Hedge fund managers who must register as investment advisor representatives with the SEC (through notice filings) or the state securities commission will need to have the proper FINRA exam licenses. Generally this means that the hedge fund manager will need to have passed the Series 65 exam within two years of registration (or the license must not have been inactive for two years prior to the registration).
However, if a manager has a Series 7 exam license he will only need to take the Series 66 exam instead of the Series 65. This would generally be a good idea because the Series 66 exam is easier than the Series 65 exam and managers should be able to pass the Series 66 with less effort than the Series 65. I have detailed below the different requirements for the Series 65 versus the Series 66
Series 65 Exam
- 140 multiple choice questions
- 10 pre-test; 130 count towards score
- 180 minutes to pass the exam
- Must achieve a 68.5% to pass
- Test covers: economics and analysis; investment vehicles; investment recommendations and strategies; and legal and regulatory guidelines, including prohibition on unethical business practices.
- NASAA test outline link.
Series 66 Exam
- 110 multiple choice questions
- 10 pre-test; 100 count towards score
- 150 minutes to pass the exam
- Must achieve 71% to pass
- Test covers: much of the material included on the Series 65, but it does not include the product, analysis and strategy questions that are a large part of the Series 65.
- NASAA test outline link.
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I must take issue with the statement that the Series 66 exam is easier to pass than the Series 65 for those with a Series 7 registration. Our experience with many thousands of students who have taken these tests indicates differently. An applicant with a Series 7 license will almost always have an easier time passing the Series 65 than the 66 and there are several obvious reasons for this.
1) Passing score on the 65 is only 68.5% while it is an industrywide high requirement of 71% on the Series 66.
2) The “extra” material added to the Series 65 is on subjects very familiar to most Series 7′s. For example, there are questions on common and preferred stock, mutual funds, options and limited partnership programs; all topics thoroughly covered on an Series 7 training program. There is extensive coverage of economics and analysis, but very little that is not part of the Series 7 exam.
3) 80 of the 100 questions (80%) of the Series 66 are based upon state and federal laws, while only 45 questions (35%) of the Series 65 cover this topic. Because these questions deal with the intracies of the law, these are typically the most difficult questions for students to handle.
The real advantage in taking the Series 66 is that, for those who will be selling securities as well as giving advice, is that it “kills two birds with one stone”. That is, instead of being required to sit for both the Series 65 and the Series 63 (Uniform Securities Agent State Law Examination), taking the Series 66 covers one for both.
Chuck Lowenstein
Senior Editor – Securities
Kaplan Financial Education
I took my Series 66 today and unfortunatley did not pass with a 70% score. The questions were very difficult and 70% of the exam were unrelated to the test material and CD’s training I did with the STC material. Is there other material I can study that is more summarized and focused that will guarantee my passing this test the 2nd time around? There were even some questions that were NOT in my study material at all and I had to guess at those questions.
I am very dissappointed with the test questions in this exam.
Any suggestions you can give are greatly apprecited.
Thank you,
GM
I am having to retake the series 66 as I scored a 70 on it and thus did NOT pass. I concur with Gloria that a bulk of the questions seemed to be on topics I had never seen using the Kaplan study guide. I passed my series 7 the first time but I am very much struggling with the 66.
Gloria,
Just study the STC material. Series 66 is easy. I don’t know what you’re talking about.
I used STC to study for the Series 7 and Series 66. I scored a 97% on the series 7, so I’m fairly intelligent. STC did not adequately prepare me for the Series 66. While I passed, and scored a 89%, I felt that numerous questions on the 66 were not reflected in the STC materials — and I knew the STC questions pretty well. So my recommendation would be to use STC for Series 7 prep, but review a different test preparer for the Series 66.
I also used STC for my Series 66 test, which I failed horribly this morning. I have to agree with both Gloria and Trevor – there were things on the test that we not in any of the study material. I also used study prep on Investopedia’s website. While their questions were different from STC’s, they weren’t on the actual test either.
Laura I just failed myself 2 days ago, I was scoring in the high 80′s with the STC material and got a 65 on the actual test, this is the new test as well where you need to score a 75% now to pass. I saw many questions that were completely foreign to me which I had to guess on, I will be looking at other alternatives to study this material, but I dont know where to look for one with the new revised questions.
Used STC for S66 this morning. Passed with a score in the low 90s. Started studying for the exam 3 days ago. The STC material sucks hard. Material is wordy, misleading and repeatedly contradicts itself. The question bank is even worse. Very frustrating.
Used STC for S7. Passed in the high 90s. Material was drastically different than the S66.
Just out of curiosity, how can anyone actually fail the S66? FINRA exams are a joke even if you are handicapped with crappy STC material. If you fail a FINRA exam, you should be barred from the industry or at least banished to back office positions.
I have the 7, 24, and 63 from over 10 years ago. I now want to be an RIA and need either the 65 or 66. I have a strong background in investments, but it has been a long time since I had to take an exam. Which do you suggest and what is the best study material?
Hi Robert,
First, I would recommend you take the Series 65 rather than the Series 66* because of the recent changes to the exam. Next, I think that both Kaplan and STC have strong products so I don’t think you can go wrong with either. The most important thing is that you are able to consistently pass the practice exams provided by the training company.
With all that being said, I personally used the Kaplan guides to pass all of my exams and I have no problems recommending them. There are some guides that I would stay away from based on the experiences with my clients and if you want the names of those, you can email me directly. However, I think both Kaplan and STC would be good choices.
Hope this helps and good luck with the exam.
Best,
Bart
* Note: since your Series 7 is likely expired, you would need to take the 65 regardless.
Thanks Bart. Actually, my 7 is still active since I left my last job just 6 months ago, but it sounds like that does not change your opinion.
Robert,
No, I would not change my opinion. Too many people have been failing the Series 66. It sounds like NASAA might need to take a look at the recent revisions they have made to the exam.
Best,
Bart