Series 66 study guide
Series 66 · Work through your exam, one topic at a time.
The Series 66 - formally the Uniform Combined State Law Examination - is a NASAA-administered qualification exam used by U.S. states to license professionals who work with individual clients on both the securities and investment advisory sides of the business. It is most commonly pursued by candidates who already hold, or are simultaneously pursuing, a general securities representative registration and who intend to act as an investment adviser representative, or to be associated with a firm that does. The content is organized into four broad areas: economic factors and business information; investment vehicle characteristics; client investment recommendations and strategies; and the laws, regulations, and guidelines that govern adviser conduct, including the prohibition on unethical business practices. The Series 66 study guide has 4 sections and about 1,400 words.
01Economic Factors and Business Information
Most economics items on the Series 66 are about transmission, not definition recall: policy and data move interest rates, and rates move prices, yields, and the recommendation you eventually give a client. Know the four phases of the business cycle (expansion, peak, contraction, trough) and be able to sort indicators into the right bucket.
344 words, about 2 min02Investment Vehicle Characteristics
Common stock carries a residual claim, voting power, and preemptive rights. Preferred stock is legally equity but trades like credit - fixed dividend, seniority to common, call features, and rate sensitivity.
350 words, about 2 min03Client Investment Recommendations and Strategies
Suitability answers almost always begin with client facts: goals, time horizon, liquidity needs, tax bracket, risk tolerance (willingness versus ability), and existing holdings. A long horizon with stable income supports equities; a short horizon or an imminent tuition bill supports cash equivalents no matter how aggressive the client feels.
338 words, about 2 min04Laws, Regulations, and Guidelines, Including Prohibition on Unethical Business Practices
The Securities Act of 1933 governs new issues: registration, the prospectus, and the ban on sales before the registration is effective. The Securities Exchange Act of 1934 governs secondary markets: broker-dealer and agent registration, reporting companies, proxy and tender offer rules, and insider trading under Rule 10b-5.
368 words, about 2 min