Licenses & Designations Required to Become an Investment Adviser Representative (IAR)

Licenses & Designations Required to Become an Investment Adviser Representative (IAR)

The financial industry is highly regulated, and individuals who provide investment advice must meet specific licensing and professional requirements. If you’re considering a career as an Investment Adviser Representative (IAR), understanding the required licenses and designations is crucial.

This guide breaks down the key requirements, including Series 65, Series 66, and professional designations that can be used as alternatives to licensing exams.

What Is an Investment Adviser Representative (IAR)?

An Investment Adviser Representative (IAR) is a financial professional who provides investment advice to clients on behalf of a Registered Investment Adviser (RIA). Unlike brokers, who sell financial products, IARs focus on fiduciary-based advisory services, meaning they are legally required to act in their clients’ best interests.

Regulatory Requirements

Investment Adviser Representatives must register at the state level and comply with the Investment Advisers Act of 1940 and relevant state securities laws. To do so, they must pass certain licensing exams or hold qualifying designations.

Licenses Needed to Be an IAR

1. Series 65 – Uniform Investment Adviser Law Exam

The Series 65 exam is the most common requirement for becoming an IAR. It is administered by FINRA (Financial Industry Regulatory Authority) but regulated by the North American Securities Administrators Association (NASAA).

• Exam Details:

  • 140 multiple-choice questions (130 scored, 10 unscored pretest questions)

  • 180 minutes to complete

  • Passing score: 72%

  • Covers topics like investment products, ethics, fiduciary responsibilities, portfolio management, and securities regulations.

• Sponsorship Required? No – Individuals can take the exam without being sponsored by a firm.

✅ If you want to become an IAR and don’t already hold a qualifying professional designation, passing the Series 65 is usually required.

2. Series 66 – Uniform Combined State Law Exam

The Series 66 is an alternative exam that combines elements of the Series 65 and Series 63. However, it is only available to individuals who already hold the Series 7 license.

• Who Needs It?

  • If you already have a Series 7 (which allows you to sell securities), you can take the Series 66 instead of the Series 65.

• Exam Details:

  • 100 multiple-choice questions

  • 150 minutes to complete

  • Passing score: 73%

• Sponsorship Required? Yes – You must be sponsored by a FINRA-member firm to take the Series 7 before attempting the Series 66.

✅ If you are transitioning from a brokerage role (Series 7) to investment advisory services, the Series 66 is a better option than the Series 65.

Professional Designations That Can Waive the Series 65 Requirement

Some states allow certain financial professional designations as an exemption from taking the Series 65 exam. If you hold one of these designations, you may be automatically qualified to register as an IAR.

1. Certified Financial Planner (CFP®)

• Issued by the Certified Financial Planner Board of Standards (CFP Board).

• Requires completing coursework, passing a rigorous 6-hour exam, and meeting ethical and experience requirements.

• Focuses on financial planning, estate planning, investment management, and retirement strategies.

  
  

  ✅ Recognized by most states as an alternative to the Series 65.

2. Chartered Financial Analyst (CFA®)

• Issued by the CFA Institute.

• Requires passing three levels of exams, at least four years of experience, and adherence to ethical standards.

• Specializes in investment management, securities analysis, and portfolio management.

  
  

  ✅ Accepted by most states as an alternative to the Series 65.

3. Chartered Investment Counselor (CIC)

• Issued by the Investment Adviser Association (IAA).

• Requires a CFA® designation, at least five years of experience, and a strong background in investment counseling.

  
  

  ✅ Recognized as an alternative to the Series 65 in some states.

4. Personal Financial Specialist (PFS)

• Issued by the American Institute of Certified Public Accountants (AICPA).

• Requires CPA licensure, additional coursework, and professional experience in financial planning.

  
  

  ✅ Some states allow the PFS designation instead of taking the Series 65.

🚨 Important Note: While these designations may waive the Series 65 requirement in some states, it’s crucial to check with your state’s securities regulator before assuming an exemption applies.

Which Path Should You Choose?

Path	Best For
Series 65	Those who want to become an IAR without any prior FINRA licenses.
Series 66 + Series 7	Brokers or financial professionals transitioning from selling securities to investment advisory services.
CFP®, CFA®, or Other Designations	Experienced professionals who already hold a designation that qualifies them for an exemption.

If you’re new to the industry, the Series 65 is the most direct path to becoming an IAR. If you already have a Series 7, taking the Series 66 may be more efficient.

Final Thoughts

Becoming an Investment Adviser Representative (IAR) requires the right licenses or professional designations to meet regulatory requirements. Whether you choose the Series 65, Series 66, or qualify through a CFP®, CFA®, or another professional designation, ensuring compliance with state laws is essential.

Before taking an exam, always check your state’s specific requirements to confirm whether you need to take the Series 65 or if your professional designation qualifies you for an exemption.

💡 Need help choosing the right path? Consult with RIA Compliance Concepts to ensure you’re meeting all the necessary requirements!