FINRA SERIES 66 EXAM STUDY GUIDE
2025/2026 ACCURATE QUESTIONS AND
VERIFIED CORRECT SOLUTIONS WITH
RATIONALES || 100% GUARANTEED PASS
<RECENT VERSION>
Requirements for taking custody - ANSWER If the adviser takes custody of client
funds and securities, it must segregate the client funds from investment adviser
monies; send quarterly account statements to customers; and be audited annually.
Example of taking custody - ANSWER If a State-registered adviser accepts
prepaid advisory fees of $500 or more, 6 months or more in advance of rendering
services, NASAA considers this to be taking custody.
Security exclusions - ANSWER 1. Insurance products (term life policies whole
life policies endowment policies fixed annuities) (however variable annuities are a
security)
2 .Commodities or Futures contracts (however, commodity options are a security)
3. Retirement plansIndividual retirement accounts Keogh plans 401 K plans
4. Mortgages (however, mortgage bonds and mortgage backed pass-through
certificates are a security)
Investment advisers who do not have to register in the state are... - ANSWER
those that give advice to institutions, 5 or fewer customers, or federal covered
advisors
Registration by notification - ANSWER use SEC registration for state registration;
must be on file for 5 days before being effective
, Registration by coordination - ANSWER A process that allows a security to be
sold in a state. It is available to an issuer that files for the security's registration
under the Securities Act of 1933 and files duplicates of the registration documents
with the state administrator. The state registration becomes effective at the same
time the federal registration statement becomes effective.
Registration by qualification - ANSWER A process that allows a security to be
sold in a state. It is available to an issuer who files for the security's registration
with the state Administrator, meets minimum net worth, disclosure, and other
requirements, and files appropriate registration fees. The state registration becomes
effective when the Administrator so orders.
Broker Dealers follow FINRA rules and must keep communication records on file
for.. - ANSWER 3 years
An investment advisor must disclose if they - ANSWER 1. Take custody of
securities
2. Have discretionary accounts
3. Accepts prepaid advisory fees of $1,200 or more 6 months in advance
4. Financial difficulties
Private fund advisors - ANSWER Must register with the SEC once assets reach
$150M
Uniform Securities Act requirers anyone offering a security in the State -
ANSWER 1. Security is registered in the state
2. Federal covered security
3. Security is exempt from registration in the state
4. Transaction is exempt in the state
In a year of sharply rising stock prices, - ANSWER variable annuities will
outperform equity indexed annuities
, Investment Advisers follow the Investment Advisers Act of 1940 and must keep
communication records on file for.. - ANSWER 5 years; 2 years being accessible
Federal Securities Act: Investment Advisers are NOT exempt from registering if
they advise - ANSWER investment companies
Performance fees can be charged to - ANSWER A qualified customer is one that
has at least $1,000,000 under management with the adviser or that has a net worth
of $2,100,000.
Registration for Federal Covered Advisers expires.. - ANSWER December 31st
Record retention for broker-dealer - ANSWER 3 years
Customer account records-6 years
Record retention for investment advisor - ANSWER 5 years
If firm closes, additional 3 years
Conflict of interest disclosure for broker dealer - ANSWER Only when making a
recommendation to a client
Conflict of interest disclosure for investment advisor - ANSWER Every conflict
must be given in Brochure to client at account opening
Investment advisors cannot borrow from clients - ANSWER True
Only broker dealers can borrow and share in gains/losses with someone regarding
just the proportion of capital contributed - ANSWER True
Broker dealers are allowed to take custody of customer's securities - ANSWER
True
Investment advisors can NOT take custody of customer's securities - ANSWER
True
, Investment advisors can pay referral fees as long as - ANSWER the individual is
registered as an IAR
Order tickets for a broker dealer must have - ANSWER Time of order entry,
execution, and cancellation
NOT trade confirmation
Order tickets for an investment advisor do not need - ANSWER a time stamp
Testimonials for broker dealers are - ANSWER allowed but disclosed to customer
if paid for it
Investment advisors don't allow - ANSWER testimonials
UTMA accounts are prohibited from being used for - ANSWER food, shelter,
clothing
Prospectus delivery is only required for - ANSWER new issues
Changes to the terms of advisory contracts must be - ANSWER filed with the
Administrator on Form ADV within 30 days
A person who advises customers on the selection of a broker dealer - ANSWER is
deemed an Investment Advisor
An agent that withdraws from a broker dealer becomes effective within -
ANSWER 30 days
Form ADV Part 1 - ANSWER Contains basic registration information:
Name of firm
Address
Phone Number
Officers
Shareholders
States registered
2025/2026 ACCURATE QUESTIONS AND
VERIFIED CORRECT SOLUTIONS WITH
RATIONALES || 100% GUARANTEED PASS
<RECENT VERSION>
Requirements for taking custody - ANSWER If the adviser takes custody of client
funds and securities, it must segregate the client funds from investment adviser
monies; send quarterly account statements to customers; and be audited annually.
Example of taking custody - ANSWER If a State-registered adviser accepts
prepaid advisory fees of $500 or more, 6 months or more in advance of rendering
services, NASAA considers this to be taking custody.
Security exclusions - ANSWER 1. Insurance products (term life policies whole
life policies endowment policies fixed annuities) (however variable annuities are a
security)
2 .Commodities or Futures contracts (however, commodity options are a security)
3. Retirement plansIndividual retirement accounts Keogh plans 401 K plans
4. Mortgages (however, mortgage bonds and mortgage backed pass-through
certificates are a security)
Investment advisers who do not have to register in the state are... - ANSWER
those that give advice to institutions, 5 or fewer customers, or federal covered
advisors
Registration by notification - ANSWER use SEC registration for state registration;
must be on file for 5 days before being effective
, Registration by coordination - ANSWER A process that allows a security to be
sold in a state. It is available to an issuer that files for the security's registration
under the Securities Act of 1933 and files duplicates of the registration documents
with the state administrator. The state registration becomes effective at the same
time the federal registration statement becomes effective.
Registration by qualification - ANSWER A process that allows a security to be
sold in a state. It is available to an issuer who files for the security's registration
with the state Administrator, meets minimum net worth, disclosure, and other
requirements, and files appropriate registration fees. The state registration becomes
effective when the Administrator so orders.
Broker Dealers follow FINRA rules and must keep communication records on file
for.. - ANSWER 3 years
An investment advisor must disclose if they - ANSWER 1. Take custody of
securities
2. Have discretionary accounts
3. Accepts prepaid advisory fees of $1,200 or more 6 months in advance
4. Financial difficulties
Private fund advisors - ANSWER Must register with the SEC once assets reach
$150M
Uniform Securities Act requirers anyone offering a security in the State -
ANSWER 1. Security is registered in the state
2. Federal covered security
3. Security is exempt from registration in the state
4. Transaction is exempt in the state
In a year of sharply rising stock prices, - ANSWER variable annuities will
outperform equity indexed annuities
, Investment Advisers follow the Investment Advisers Act of 1940 and must keep
communication records on file for.. - ANSWER 5 years; 2 years being accessible
Federal Securities Act: Investment Advisers are NOT exempt from registering if
they advise - ANSWER investment companies
Performance fees can be charged to - ANSWER A qualified customer is one that
has at least $1,000,000 under management with the adviser or that has a net worth
of $2,100,000.
Registration for Federal Covered Advisers expires.. - ANSWER December 31st
Record retention for broker-dealer - ANSWER 3 years
Customer account records-6 years
Record retention for investment advisor - ANSWER 5 years
If firm closes, additional 3 years
Conflict of interest disclosure for broker dealer - ANSWER Only when making a
recommendation to a client
Conflict of interest disclosure for investment advisor - ANSWER Every conflict
must be given in Brochure to client at account opening
Investment advisors cannot borrow from clients - ANSWER True
Only broker dealers can borrow and share in gains/losses with someone regarding
just the proportion of capital contributed - ANSWER True
Broker dealers are allowed to take custody of customer's securities - ANSWER
True
Investment advisors can NOT take custody of customer's securities - ANSWER
True
, Investment advisors can pay referral fees as long as - ANSWER the individual is
registered as an IAR
Order tickets for a broker dealer must have - ANSWER Time of order entry,
execution, and cancellation
NOT trade confirmation
Order tickets for an investment advisor do not need - ANSWER a time stamp
Testimonials for broker dealers are - ANSWER allowed but disclosed to customer
if paid for it
Investment advisors don't allow - ANSWER testimonials
UTMA accounts are prohibited from being used for - ANSWER food, shelter,
clothing
Prospectus delivery is only required for - ANSWER new issues
Changes to the terms of advisory contracts must be - ANSWER filed with the
Administrator on Form ADV within 30 days
A person who advises customers on the selection of a broker dealer - ANSWER is
deemed an Investment Advisor
An agent that withdraws from a broker dealer becomes effective within -
ANSWER 30 days
Form ADV Part 1 - ANSWER Contains basic registration information:
Name of firm
Address
Phone Number
Officers
Shareholders
States registered
