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One thing is for certain, there is always room for a quality business in the market.However, building a business from scratch is no mean feat and the ever-increasing costs and changing regulatory landscape can make it an uphill struggle.The Series 65 is most often the choice for those who plan only to offer investment advice and who do not plan on engaging clients in the sale of securities.
Financial industry research firm, Cerulli Associates, conducted a study showing that as of the beginning of 2010, independent registered investment advisers tripled their assets under management to a collective $1.7 trillion during a single 10-year period.
This has caused the biggest brokerage and investment advisory firms to take notice, even as their salaried advisers continue to manage some $13 trillion in client assets.
The Certified Financial Planner (CFP) designation is the best recognized elective certification of this kind.
According to the Certified Planner Board of Standards, 85% of people searching for a financial advisor found the CFP designation to be “very important” or “extremely important.” Becoming a CFP requires meeting two educational requirements: financial planning education in almost 100 topics (the topic list) and at least a bachelor’s degree, or its equivalent from an accredited college or university.
Investment advisers who secure employment with existing firms have the benefit of working to serve a well-established client base without having to worry about paying the additional expenses that come with operating a business.
Independent advisers have the benefit of running their firm in a way that fits their goals and once the practice gains a healthy client base, independent IAs have the potential to earn much more than they would as IARs working with an existing firm.The most common path to becoming an independent investment advisor is to first work as an investment adviser representative (IAR) at another firm.Using this path, the advisor gains valuable experience working under a seasoned IA before joining the rapidly growing arena of independent advisory firms.The Series 65 exam is a 140 question test with 130 questions counting towards the final score.The other 10 questions serve as pretest questions allowing FINRA to pilot questions that may appear on future exams.The candidate has to successfully answer 94 of the 130 questions making the minimum percentage for passage 72%. The Series 7, formerly known as the General Securities Representative Qualification Examination is a 250-question test administered in two, three hour blocks.Like the series 65, the Series 7 has 10 questions that serve as pretest questions allowing FINRA to pilot questions that may appear on future exams and the minimum passing score is 72% The Uniform Combined State Law Examination, also called the Series 66 exam, is similar to the Series 65 but because the Series 7 has testing overlap with the 65, the Series 66 was redesigned to test the additional topics found on the Series 65 without covering the product, analysis, and strategy questions which are tested on the Series 7.In order to serve as an investment adviser, state and federal regulators require that candidates hold the Series 65 license by itself, or the Series 7 in conjunction with the Series 66 by passing the related exams. The Series 65 Uniform Investment Adviser Law Examination exam is designed to be a self-study exam.There are a variety of study materials available including study manuals, exam preparation software and online or traditional classroom instruction.After the IAR gains experience and builds a client base, they may elect to open their own practice.Advisers who go independent often continue to work with some or all of their existing clients in their newly formed firm.