A Series 65 license, once paired with registration through a firm, allows you to work as an investment adviser representative: give personalized investment advice for a fee, manage client portfolios, and refer clients to other advisory firms in exchange for compensation. What it does not allow is selling securities for commissions. Every activity you take on carries a fiduciary duty to the client, and the exam alone is not the authorization — registration through a Registered Investment Adviser (RIA) firm is.1FINRA. Series 65 – Uniform Investment Adviser Law Exam
Advising Clients for a Fee
The central privilege of the Series 65 is charging clients directly for financial guidance.2NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. Series 65 Exam Content Outline That is what separates an adviser from a broker: your pay is tied to your advice, not to whether a client buys or sells a specific product.
Advisory fees usually take one of three shapes. Hourly or flat-fee arrangements suit one-time financial plans. A percentage of assets under management (AUM) is the most common ongoing model, where the fee scales with the account value. Some firms blend the two.
The advice itself can cover securities analysis, asset allocation across stocks, bonds, and funds, retirement planning, and risk management shaped to the client’s situation. Whatever structure the firm uses, it has to be disclosed in the firm’s Form ADV Part 2, the brochure that spells out compensation and conflicts of interest.3SEC.gov. Form ADV Part 2 – Uniform Requirements for the Investment Adviser Brochure and Brochure Supplements Every new client must receive that brochure before or at the time the advisory agreement is signed, and existing clients get an updated version annually if anything material has changed.4eCFR. 17 CFR 275.204-3 – Delivery of Brochures and Brochure Supplements
Managing Client Portfolios
Beyond giving advice, the license lets you actively manage accounts: pick securities, time trades, rebalance holdings, and keep the portfolio aligned with the client’s goals and risk tolerance. How independently you can act depends on the authority granted.
Under a discretionary arrangement, you can execute trades without calling the client for approval on each one. The SEC defines discretionary authority as the power to decide which securities to buy and sell on the client’s behalf.5SEC.gov. Final Rule – Rules Implementing Amendments to the Investment Advisers Act of 1940 – Appendix C Form ADV Glossary of Terms Under a non-discretionary arrangement, you recommend trades and the client approves each one before it goes through. The scope of that authority belongs in the written advisory agreement at the start of the relationship.
If your firm takes custody of client funds or securities, extra requirements attach. The firm must hold client assets with a qualified custodian, keep them in properly segregated accounts, and in many cases submit to an annual surprise examination by an independent accountant. Custody rules are among the most heavily scrutinized areas of advisory compliance.
Referring Clients to Other Advisory Firms
A Series 65 holder can also act as a promoter for other RIA firms. In that role you identify potential clients and refer them to a third-party money manager or a specialized advisory firm in exchange for a referral fee or a share of the management fee. You are not giving direct investment advice or managing assets when acting this way.
The SEC’s modernized marketing rule replaced the older “solicitor” framework. Any advertisement containing a paid referral or endorsement must clearly disclose that the person making the referral is compensated, along with details about the compensation and any conflicts of interest.6U.S. Securities and Exchange Commission. SEC Adopts Modernized Marketing Rule for Investment Advisers The firm that hires you as a promoter is responsible for overseeing your activities and making sure the required disclosures are given.
Everything You Do Is Fiduciary
Working as an IAR makes you a fiduciary. This is a binding obligation under the Investment Advisers Act of 1940, not a marketing label. The SEC has confirmed that the duty has two components: a duty of care and a duty of loyalty.7SEC.gov. Commission Interpretation Regarding Standard of Conduct for Investment Advisers The duty of care requires advice that is in the client’s best interest. The duty of loyalty requires you to put the client’s interests ahead of your own and to disclose or eliminate conflicts.
The standard covers the whole relationship, not just the moment advice is given. It reaches how you pick investments and how you charge for them. Violations can lead to enforcement actions, fines, censure, or revocation of your registration. This is the standard that distinguishes the advisory side of the business from the broker-dealer side, which has historically operated under a suitability standard (brokers now face their own “best interest” rule under Regulation BI).
What the Series 65 Does Not Let You Do
The license qualifies you to give advice. It does not authorize you to sell securities products or earn transaction-based commissions. To execute trades as a broker-dealer agent and take commissions on stocks, bonds, or mutual funds, you need a separate license, typically the Series 7 (General Securities Representative Examination). Passing the Series 65 alone does not confer the right to transact securities business.
In practice, a pure Series 65 holder operates on a fee-only basis. You get paid for advice and portfolio management, not for steering clients toward particular products. Anyone who wants to both advise and sell for commissions needs to hold the Series 7 in addition to the Series 65 (or its cousin, the Series 66).
Registration Is What Turns the Exam Into Authority
Nothing on the list above happens on the strength of the exam certificate. You have to register through the proper channels and link your license to a firm before you can legally advise anyone. Registration means filing a Form U4, the uniform application that tracks your employment history, disciplinary record, and other background information.8FINRA. Form U4 The Form U4 links your license to a specific RIA firm, and you must register in each state where you do business, unless you qualify for an exemption.9NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. State Investment Adviser Registration Information If your registration lapses or you leave your firm without joining another, you lose the right to use the IAR title or provide advisory services.
Which regulator oversees your firm depends on its size. Under Section 203A of the Investment Advisers Act, an adviser with at least $100 million in AUM may register with the SEC, and firms at $110 million or more generally must register federally. Firms below the $100 million threshold register with their home state’s securities regulator instead.10eCFR. 17 CFR 275.203A-1 – Eligibility for SEC Registration A buffer between $90 million and $110 million keeps firms from bouncing back and forth as their AUM fluctuates. Either way, you personally register through the IARD system, file Form U4, and hold a valid Series 65 (or equivalent) to serve as the firm’s IAR.
The exam qualification stays valid as long as you remain registered with a firm. If you leave a firm, or your firm files a Form U5 terminating your registration, you have two years to re-register with another firm before the qualification expires.11NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. Exam FAQs After that gap you would need to retake it, though some states can waive the retest on a case-by-case basis. NASAA also runs an Examination Validity Extension Program (EVEP) that lets you keep the qualification alive for up to five years through annual continuing education in participating states.1FINRA. Series 65 – Uniform Investment Adviser Law Exam
States that have adopted NASAA’s continuing education model rule require 12 CE credits a year: six in ethics and professional responsibility, six in products and practice.12NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. IAR Continuing Education FAQ The split matters; taking all 12 in one category does not satisfy the requirement. Not every state has adopted the CE rule yet, so what you owe depends on where you register.