Changes In The Series 65 Exam Take Effect June 12, 2023
Brent Sullivan
Founder
To pass the Series 65, test takers must include the following new material in their exam prep
Economic Factors and Business Information:
- New topics added related to ESG investing and digital assets, as well as the SEC marketing rule
- Questions on financial planning concepts, such as risk tolerance and asset allocation, will also be included
Investment Vehicle Characteristics:
- Introduction of new questions on ETFs and alternative investments
- Emphasis on the features and risks associated with different types of investment products, including mutual funds, variable annuities, and structured products
- Inclusion of questions on the tax implications of different types of investment vehicles
Client Investment Recommendations and Strategies:
- Addition of questions on sustainable and impact investing
- Expansion of the current section on fiduciary duties to include new standards of care for investment advisers
- Inclusion of questions on investment performance calculations and evaluation
Laws, Regulations, and Guidelines, Including Prohibition on Unethical Business Practices:
- Introduction of questions on the SECURE 2.0 Act, which includes changes to retirement planning rules and regulations
- Emphasis on ethical practices and conflicts of interest
- Inclusion of questions on AML regulations and the BSA
Investment Adviser Representatives: Regulation and Licensing Requirements:
- Expansion of the current section on registration requirements to include questions on continuing education and compliance reporting
- Emphasis on state-specific registration requirements and exemptions
- Inclusion of questions on the types of activities that require registration as an investment adviser representative
More information about new topics covered in Series 65
ESG Investing:
ESG investing involves considering environmental, social, and governance factors and financial returns. Accordingly, the Series 65 exam may ask test-takers about the types of ESG investing strategies, how to evaluate ESG investments and the benefits and risks of ESG investing. Test-takers may also face questions on regulatory requirements, such as the SEC's guidance on ESG disclosures.
Digital Assets:
The test questions about digital assets like cryptocurrency may ask about the different types of digital assets, how they are bought and sold, and the risks and benefits of investing in them. Test takers may also be asked about the legal and regulatory requirements related to digital assets and how they differ from traditional investments.
SEC Marketing Rule:
The SEC's marketing rule regulates investment advisers' advertising and marketing practices. Test questions related to the marketing rule may cover topics such as the types of advertising and marketing materials allowed, the requirements for disclosing fees and performance data, and the restrictions on testimonials and endorsements. Test takers may also be asked about the compliance requirements related to the marketing rule, such as the recordkeeping and reporting requirements.
SECURE Act 2.0:
The SECURE Act 2.0 is an update to the SECURE Act, a law that significantly changed retirement planning rules and regulations. Test questions related to the SECURE Act 2.0 may cover topics such as the new retirement planning provisions, the impact of the changes on retirement planning strategies, and the compliance requirements for investment advisers. Test takers may also be asked about the tax implications of the SECURE Act 2.0 and any potential regulatory changes resulting from the proposed legislation.
Summary
The Series 65 uniform investment adviser law exam will change significantly on June 12, 2023. These changes (read the 2023 summary here) reflect the evolving landscape of the investment industry and aim to ensure that investment advisers possess the necessary knowledge and skills to serve their clients effectively.