Series 65 Flashcards
10 must-know concepts for the Uniform Investment Adviser Law Exam. Click to flip, arrow keys to navigate.
Last updated: February 2, 2026
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What is the fiduciary duty of an Investment Adviser?
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IAs must act in the best interest of their clients, placing client interests above their own. This includes the duty of care (provide suitable advice) and duty of loyalty (no conflicts of interest).
Tip: This is one of the most tested concepts on the Series 65.
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All 10 Flashcards (Quick Reference)
1 Ethics What is the fiduciary duty of an Investment Adviser?
IAs must act in the best interest of their clients, placing client interests above their own. This includes the duty of care (provide suitable advice) and duty of loyalty (no conflicts of interest).
Tip: This is one of the most tested concepts on the Series 65.
2 Registration What is the de minimis exemption for federal IA registration...
An adviser with fewer than 15 clients in a state during the preceding 12 months AND who does not hold itself out to the public as an IA in that state may be exempt from registration in that state.
Tip: Remember: fewer than 15 clients + no public advertising = exempt.
3 Disclosure When must Form ADV Part 2A (brochure) be delivered to client...
At least 48 hours before entering into an advisory contract, OR at the time of entering the contract if the client has 5 business days to terminate without penalty.
Tip: 48 hours early, or at signing with 5-day right to cancel.
4 Registration What is the net worth requirement for an IA taking custody o...
Minimum net worth of $35,000 (or post a surety bond of $35,000). States typically require $10,000 minimum for IAs with discretion but no custody.
Tip: Custody = $35K. Discretion only = $10K.
5 Compliance What constitutes 'custody' under investment adviser regulati...
Holding client funds or securities, having authority to withdraw funds from client accounts, or acting as trustee. Also includes having access to client login credentials.
Tip: If you can touch the money, you have custody.
6 Ethics What are three prohibited practices for Investment Advisers?
1) Front-running (trading ahead of clients based on their orders) 2) Churning (excessive trading to generate commissions) 3) Cherry-picking (unfairly allocating profitable trades to favored accounts)
Tip: All three involve putting your interests ahead of clients.
7 Formulas What is the formula for Current Yield?
Current Yield = Annual Interest (or Dividend) ÷ Current Market Price Example: $50 annual dividend ÷ $1,000 market price = 5% current yield
Tip: Current yield uses CURRENT price, not par value.
8 Securities What is the holding period for securities from a Regulation ...
Securities acquired in Reg D offerings are restricted and generally cannot be resold for 6 months (Rule 144) for reporting companies, or 12 months for non-reporting companies.
Tip: Reporting company = 6 months. Non-reporting = 12 months.
9 Compliance What must be disclosed in a solicitor arrangement?
The solicitor must provide written disclosure stating: 1) The solicitor is being compensated for referrals 2) The terms of the compensation arrangement 3) Whether client fees are higher due to the referral
Tip: Full transparency about who is paying whom.
10 Ethics What is the Uniform Prudent Investor Act standard?
Trustees must invest as a prudent investor would, considering the entire portfolio context (not individual investments in isolation). Diversification is required unless special circumstances make it imprudent.
Tip: Judge the whole portfolio, not each investment separately.
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