Series 65 study guide
Series 65 · Work through your exam, one topic at a time.
The Series 65 is the licensing exam most often associated with becoming an investment adviser representative at firms registered with a state securities regulator. In most states, an individual who provides investment advice for compensation - and who is not covered by federal registration - must satisfy a qualification requirement of this kind before being licensed to do that work. The Series 65 study guide has 4 sections and about 1,362 words.
01Economic Analysis and Business Information
Economic questions ask you to connect policy, the business cycle, and interest rates to security prices. Know the Fed's core tools - open market operations, the discount rate, reserve requirements, and interest on reserve balances.
325 words, about 2 min02Investment Vehicle Characteristics
Equities: common stock (residual claim, voting), preferred (fixed dividend, senior, often callable, usually nonvoting), ADRs (foreign shares with currency and political risk), rights (short-dated, subscription price below market, anti-dilutive), warrants (long-dated, exercise price above market at issue). Fixed income: price moves inversely to yield.
343 words, about 2 min03Client Investment Recommendations and Strategies
Begin with the investment policy statement: goals, time horizon, liquidity needs, tax situation, risk tolerance, and unique constraints. Risk tolerance has two parts - ability (financial capacity) and willingness (psychological comfort) - and the lesser of the two governs.
334 words, about 2 min04Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices
Federal statutes: the Securities Act of 1933 requires registration and a prospectus for new issues and supplies the core antifraud rule; the Securities Exchange Act of 1934 created the SEC and governs reporting issuers, broker-dealers, and proxies; the Investment Company Act of 1940 regulates fund registration and diversification; the Investment Advisers Act of 1940 imposes fiduciary duty, Form ADV, custody, advertising, and performance-fee rules. The Uniform Securities Act governs state registration of advisers, agents, and broker-dealers, plus state antifraud authority.
360 words, about 2 min