Examination Requirements
Passing an exam is a prerequisite to becoming an investment adviser representative (IAR), but passing alone does not make you one. This section covers the exam pathways, professional designation waivers, and the rules governing exam validity.
Exam Pathways for IAR Registration
Under NASAA Model Rule 202(a)-2, every IAR applicant must pass one of two exam combinations (unless waived):
| Option | Exams Required | Validity Period |
|---|---|---|
| Option A | Series 65 (Uniform Investment Adviser Law Examination) | Within 2 years of application |
| Option B | Series 66 (Uniform Combined State Law Examination) + Series 7 (General Securities Representative Examination) + SIE (Securities Industry Essentials Examination) | Series 66 and Series 7 within 2 years; SIE within 4 years |
Key distinctions:
- The Series 65 alone satisfies the requirement
- The Series 66 must be combined with the Series 7 AND the SIE. The Series 66 alone is not sufficient.
- The Series 66 is equivalent to having passed both the Series 63 and Series 65
Exam Tip: Gotchas
- Passing the Series 65 alone does NOT make a person an IAR. The exam is only a prerequisite to licensing. The person must still apply for registration through an investment adviser (IA) firm, complete Form U4, pass a background check, and pay fees.
Professional Designation Waivers
The examination requirement is waived if the applicant holds one of the following professional designations and is current and in good standing at the time of filing:
| Designation | Abbreviation | Awarding Organization |
|---|---|---|
| Certified Financial Planner | CFP | Certified Financial Planner Board of Standards, Inc. |
| Chartered Financial Consultant | ChFC | The American College of Financial Services |
| Chartered Financial Analyst | CFA | CFA Institute |
| Personal Financial Specialist | PFS | American Institute of Certified Public Accountants (AICPA) |
| Certified Investment Management Analyst | CIMA | Investment & Wealth Institute |
Important rules:
- The designation must be current and in good standing. If the designation lapses or is revoked, the waiver no longer applies.
- A CPA certification alone does NOT qualify for a waiver. The AICPA's PFS (Personal Financial Specialist) designation is specifically required.
- These designations waive only the Series 65 requirement. They do NOT waive the Series 66 requirement (because the Series 66 includes Series 63 content).
- Form U4 Section 8 has a checkbox to indicate the professional designation held; the Central Registration Depository (CRD) system verifies designation status with the certifying organization.
Exam Tip: Gotchas
- A CPA certification alone does NOT qualify for a waiver. The CPA must also hold the PFS designation. This is one of the most commonly tested distinctions.
- The designation must be CURRENT at the time of application. A person who earned the CFA charter years ago but allowed it to lapse cannot use it for a waiver.
Prior Registration Exemption
An individual who has been registered as an IAR in any state within 2 years of filing a new application is NOT required to retake the exams. This protects IARs who:
- Change firms
- Move between states
- Take a temporary career break
If the individual has been unregistered for more than 2 years, the exams must be retaken (unless the individual participates in FINRA's Maintaining Qualifications Program).
Exam Tip: Gotchas
- The 2-year window is measured from the date of termination, not from the exam date. An IAR who passed the Series 65 ten years ago but was continuously registered until last year only needs to re-register within 2 years of that termination to avoid retaking the exam.
FINRA Maintaining Qualifications Program
An individual who is unregistered for more than 2 years but fewer than 5 years may maintain exam validity through the FINRA Maintaining Qualifications Program (FINRA Rule 1240(c)).
Limitation:
- This program preserves FINRA qualifying exams (Series 7, SIE) but does NOT extend the Series 65 or Series 66 for IAR registration purposes
- The Series 65 and Series 66 are NASAA exams, not FINRA exams. The Maintaining Qualifications Program only covers FINRA exams.
Exam Tip: Gotchas
- The Maintaining Qualifications Program does NOT help with IAR registration. A person who lets their registration lapse for 3 years might preserve their Series 7 through this program, but they would still need to retake the Series 65 (or Series 66) to become an IAR again.
The 2-Year Exam Validity Rule
The timeline for exam validity works as follows:
- Initial pass: After passing an exam, the person has 2 years to become registered with a state, or the exam expires
- While registered: The exam remains valid as long as the person stays registered
- After termination: When a registered person's employment is terminated (reflected by filing Form U5), the individual has 2 years to be re-employed and re-registered, or the exam expires
Exam Tip: Gotchas
- The 2-year clock resets each time a person terminates registration. Someone who passed the exam 15 years ago and stayed registered until last month has a fresh 2-year window. The exam does not "expire" after 2 years from the test date if the person has been continuously registered.
Administrator's Authority Over Exams
The Administrator has broad discretion regarding examinations:
- May by rule require examinations (written, oral, or both) for any class of or all applicants
- May by rule or order waive the examination requirement for a person or class of persons if the Administrator determines the examination is not necessary for the protection of advisory clients
- This authority extends beyond the Model Rule's enumerated waivers