A Series 66 license allows you to do two jobs under state securities law: work as an investment adviser representative who gives personalized financial advice for a fee, and work as an agent of a broker-dealer who executes buy and sell orders for clients. It is the combined state-law qualification, so a single exam covers both functions instead of two. The authority only becomes active after you also pass the Series 7 and a FINRA-member firm registers you.
Giving Paid Investment Advice
As an investment adviser representative, or IAR, you evaluate a client’s goals, risk tolerance, and time horizon, then recommend specific securities: stocks, bonds, mutual funds, ETFs, and similar products. You can charge for that advice. That is the line between a licensed adviser and someone informally sharing tips.
Under the Investment Advisers Act of 1940, IARs owe clients a fiduciary duty. The SEC reads this as two obligations: a duty of care, meaning advice must genuinely serve the client’s interest and transactions must seek best execution, and a duty of loyalty, meaning you cannot place your own financial interest ahead of the client’s.1SEC.gov. Commission Interpretation Regarding Standard of Conduct for Investment Advisers This is a higher standard than the “best interest” standard that applies to broker-dealer agents.
How you get paid is flexible. Many IARs charge a percentage of assets under management, commonly around one percent per year. Others bill hourly or use flat fees for financial plans. Whichever model you pick, the advisory firm has to disclose its fees, conflicts of interest, and disciplinary history through Form ADV Part 2A, a brochure delivered to clients before or at the start of the relationship.2SEC.gov. Appendix C Part 2 of Form ADV Letting those disclosures or records slip can lead to suspension or revocation.
Performance-Based Fees Are Restricted
If you want to charge a performance-based fee, where your compensation rises with investment gains, the client has to qualify as a “qualified client.” That currently means at least $1,100,000 in assets under management with you, or a net worth of at least $2,200,000.3SEC.gov. Inflation Adjustments of Qualified Client Thresholds The SEC planned to adjust these thresholds for inflation on or about May 1, 2026, so check the current figures before writing a performance-fee arrangement.
Executing Securities Transactions
The second function is acting as an agent of a registered broker-dealer. Where the advisory role focuses on what to invest in, the agent role handles the mechanics of getting the trades done: placing the orders, entering them accurately, and making sure clients receive confirmations and account statements.
Agents typically earn commissions on trades rather than ongoing advisory fees. That might be a per-share amount on stock transactions or a sales charge on a mutual fund purchase. Commissions have to be fair and disclosed. Because the Series 66 covers both hats, you can operate on a fee-based advisory model, a commission-based brokerage model, or a hybrid. Blending the two creates conflicts of interest that need careful disclosure.
One operational point to know: most securities trades now settle on a T+1 basis, meaning the transaction has to complete within one business day of the trade date. The SEC moved to that shortened cycle from T+2 with a compliance date of May 28, 2024.4U.S. Securities and Exchange Commission. Shortening the Securities Transaction Settlement Cycle
Willful violations of the Securities Exchange Act of 1934, which governs broker-dealer activity, carry serious criminal penalties. An individual convicted under the Act faces up to 20 years in prison and fines up to $5 million.5Office of the Law Revision Counsel. 15 USC 78ff – Penalties Unauthorized trading, churning accounts for commissions, and misrepresenting securities all fall within the conduct that can trigger these penalties.
What the License Does Not Cover
The dual authority sounds broad but has firm edges. The Series 66 covers securities: stocks, bonds, mutual funds, variable annuities, and similar products. It does not authorize you to sell insurance products such as whole life or term life policies, which need separate state insurance licenses. It also does not cover commodities or futures contracts, which sit under the Commodity Futures Trading Commission and require different exams entirely.
It also does not qualify you to supervise other registered representatives or manage the operations of a broker-dealer. Supervisory work requires a principal-level license such as the Series 24. If your career eventually turns toward management or compliance oversight, you’ll need exams beyond the 66.
What Has to Be in Place Before the License Works
Passing the Series 66 by itself does not let you practice. Two other things have to line up.
Series 7 and the SIE
You must also pass the Series 7, the General Securities Representative Examination, for the Series 66 to take effect.6FINRA. Series 66 – Uniform Combined State Law Exam To sit for the Series 7, you first need the Securities Industry Essentials (SIE), a general knowledge exam anyone can take without firm sponsorship.7FINRA. Series 7 – General Securities Representative Exam The full stack is three exams: SIE, Series 7, and Series 66.
Form U4 and Firm Sponsorship
A FINRA-member firm has to file a Form U4 on your behalf through the Central Registration Depository.6FINRA. Series 66 – Uniform Combined State Law Exam The form captures ten years of employment history, five years of residential addresses, and detailed disclosures covering criminal history, regulatory actions, customer complaints, and financial events such as bankruptcies or judgments.8FINRA. Form U4 Uniform Application for Securities Industry Registration or Transfer
Accuracy on the U4 matters. You have a continuing obligation to update it, and firms must amend within 30 days of learning about a new disclosable event. Certain affirmative answers can trigger a statutory disqualification under the Securities Exchange Act, which can effectively end a career in the industry.8FINRA. Form U4 Uniform Application for Securities Industry Registration or Transfer People get into trouble by omitting an old bankruptcy or a dismissed complaint that still required disclosure. When in doubt, disclose.
Where the Authority Applies
The Series 66 is a state-level qualification. Federal law provides the framework through the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, but state securities administrators, often called Blue Sky regulators, enforce the Uniform Securities Act and handle individual registrations. They can investigate complaints, audit firms, and issue cease-and-desist orders.
You have to register in every state where you keep a physical office. In states where you have no office but serve clients remotely, a federal de minimis exemption generally preempts state registration if you have fewer than six clients in that state during a 12-month period.9U.S. Securities and Exchange Commission. Exemption for Certain Investment Advisers Operating in the United States Cross that threshold and you need to register in the state and pay its filing fees, which vary by state and by registration type.
Keeping the Authority Alive
Exam Expiration
If you pass the Series 66 but don’t register with a state within two years, the exam result expires. The same clock applies if you leave the industry and your registration terminates: you have two years to re-register before the qualification lapses. NASAA runs an Exam Validity Extension Program that can stretch the window to five years, but it requires enrolling in both the Series 63 and Series 65 components of the program, paying annual fees, and completing continuing education while unregistered.10NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. EVEP FAQs
Continuing Education
Once registered, you face education requirements from two directions. FINRA requires all registered representatives to complete a Regulatory Element. Separately, a growing number of states now require IARs to complete annual continuing education under a NASAA model rule: 12 credits per year, split evenly between ethics and professional responsibility on one side and products and practice on the other.11NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. IAR CE Requirements Overview If you’re subject to both, FINRA’s Regulatory Element can count toward the products and practice portion of the IAR requirement.
As of 2026, more than 20 states have adopted the IAR continuing education model rule, and additional states continue to join.12NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. Member Adoption Check whether the states where you’re registered have adopted it. Missing a CE deadline can cause your registration to lapse without any formal disciplinary action, and reinstating it is an avoidable headache.