STUDY FOR THE SERIES 66 EXAM

   Taking the Series 66 Exam? Are you familiar with NASAA's Test Specifications for the Series 66 Exam? If yes, then you know that these Test Specifications list topics that will appear on the Series 66 Exam one way or other. Specifically for this blog, I refer to Series 66 Test Specifications Section II(E)(2-3) which refer to Recommendation of Leveraged and Inverse ETFs. Just recently, on May 4, 2023, the SEC issued a Cease-and-Desist Order, File No. 3-21403, dealing with an investment advisory firm, Classic Asset Management LLC (CAM). Why? For Breach of Fiduciary Duty in Connection with Use of Leveraged ETFs. Here's what the SEC said in its Press Release 2023-88 on this matter: According to the SEC’s order, from at least 2017 through December 2020, CAM and Schmitz [an investment adviser representative] invested advisory clients in leveraged ETFs for extended periods of time, often in significant concentrations, despite warnings in the funds’ prospectuses that the products ca...

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 te...

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...

  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                                                                         ...