IA Exams Pass Rates Expected to Plummet
The North American Securities Administrators Association (“NASAA”) recently announced that the two central investment advisor exams (the Series 65 and the Series 66) will become even more difficult. Starting January 1, 2010 candidates will need to attain a score of 72% in order to pass the Series 65 exam and a 75% in order to pass the Series 66 exam. NASAA did not make any statements on its website or at its Annual Conference earlier this year about the change or the reason for the change.
I had a chance to talk with Chuck Lowenstein of Kaplan Financial Education about the announcement. “The exams have been oddities,” said Lowenstein, “everything else in the business requires a 70% to pass and the 65 had been kind of weird at 68.5% and the 66 as well at 71%. With these new numbers, NASAA has entered new territory. I suspect pass rates will plummet, unless they feel that the new exams will be so much easier (never happened in the past) that they need to bump up the minimum.”
Chuck went on to discuss the likely future performance for people taking the exams. “Based on our students’ performance, this will have a devastating effect on the overall pass rate. A significant percentage of exam takers pass with little room to spare and bumping the requirements by 4 or 5 questions on these exams (the 68.5% on the 65 was 89 correct – 72% is 93.6 questions so they’ll either round up to 94 or down to 93, that has not yet been disclosed) is going to catch many exam takers.”
We do not recommend that exam takers study any differently for the exam, but we urge all potential exam takers make sure they are adequately prepared. If an applicant does not pass the 65 or 66 on the first try, they will need to wait 30 days to take the exam again which will obviously have an effect on the timing of a hedge fund launch.
For more information please see NASAA’s post on the Series 65 and Series 66 exams.
Thank you to Chuck Lowenstein for bringing this issue to my attention.
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Other related hedge fund law articles:
- Series 65 Exam
- Differences between the Series 65 and Series 66 Exam
- Overview of Hedge Fund Investment Advisors
Bart Mallon, Esq. of runs the Hedge Fund Law Blog. He can be reached directly at 415-868-5345.
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Just want to thank you for this information. I need it for the next time Im taking the exam.
helena
Hi Helena,
Good luck with the exam and please let us know if we can help you with anything.
Best,
Bart
I took the S66 yesterday. I was scoring 78 to 80% on the practice exams and felt prepared. I failed with a 67%, Ugh! It was a total disappointment after studying for hours and hours. I was using STC.
Sometimes, I feel like it might depend on the test you end up with, but STC material did not seem adequate when I studied for my principals exam years ago. I just ordered Kaplan, but I sure hope they have better material? It is such a waste of time to study the wrong concepts. My S66 test had plenty of questions and concepts that were not in my STC study manual, and I had to guess on plenty of questions. Some questions were so confusing, I had to read them 2 to 3 times in effort to understand what they were asking. Learning the material is more important and trying to read trick questions! This is crazy, and not fair to the test taker.
Kim,
Thank you for posting this information. Hopefully the Kaplan materials will help you to pass the exam the next time you take it.
I wish you the best on the exam.
Bart
I too just took the S66 last week. I used the STC materials and felt very unprepared. I felt as if I knew perhaps 30% of the answers and the rest were my best guess. I did pass my first attempt with an 84%, but was very disappointed with the postion I was placed in. Best of luck to those about to take the exam. Don’t worry about the basic priciples covered in the 7, those were easy. Spend time on rules and regs of USA and 1940 Investment Act.
Thanks for your thoughts Ben.
Regards,
Bart
RE: SERIES 65
My frien just took the s65 and he the 2010 s65 test contains a lot about pensions, trusts, and gift tax, etc. Are there different versions of the s65 test or just one test for the 65 ? I have the pass/perfect study guide – although they touch on these categories, the bulk of the guide is blue sky and legal guidelines. Is the Kaplan package updated to the current 2010 test format and are the streaming videos updated to cover this area ?
Thanks in advance for taking the time to help.
Hi David,
Thank you for your inquiry. Each Series 65 exam is generated from a bank of test questions so while no two tests will be exactly the same, they will generally all be the same “toughness” and generally cover the same topics in a similar manner.
With respect to other products, I recommend you talk to the people at Kaplan and other study guide developers.
Regards,
Bart
Since it’s revision in Jan,’10, the series 66 exam has vastly increased in difficulty and an increase in the national fail rate ( some 50% ). Since most training vendors have access to the same information that is tested, the real key to success is preperation. This is not the series 7 !
The actual test questions are extremly tricky and often confusing with 2 or 3 of the 4 answer choices appearing correct. In fact, some topics are not even on the test outline as prepared by NASAA.This is an applications and situational based exam wherein candidates must be able to apply the laws, rules and concepts in given situations. Memorization of practice questions will not cut it !
In defense of STC, I believe we offer study materials that are second to none, with practice exams that are current to the test. I know hundreds of students who have passed the exam , many scoring in the 80% range as a result of using our materials and following our instruction. As I advise my students, the best practices for the 66 is to know the study manual inside and out, take the practice exams until scoring in the 90′s, do not memorize answers but focus on the concepts, take your time on the test, read questions carefully and…think !
Hi Bruce,
Thanks for your comments.
In addition to the comments here, I have heard many groups who have been very happy with the STC materials. I also agree that the Series 66 seems to be getting more difficult and that test-takers seem to be having a harder time with these issues.
Regards,
Bart