Series 63 vs. Series 65 vs. Series 66: What's the Difference? (2024)

Special Considerations

All three of these examinations were created by NASAA and are administered, under contract from that organization, by the FINRA, formerly known as the National Association of Securities Dealers (NASD).

NASAA is an organization of securities administrators. The term administrator. refers to a generic title used to indicate the person who is responsible for enforcing the Uniform Securities Act in a state. In various states, this person is called a commissioner, director, or Secretary of State for Securities.

The organization predates the major federal securities laws, such as the Securities Act of 1933 and the Securities and Exchange Act of 1934. It was formed in Kansas in 1919 and made its first efforts at standardizing the securities laws of the states shortly thereafter. The organization's goals included protecting the public, and it drafted model laws. These laws could be adopted by individual states to prevent fraud and register the persons involved in the securities business.

In the early days of securities regulation, a Kansas Supreme Court justice was quoted as saying that people were coming into his state and selling schemes that had no more substance than "so many feet of blue sky." The Uniform Securities Act has, as a result, been commonly referred to as the Blue Sky Laws.

Investment Advisor Representatives (IARs) and Investment Providers

Investment advisor representatives (IARs) are individuals employed by an investment advisor who makes recommendations or otherwise gives financial or investment advice to clients. The IAR's relationship with the investment advisory firm is similar to that of an agent who works for a broker-dealer.

NASAA's Memorandum of Understanding (MoU) from 1997 on this subject deals with both the federal-covered investment advisor, which is a firm registered with the Securities and Exchange Commission (SEC), and the investment advisor representatives who work for the firm.

"If an investment advisor is registered with the SEC, the states may not require registration, licensing, or qualification of the investment advisor or its supervised persons, except that states may license, register, or otherwise qualify investment advisor representatives who have a place of business located within that state."

This MoU refers to the National Securities Markets Improvement Act of 1966 (NSMIA) and lays out the requirements for testing persons who are to be IARs. In order to avoid costly penalties, investment advisory firms must ensure their IARs are registered correctly.

After the IAR meets the registration requirements they must pass the appropriate exams before providing any client financial advice. State requirements vary on this point, however, in most cases, the IAR must pass both the Series 63 and Series 65 or the Series 66 exam and the Series 7.

Career Path and Compensation

So what happens after you successfully pass your required exams and become registered? The career path you can take depends entirely on the tests you successfully pass. You can expect to find work with banks, insurance companies, brokerage firms, investment firms, and major corporations in the following capacities:

• Series 63 Exam: Financial advisor, insurance agent, financial broker, and any other position that allows you to buy and sell securities on behalf of your clients for a fee.
• Series 65 Exam: Financial advisor, compliance officer, securities instructor, investment consultant, and any other role that allows you to provide investment advice to your clients for a fee.
• Series 66 Exam: Financial advisor, retirement account advisor, wealth management associate, risk management officer, sales manager, and any other role that allows you to buy and sell securities for a fee.

The Bureau of Labor Statistics (BLS) provides up-to-date data about different occupations in the United States. This information, which includes salaries and job outlook, is updated on a regular basis. For instance:

• Securities, Commodities, and Financial Services Sales Agents: These professionals earned an annual median salary of $62,910 in 2021 and can expect job growth of 10% between 2021 and 2031, which is faster than average. This segment includes brokers, investment bankers, investment sales agents, traders, and financial services sales agents, among others.
• Personal Financial Advisors: The median annual salary for these professionals in 2021 was $94,170. The job outlook between 2021 and 2031 for this field was 15%, which is much faster than average.
• Insurance Sales Agents: These individuals earned an average annual salary of $49,840 in 2021. The job outlook was 6% between 2021 and 2031, which is as fast as the average. People in this field work in property insurance, health insurance, and life insurance.

The Bottom Line

Passing the Series 63 exam for registration within a state is a requirement for all registered representatives. Those who wish to be IARs must pass the Series 66 exam and the Series 7 exam. The Series 66 exam is the equivalent of taking both the Series 63 and Series 65 exams. If an individual does not already have a Series 7 and wishes to be an IAR, the Series 65 exam is NASAA's competency exam.

Check out our free study guides for the Series 65 and Series 63 exams.

Correction—Nov. 8, 2022:A previous version of this article misstated that the Series 7 exam is a prerequisite for the Series 66 exam. The two exams are corequisites, which means that candidates must take them both in order to register with their states. Test takers can take either one first but must pass both successfully.

Correction—August 6, 2023: This article has been edited from a previous version that incorrectly stated that the majority of those who take the Series 65 exam did not pass the Series 7 exam.