STUDY FOR THE SERIES 66 EXAM

SEC Rule 206(4)-5 bars investment adviser reps from taking compensation for advisory services for a period of two years following the making of a contribution to any political candidate who has the power to award or influence the awarding of government advisory business to the rep or investment adviser.  Rule  206(4)-5  does not prohibit the giving of investment advice but only the receiving of compensation for that advice and for a two-year  period. NASAA's Content Outline for the Series 66 covers Political Contributions in Section IV (H) (4). This means that the Series 66 candidate can expect to see questions on political contributions on the test. Bob Eder discusses political contributions in his Study for the Series 66 Exam on pages 269-271. Here is a sample of his treatment: "Political Contributions                                                                       IV(H)(4) To address the problem of investment advisers making political contributions or donations or

The SEC has rules regarding the requirement that registered investment advisory reps maintain confidentiality about the financial positions of their customers. This is called Regulation S-P. NASAA'S Test Specifications and Content Outline for the Series 66 Exam includes required knowledge on Privacy Regulations in Section IV (H) (5). This means that a Series 66 candidate should expect to see questions on privacy requirements on the Series 66 Exam. Bob Eder has detailed information about Regulation S-P in his  Study for the Series 66 Exam . Here is a sample of Bob Eder's discussion on maintaining  privacy of financial information of  customers : "Changes in Privacy Policies                                             IV (H) (5) If a financial services company changes or amends its privacy policy, it must send out revised privacy notices, or tell the customer about the changes in the company's next annual notice. Furthermore, if this change involves sharing confidentia

Taking the Series 66 exam? Be aware that  NASAA's Test Specifications for the Series 66 include questions on insurance-based products, such as equity indexed annuities. See NASAA's Test Specifications Section II (F) (1). Bob Eder devotes pages 75-81 in his Study for the Series 66 Exam to a discussion of annuities, including equity indexed annuities, including practice questions and examples. Here is a sample of Bob Eder's treatment of annuities: "Equity Indexed Annuities                                                                   II(F)(1) These products are also known as "fixed-indexed annuities." An equity-indexed annuity is a variation of a fixed annuity. An insurance company guarantees an annuitant a certain rate of interest or return, say four percent. Additionally, it ties this rate to a stock market index, such as the S&P 500. If stocks go up, the insurance company may pay a higher rate, as explained and set forth in the annuity contract. Ho

NASAA publishes Test Specifications for the Series 66 exam, and it includes in Section II (B) (1-4) Methods of Valuing Equity Securities. These include technical analysis, fundamental analysis, dividend discount, and discounted cash flow. NASAA indicates that the Series 66 exam contains three questions. If you are going to sit for the Series 66, make sure that you know how dividend discount and discounted cash flow work. Bob Eder discusses equity valuation methods on pages 52-53 of  his Series 66 study manual,  Study for the Series 66 Exam . Here is a sample of Bob Eder's treatment of the dividend discount model : EXAMPLE OF DIVIDEND DISCOUNT MODEL ABC Corp. stock paid an annual dividend of $3.30 last year. Today, ABC announces that it will boost its dividend by eight percent for the coming year. Joe tries to earn 12 percent on his money. To find the price based on the dividend discount model, divide this year's expected dividend of $3.56 ($3.30 multiplied by 1.08) by the di

  If you plan to sit for the Series 66 exam, make sure that you are using a study guide or manual that contains information on the SEC Rule regarding Investment Adviser Marketing. NASAA tells test applicants that it has added this subject to its Series 66 Content Outline and Test Specifications. Bob Eder has detailed material on the SEC Marketing Rule for Investment Advisers on pages 291-292 of his  Study for the Series 66 Exam .  Here's an example of Bob Eder's description of using testimonials in investment adviser marketing: Testimonials                                                                                                   IV(G)(5) Testimonials require that there be disclosures whether the person giving the testimonial is a client, and whether the adviser pays compensation to the maker of the testimonial. The SEC requires that the adviser keep written records of supervising testimonials. The adviser must also enter into a written agreement or written contract wi