====== Series 66 ======
The Series 66 (officially known as the 'Uniform Combined State Law Examination') is a licensing exam and qualification for financial professionals in the United States. Think of it as a two-for-one deal. It merges the content of two separate exams—the [[Series 63]], which covers state securities regulations, and the [[Series 65]], which covers the knowledge required to be an investment adviser—into a single, comprehensive test. Administered by the [[Financial Industry Regulatory Authority (FINRA)]] on behalf of the [[North American Securities Administrators Association (NASAA)]], the Series 66 is designed for individuals who want to be registered as both an [[investment adviser representative]] (IAR) and a [[broker-dealer agent]]. To be eligible to take the Series 66, a candidate must have already passed the rigorous [[Series 7]] exam. Passing this test demonstrates a professional’s knowledge of investment advice, ethics, and securities law, allowing them to serve clients in a dual capacity.
===== What's on the Test? =====
The Series 66 isn't just about memorizing rules; it's designed to ensure a financial professional has a broad understanding of the investment landscape and their ethical obligations within it. The exam focuses on a professional's ability to provide competent advice and act lawfully.
The main topics covered include:
  * **Economic Factors and Business Information:** Understanding how the wider economy, like [[interest rates]] and [[inflation]], affects different types of investments. This includes reading financial reports and analyzing business fundamentals.
  * **Investment Vehicle Characteristics:** Knowing the ins and outs of various financial products. This means understanding the risks and rewards of [[stocks]], [[bonds]], [[mutual funds]], [[annuities]], and other [[securities]].
  * **Client Investment Recommendations and Strategies:** This is the practical side of financial planning. It covers how to analyze a client’s financial situation and goals to recommend a suitable portfolio, including concepts like [[asset allocation]] and [[diversification]].
  * **Laws, Regulations, and Guidelines:** This is the heart of the exam. It tests knowledge of securities laws (often called ‘[[blue sky laws]]’) and the strict rules prohibiting unethical practices. This section ensures the professional understands their legal duties to you, the client.
===== Why Should an Investor Care? =====
While you'll never have to take the Series 66, knowing what it means can dramatically change how you choose a financial professional. It’s all about the standard of care you receive.
==== Fiduciary Duty vs. The Suitability Standard ====
This is the most important takeaway for any investor.
  * **Fiduciary Duty:** An individual registered as an Investment Adviser Representative (which requires passing the Series 66 or 65) is typically held to a [[fiduciary duty]]. This is the highest ethical standard in the financial world. A fiduciary is legally and ethically bound to act in your //best interest// at all times. They must put your financial well-being ahead of their own or their firm's. This includes disclosing any potential [[conflict of interest]].
  * **Suitability Standard:** A broker-dealer agent, on the other hand, has historically been held to a lower [[suitability standard]]. This simply requires that an investment recommendation is //suitable// for a client's circumstances. It doesn't have to be the best or cheapest option. For example, a broker could recommend a mutual fund with a high fee that pays them a nice commission, as long as it’s generally appropriate for your risk tolerance. A fiduciary, in contrast, would be obligated to recommend a similar, lower-cost alternative if one exists.
Because a person with a Series 7 and 66 is "dual-registered," they can act as a broker //or// an adviser, sometimes switching hats. It is crucial to ask them, "In what capacity are you serving me for this transaction?" and to get it in writing. A true value investor seeks an advisor whose interests are squarely aligned with their own, and the fiduciary standard is the bedrock of that alignment.
==== How to Check a Professional's Credentials ====
Don't just take their word for it. You can verify a professional's licenses and check their disciplinary history for free using tools provided by regulators.
  * **FINRA's [[BrokerCheck]]**: This tool provides information on brokers and brokerage firms.
  * **SEC's [[Investment Adviser Public Disclosure (IAPD)]]**: This database provides information on investment advisers.
Using these tools is a simple but powerful due diligence step before entrusting anyone with your money.