Series 65

Definition

The Series 65, also known as the Uniform Investment Adviser Law Examination, is an exam that is designed to qualify candidates as investment adviser representatives. It is administered by the Financial Industry Regulatory Authority (FINRA). It covers topics like laws, regulations, ethics, and various aspects of financial advising, such as portfolio management and retirement planning.

Phonetic

The phonetics of the keyword “Series 65” is: /ˈsɪə.riːz ˈsɪksˈfaɪv/

Key Takeaways

1. The Series 65 exam is a certification test for those aiming to become investment advisor representatives.
2. The exam covers topics like laws, regulations, ethics, and various aspects of investment, such as portfolio management or retirement planning.
3. The Series 65 exam consists of 130 multiple-choice questions and candidates must answer 94 questions correctly to pass.

Importance

The Series 65, or the Uniform Investment Adviser Law Examination, is an important term in business/finance because it is a qualification exam administered by the Financial Industry Regulatory Authority (FINRA) for individuals who aspire to provide investment advice for a fee within the United States. It’s designed to measure the competency of an entry-level investment adviser by testing their knowledge about topics like laws, regulations, ethics, and various types of securities and investment strategies. This certification is critical in establishing the credibility and professional standing of financial advisors, and is considered the standard by which proficiency, and understanding of the investment advising industry, is determined. Therefore, successfully passing the Series 65 exam is a significant milestone for professionals in the finance industry, allowing them to legally provide financial advice and handle client’s investments.

Explanation

The Series 65 is an exam and subsequent license primarily aimed at individuals wanting to provide clients with investment advice. Its larger purpose is to protect potential investors from poorly informed or ethically compromised advisors. To achieve this, the exam tests the candidate’s competency and understanding of a diverse range of topics associated with investment. These topics include retirement planning, portfolio management strategies, fiduciary responsibilities, laws, regulations, and ethics in investment advice. Therefore, obtaining a Series 65 license is indicative of a solid understanding of investing principles and guidelines, inspiring greater trust and confidence in potential clients. The Series 65 license permits individuals to act as investment advisors in many states, without any requirement to associate with a brokerage firm. This license is used by individuals who provide advice on securities for a fee, not commission, and who manage the investments of others. Often, holders of this license end up working in positions such as financial advisors, financial planners, or wealth managers where they provide advice specific to their client’s investment goals and needs. In essence, the Series 65 is a necessary differentiator for those aiming to establish their dedication and competence in the investment advice field.

Examples

1. Investment Advisery Business: As per the USA regulations, a person who wants to start an investment advisor business needs to pass the Series 65 exam. This ensures they have understanding of investing principles, securities laws, ethical conduct, and fiduciary obligations. 2. Financial Advisers in Brokerage Firms: In many brokerage firms, financial advisors are required to hold a Series 65 license. The license verification indicates to their clients that they are knowledgeable and qualified to give investing advice and can deal with complex financial scenarios. 3. Compliance Role in Financial Institutions: Compliance or regulatory professionals in financial institutions often must hold a Series 65 license to demonstrate their understanding of federal securities laws and regulations. Providing counsel to a business regarding these matters without the license may lead to legal difficulties for both the professional and the business.

Frequently Asked Questions(FAQ)

Related Finance Terms

• Uniform Investment Adviser Law Examination
• North American Securities Administrators Association (NASAA)
• Investment Adviser
• Securities Industry Regulatory Framework
• Registered Investment Advisers (RIAs)

Sources for More Information

• Investopedia
• SmartAsset
• Finra
• Finance Strategists