How to Study for the Series 66

1. Read the official exam guide

   Official Series 66 exam guide (NASAA (North American Securities Administrators Association) develops the content outline; FINRA administers the exam and processes registration) ↗

2. Know what the exam covers

   • Economic Factors and Business Information8%

     • Analytical Methods

       Covers time-value-of-money math (IRR, NPV, future value), descriptive statistics (mean, median, standard deviation, alpha/beta/Sharpe ratio, correlation), financial ratio analysis (current, quick, debt-to-equity), and valuation multiples like price-to-earnings and price-to-book.

   • Investment Vehicle Characteristics17%

     • Cash and Cash Equivalents

       Insured deposit products (demand deposits, CDs) and money market instruments such as commercial paper and Treasury bills.

     • Fixed Income Valuation

       How bonds are priced and compared using duration, maturity, yield-to-call/maturity, coupon, conversion value, credit ratings, credit spreads, and discounted cash flow.

     • Types of Equity Securities

       Common stock (domestic, foreign, ADRs) and preferred/convertible/floating-rate preferred stock.

     • Equity Valuation Factors

       Technical analysis, fundamental analysis, dividend discount models, and discounted cash flow approaches to valuing stocks.

     • Characteristics of Equity Securities

       Shareholder rights (voting, preemptive rights, liquidation preference), restricted/resale-restricted stock, dividends, and incentive vs. nonqualified employee stock options.

     • Equity Public Offerings

       IPOs, secondary offerings, and SPAC/blind-pool/blank-check structures.

     • Types of Pooled Investments

       Open- and closed-end mutual funds, private funds (hedge funds, private equity, venture capital), UITs, ETFs, and liquid vs. non-liquid REITs.

     • Characteristics of Pooled Investments

       Share classes, liquidity, tax treatment, fee structures, NAV and premium/discount pricing, risk/benefit tradeoffs, and comparison factors like benchmarks and manager tenure.

     • Futures and Options

       Basic definitions of futures and options contracts.

     • Alternative Investments

       Risk and application of leveraged funds, inverse funds, structured products, and exchange-traded notes.

     • Insurance-Based Products

       Fixed, variable, and indexed annuities, and whole/term/universal/variable life insurance definitions.

     • Other Assets

       Commodities, precious metals, and the definition/characteristics/risks of digital assets.

   • Client/Customer Investment Recommendations and Strategies30%

     • Type of Client/Customer

       Individuals and sole proprietors, business entities (partnerships, LLCs, C/S-corps), trusts/estates, and foundations/charities as client types.

     • Client/Customer Profile

       Gathering and using financial goals, cash flow/balance sheet/tax situation, risk tolerance, non-financial factors (values, life stage, behavioral finance), and time horizon to build a client profile.

     • Capital Market Theory

       Core investment theories — CAPM, Modern Portfolio Theory, and the Efficient Market Hypothesis.

     • Portfolio Management Strategies, Styles, and Techniques

       Strategic vs. tactical asset allocation; active/passive/growth/value/income styles; and techniques like diversification, sector rotation, dollar-cost averaging, and leveraging.

     • Tax Considerations

       Individual income tax basics (capital gains, tax basis, AMT), entity-level taxation, and estate/gift tax fundamentals including exemptions and portability.

     • Retirement Plans

       Traditional/Roth IRAs, solo 401(k)s, qualified plans (401(k), 403(b), 457, SEP, SIMPLE), and nonqualified plans.

     • ERISA Issues

       Fiduciary duties under ERISA, including qualified default investment alternatives and diversification requirements.

     • Special Types of Accounts

       Education accounts (529s, Coverdell), UTMA/UGMA custodial accounts, and health savings accounts.

     • Ownership and Estate Planning Techniques

       Account titling (JTWROS, tenants in common, tenancy by entirety), TOD/POD designations, beneficiary designations, wills/trusts basics, QDROs, and donor-advised funds.

     • Trading Securities

       Order types and trading terminology, the roles of broker-dealers/custodians/market makers, trading costs, and best execution obligations.

     • Portfolio Performance Measures

       Return calculations (risk-adjusted, time-weighted, dollar-weighted, IRR, after-tax), current yield, and use of relevant benchmarks.

   • Laws, Regulations, and Guidelines Including Prohibition on Unethical Business Practice45%

     • Regulation of Investment Advisers

       Definitions, notice-filing, registration and books-and-records requirements for state-registered and federal covered investment advisers, and supervision of IARs.

     • Regulation of Investment Adviser Representatives

       Who qualifies as an IAR, registration/exclusion rules, and ongoing requirements like continuing education and reportable-event disclosures.

     • Regulation of Broker-Dealers

       Broker-dealer definitions, registration/exclusion requirements, and supervisory obligations over agents.

     • Regulation of Agents of Broker-Dealers

       Definition of an agent and the registration/maintenance requirements that apply to them.

     • Regulation of Securities and Issuers

       Definitions of securities/issuers, state registration requirements, registration exemptions, and state antifraud/enforcement authority.

     • Remedies and Administrative Provisions

       Powers of the state securities Administrator, administrative actions, and other penalties/liabilities.

     • Communication with Clients and Prospects

       Required disclosures, bans on misrepresenting registration status or guaranteeing performance, client agreements, and rules governing advertising across social media, email, and websites.

     • Ethical Practices and Fiduciary Obligations

       Compensation disclosure, custody and discretion rules, AML obligations, conflict-of-interest and prohibited-activity rules (insider trading, selling away, market manipulation, exploitation of vulnerable adults, etc.), cybersecurity/privacy duties, and business continuity planning.

3. Practice by topic

   • Client Recommendations and Strategies
   • Economic Factors and Business Information
   • Investment Vehicle Characteristics
   • Laws, Regulations, and Ethics

4. Try mixed practice questions

   Series 66 practice questions with answers

5. Compare the Series 66 with other exams

   • Series 65 vs Series 66