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Anyone with a desire to work as a licensed investment adviser representative in the United States must begin the process by successfully passing the Series 65 examination administered by the Financial Industry Regulatory Authority (FINRA) and developed under the auspices of the North American Securities Administrators Association (NASAA). A minimum competency exam, the Series 65 test is intended to distinguish those who possess an acceptable level of knowledge in relevant topics from those who lack it. To obtain a Series 65 license, candidates must achieve a passing score on the Series 65 exam, remit all application and registration fees to applicable state regulatory authorities, file necessary disclosure documents, and wait to receive formal acceptance and acknowledgment of certification.
The first major step toward obtaining a Series 65 license is applying to sit for the Series 65 exam. No formal prerequisites for the exam exist, and candidates are not required to secure a sponsor. People who are already affiliated with an investment firm simply file a different application form than those who are not. Test preparation and concept review is recommended for all applicants, and NASAA has created a study outline that is available to all candidates.
There are 140 multiple choice questions on the Series 65 exam, and 130 of them are used to determine a candidate's success. The test lasts for three hours and includes questions in the areas of client investment recommendations and strategies, investment vehicle characteristics, legal guidelines, ethical rules, economic factors and business information. A score of at least 72 percent is required for passage of the exam, which allows a candidate to move forward to the next step in securing a Series 65 license. Those who do not achieve a passing score must observe FINRA-designated waiting periods before registering for subsequent exam attempts, though there are no limits on the number of times the exam can be re-taken.
After clearing the exam hurdle, those seeking a Series 65 license must fulfill any and all additional requirements specific to the securities regulators of the state in which they plan to work. This process varies by jurisdiction but is likely to include payment of application and registration fees, and submission of disclosure documentation. It may also include undergoing a thorough background check. Once those steps have been completed, a prospective recipient of a Series 65 license must wait for final notification of registration as an investment adviser representative. Once that has been received, the successful applicant can begin advising clients on investment strategies and account management.
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