Failed Series 65 (Investment Adviser)? Here's Your Recovery Plan

Pro tip: Contact the exam provider directly for their specific retake policy.

• Preparing for the Series 65 as a law exam.
  Only 30 percent of the scored questions, 39 of 130, come from laws and regulations. The other 91 are economics, products, portfolio construction, tax and client profiling. Allocate study time against the 15, 25, 30, 30 split rather than against how the exam sounds.
• Assuming 70 percent is the pass mark.
  NASAA answers this directly: the passing grade is not 70 percent and is not calculated as a percentage. You need 92 of 130 scored questions, which is about 70.8 percent, and 10 unscored pretest questions sit in the form. Target 100 of 130 on practice exams to leave room.
• Averaging practice section scores to predict the result.
  NASAA states the parts are weighted differently, so an average of your four section percentages will not equal your overall grade. Convert each section to raw questions instead: 20, 32, 39 and 39, and add the raw counts.
• Skipping the arithmetic because it looks like only a slice of topic I.
  Calculations run across the exam. Time value of money and ratios sit in topic I, duration and yield to maturity in topic II, and the whole returns list in topic III. Prometric supplies only a four-function calculator, so practise these on a four-function device rather than a financial calculator.
• Studying the fiduciary standard as a slogan rather than as specific obligations.
  Topic IV names the components separately: compensation disclosure, soft dollars, performance-based fees, custody, discretion, trading authorization, standard of care and anti-money laundering. Learn what each requires in writing and when disclosure has to happen, because that is how the questions are built.
• Sitting the exam without checking whether your designation already waives it.
  Most states accept the CFP, ChFC or MSFS, CFA, PFS or CIMA instead of the Series 65, and the list was updated by NASAA membership in May 2024. You claim it by checking the box in Section 8 of Form U4, and CRD verifies against the certifying body's records. A CPA alone does not qualify.
• Ignoring the retirement plan and account ownership material.
  Topic III includes IRAs, Solo 401(k), 403(b), 457, SIMPLE, SEP, ERISA, 529s, Coverdell, UTMA and UGMA, HSAs, JTWROS, TIC, TBE, TOD, POD, QDROs and donor advised funds. That is a large fraction of the 39 questions in the heaviest area and it rewards flat memorisation.
• Believing that passing the Series 65 makes you an accredited investor on its own.
  The SEC's August 26, 2020 order covers a person holding the Series 65 licence in good standing. NASAA points out that this requires being licensed as an investment adviser representative in your state and complying with that state's requirements, not just holding a passing exam result.
• Using study material that predates June 12, 2023.
  The current specification took effect that day and added items such as digital assets, IRMAA, high frequency trading, cyber security and business continuity planning, along with SECURE Act 2.0 alignment. Check the effective date printed on any manual or question bank before you rely on it.

• Required for RIA representatives
• 130 questions in 180 minutes
• Heavy focus on fiduciary duty
• Study portfolio management and economics
• Alternative to CFP for some roles
• No Series 7 prerequisite