U-4″ or a “U-10″ form) along with a registration packet for your completion.

Generally, states require NASAA’s Series 65 Uniform Investment Adviser exam.  Some states require the principal of the RIA to pass the exam with a score greater than 70%.

An alternative to the Series 65 is the combination of the Series 7 and Series 66 exams.  The Series 66 is only good in conjunction with the Series 7;  most states will not sponsor a candidate for the Series 7. The 7/66 combination is generally used by an employee of a securities brokerage firm who is also registering as an investment adviser.  The Series 66, essentially, equals the combination of the Series 65 and Series 63 exams.

A sponsor is not required to take either the 65 or 66 exams — but just passing the exam is only one step in the procedure.  You must complete the registration process before you can solicit accounts!   Note that the Series 66 is not valid until you pass the Series 7 exam.

Exams are administered Monday through Friday on computers by the Prometric and Pearson VUE testing centers located in cities throughout the U.S. and in certain overseas locations.

The Series 65 exam requirement may be waived if the applicant holds certain professional designations, i.e., Certified Financial Planner (CFP), Accredited Personal Financial Specialist (APFS), Chartered Financial Consultant (ChFC), Chartered Financial Analyst (CFA), or Chartered Investment Counselor (CIC).

If you are going to register in more than one state you must meet the requirements of each state.

To become a Futures Introducing Broker you:

• Set up a clearing arrangement with a Futures Commission Merchant (“FCM”)
• Pass the Series 3 exam
• Join the NFA as an Introducing Broker

The NFA requires an IB to have a net worth of $45,000.00. If the proposed IB doesn’t have the capital necessary, it may establish a “Guaranteed Introducing Broker” where the clearing FCM “provides” the equity.  As a guaranteed IB, the IB can only clear through its guaranteeing FCM. An independent IB (one that meets the net worth requirement) can establish clearing relationships with multiple FCMs.

You can study for the Series 3 exam while your application forms are being created and processed — but your registration isn’t complete until you finish all steps and show proof of passing the Series 3 exam.

What is a Commodity Trading Adviser and how do you become one?

A CTA is an individual or organization which, for compensation or profit, advises others as to the value of or the advisability of buying or selling futures contracts or options on commodity futures contracts.

Providing advice indirectly includes exercising trading authority over a customer’s account (“discretionary control”) as well as giving advice through written publications or other media.

Every registered CTA must give prospects a Disclosure Document. The Disclosure Document is intended to provide information customers need to make informed decisions – it’s basically two parts. One is a the background, business location, principals, advisory agreement, etc., and the second part is the performance history of the CTA.

To become a CTA you:

• Pass the Series 3 exam
• Join the National Futures Association (“NFA”) as a CTA (a $200 application fee and an annual registration fee of $750 per year)
• Submit your Disclosure Document to the NFA for registration

You are exempt from registration if you have provided advice to 15 or fewer persons during the past 12 months and do not generally hold yourself out to the public as a CTA.

A CTA is required to file the following:

• A completed online Form 7-R
• Series 30 exam or sponsorship by a broker-dealer and proof of having met the branch office manager requirements of FINRA