Can I Take the Series 66 Without Sponsorship?
Discover if you can take the Series 66 without firm sponsorship and understand the complete licensing process for Investment Adviser Representatives.
The Series 66 exam is a crucial step for individuals aspiring to become Investment Adviser Representatives (IARs). It assesses a candidate’s understanding of state securities laws and investment advisory practices, serving as a pathway to providing financial advice. The question of whether this exam can be taken without firm sponsorship often arises, given the varying requirements across different industry licenses.
Series 66 Exam Sponsorship Requirements
The Series 66 exam does not require firm sponsorship to register and take the test. This differs from other securities exams, such as the Series 7, which mandates sponsorship by a Financial Industry Regulatory Authority (FINRA) member firm. You can typically self-enroll for the Series 66 by creating an account with FINRA and paying the exam fee, which is around $177. This flexibility allows individuals to pursue the Series 66 independently.
However, while the Series 66 does not require sponsorship to take the exam, it is a co-requisite with the Series 7 exam for full registration as an Investment Adviser Representative. The Series 7 exam requires firm sponsorship. Therefore, to ultimately practice as an Investment Adviser Representative, you must have successfully passed both the Series 7 and Series 66 exams, and the Series 7 component necessitates employer sponsorship. This means that while you might pass the Series 66 without a sponsor, its utility for professional registration is contingent on also passing the sponsored Series 7.
Understanding the Series 66 Exam
The Series 66 exam, officially known as the Uniform Combined State Law Examination, is developed by the North American Securities Administrators Association (NASAA) and administered by FINRA. Its purpose is to qualify individuals as both securities agents and Investment Adviser Representatives (IARs). The exam covers a broad range of topics essential for providing investment advice and handling securities transactions in compliance with state regulations.
The content is divided into four main areas: economic factors and business information, investment vehicle characteristics, client investment recommendations and strategies, and laws, regulations, and guidelines, including prohibitions on unethical business practices. The exam consists of 100 scored multiple-choice questions, along with 10 unscored pretest questions. Candidates are allotted 150 minutes to complete the examination. To pass, a candidate must correctly answer at least 73 of the 100 scored questions, equating to a passing score of 73%.
The Complete Licensing Process for Investment Adviser Representatives
Becoming a licensed Investment Adviser Representative involves a sequential process. The first step is to pass the Securities Industry Essentials (SIE) Exam. This introductory exam covers general securities industry knowledge and does not require firm sponsorship.
Following the SIE, the next step is passing the Series 7 exam, a co-requisite for the Series 66. This exam is comprehensive, allowing individuals to solicit, purchase, and sell a wide array of securities products. Obtaining eligibility to take the Series 7 exam requires sponsorship from a FINRA member firm, which typically involves the firm filing a Uniform Application for Securities Industry Registration or Transfer (Form U4) through FINRA’s Central Registration Depository (CRD) system.
Once the SIE and sponsored Series 7 exams are passed, the Series 66 exam completes the examination requirements for Investment Adviser Representatives. After completing these examinations, the final step involves formal registration with the appropriate regulatory body, such as a state securities regulator or the Securities and Exchange Commission (SEC). This registration activates the licenses and permits the individual to provide investment advisory services and transact in securities.