Series 66 — Uniform Combined State Law Examination Cheat Sheet

Last revised: September 16, 2026

Compact independent Cheat sheet for NASAA Series 66 — Uniform Combined State Law Examination candidates: state law, adviser rules, ethics, products, suitability, and formulas.

Use the tables for a quick pre-exam check. Expand a topic’s notes for explanations, examples, and additional distinctions.

Scope and study context

Item	Reference
Official provider	NASAA
Official exam title	Series 66 — Uniform Combined State Law Examination
Official exam code	Series 66
Page purpose	Independent Cheat Sheet for final review, scenario drills, and formula refresh
Best use	Read once for structure, then use the tables to classify practice-question facts quickly

The Series 66 blends state securities law, investment adviser regulation, ethical practices, investment products, portfolio concepts, taxation, and client suitability. Most missed questions come from confusing similar legal labels, ignoring capacity, or treating an exempt security as if every transaction in it is exempt.

A quick review helps you recognize patterns, but the Series 66 is won by applying rules under pressure. After reviewing this page, use independent companion practice in this sequence:

Topic drills for definitions, exemptions, ethics, and products.
Mixed question-bank sets to practice switching between law and recommendation questions.
Mock exams to build timing and endurance.
Detailed explanations to fix the reason behind each miss.
Error log review for repeated traps such as exempt transactions, IA/IAR status, and unsuitable recommendations.

Practical next step: start a focused set of original practice questions on your weakest Series 66 topic, then review every explanation until you can state why each wrong answer is wrong.

High-Yield Map

Area	What to recognize fast	Common exam trap
Persons and registration	Broker-dealer, agent, investment adviser, investment adviser representative, issuer, Administrator	An individual can be an agent, IAR, both, or neither depending on activity and compensation
State jurisdiction	Offer, sale, advice, place of business, client residence	Anti-fraud applies even when registration is not required
Exemptions	Exempt securities vs exempt transactions vs federal covered securities	Exempt transaction does not make the security exempt for later trades
Adviser conduct	Fiduciary duty, conflicts, custody, discretion, fees, contracts, disclosure	Disclosure alone is not enough if conflict is misleading or not consented to where required
Broker-dealer conduct	Fair dealing, suitability/best interest, supervision, commissions, customer authorization	Unauthorized trading and excessive trading are unethical even if profitable
Products	Bonds, funds, annuities, options, alternatives, insurance, retirement accounts	Variable products are securities; fixed insurance products generally are not
Portfolio theory	Risk, return, diversification, beta, alpha, standard deviation, correlation	Diversification reduces unsystematic risk, not market/systematic risk
Tax and planning	Capital gains, retirement accounts, muni/Treasury taxation, estate/account ownership	Tax-advantaged is not automatically suitable

Persons, Registration, and Jurisdiction

Core State Law Definitions

Term	Exam-ready definition	Key exclusions or limits
Security	Broad investment instrument: stock, bond, note, debenture, investment contract, limited partnership interest, option, variable annuity, variable life, fractional oil/gas interest	Fixed annuity, fixed life insurance, collectibles, commodities futures, and currency are generally not securities unless structured as an investment contract
Investment contract	Investment of money in a common enterprise with expectation of profits primarily from others’ efforts	Used to catch nontraditional schemes
Broker-dealer	Person engaged in effecting securities transactions for customer accounts or own account	Agent, issuer, and certain institutions or persons with no state presence dealing only with institutions may be excluded
Agent	Individual who represents a broker-dealer or issuer in effecting securities transactions	Clerical personnel are not agents merely for administrative work
Issuer	Person who issues or proposes to issue a security	Issuer is not a broker-dealer merely because it issues securities
Investment adviser	For compensation, engaged in business of advising others about securities or issuing securities analysis/reports	Lawyers, accountants, teachers, engineers, and broker-dealers may be excluded when advice is incidental and no special advisory compensation is received
Investment adviser representative	Individual associated with an adviser who gives advice, manages accounts, solicits advisory services, determines recommendations, or supervises such persons	Clerical/ministerial employees are excluded
Federal covered adviser	Adviser registered with the SEC or otherwise treated as covered under federal law	States generally use notice filing and IAR registration, not state adviser registration
Administrator	State securities regulator under the Uniform Securities Act framework	Can investigate, issue orders, require filings, and seek court action; still subject to procedural limits

Notes and examples

Three-Part Investment Adviser Test

A person is generally an investment adviser when all three are present:

Element	Meaning	Trap
Advice	Advice, reports, analysis, or recommendations about securities	General budgeting alone is not securities advice; asset allocation involving securities usually is
Business	Advice is part of regular business activity	One isolated conversation may not create adviser status
Compensation	Any economic benefit, direct or indirect	Compensation does not need to be a separate advisory fee

Broker-Dealer vs Investment Adviser Capacity

Fact pattern	Likely capacity	Why it matters
Executes customer trades for commissions	Broker-dealer/agent	Transaction-based compensation and order execution
Provides portfolio allocation advice for an annual asset-based fee	Investment adviser/IAR	Ongoing compensated securities advice
Broker gives incidental advice while recommending a trade, paid only commission	Broker-dealer capacity	Adviser exclusion may apply if advice is solely incidental and no special compensation
Financial planner charges a planning fee and recommends mutual funds	Investment adviser/IAR	Compensation plus securities recommendations
Insurance producer sells fixed annuity only	Usually insurance capacity, not securities	Fixed annuity is generally not a security
Insurance producer sells variable annuity	Securities capacity also	Variable annuity is a security

Registration Decision Table

Person or entity	State registration usually required when	Not usually required when
Broker-dealer	Has office in state or effects securities transactions with noninstitutional state residents	No place of business in state and deals only with specified institutions, issuers, other broker-dealers, or other excluded parties
Agent of broker-dealer	Represents a broker-dealer in securities transactions in the state	Performs only clerical/ministerial duties
Agent of issuer	Represents issuer in nonexempt securities transactions, especially compensated sales activity	Represents issuer in many exempt securities or exempt transactions where agent definition exclusion applies
State-registered investment adviser	Meets adviser definition and is not federal covered or excluded	Excluded professional, publisher, broker-dealer incidental advice, or de minimis/no-place-of-business situation
Federal covered adviser	Usually files notice with state if required	State cannot require full adviser registration
IAR of state adviser	Gives advice, solicits advisory clients, manages portfolios, or supervises those activities in state	Clerical/minimal activity only
IAR of federal covered adviser	Often state registration if the IAR has a place of business in the state	No place of business in the state, subject to federal/state framework

Federal vs State Adviser Registration

Adviser type	General exam treatment	State role
Small adviser	Generally state regulated unless an exemption applies	State registration and examination authority
Mid-sized adviser	Generally state regulated if the state requires registration and examines advisers	State registration unless federal rule exception applies
Large adviser	Generally SEC registered/federal covered	State notice filing, fees, anti-fraud authority, and IAR registration where applicable
Private fund adviser	May have federal or state exemptions depending on facts	Notice/exempt reporting may appear in questions
Federal covered adviser	Not state-registered as an adviser	States may require notice filing and regulate fraud

Jurisdiction: When a State Can Act

Trigger	State jurisdiction likely?	Notes
Offer originates in the state	Yes	Even if buyer is elsewhere
Offer is directed into the state	Yes	Includes communications targeted to state residents
Sale accepted in the state	Yes	Acceptance location matters
Investment advice provided from the state	Yes	Adviser location can create jurisdiction
Investment advice directed to state residents	Yes	Client residence can matter
Bona fide out-of-state publication not targeted to the state	Often no offer in the state	Avoid treating all media as state-directed
Exempt security or exempt transaction	Anti-fraud still applies	Exemption usually affects registration, not fraud liability

“Sale” and “Offer” Traps

Situation	Usually treated as
Contract to sell or disposition for value	Sale
Security given as a bonus with purchase of another item	Sale
Gift of assessable stock	Sale, because recipient may assume liability
Stock dividend with no consideration	Not a sale
Pledge of securities as loan collateral	Usually not a sale
Merger/share exchange	Analyze consideration and statutory treatment
Solicitation of interest before registration	Offer; may be restricted unless permitted

Investment Adviser Status: Three-Part Test

A person is likely acting as an investment adviser when all three are present:

Advice or analysis about securities
As a business
For compensation

Compensation Is Broad

Compensation does not have to be a separate line-item “advisory fee.” It can include:

Flat planning fees
Asset-based fees
Subscription fees
Referral fees
Wrap fees
Indirect economic benefit

Common IA Exclusions Tested

Exclusion Pattern	Key Limitation
Lawyers, accountants, teachers, engineers	Advice must be incidental to the profession
Broker-dealers	Advice must be incidental to brokerage business and no special advisory compensation
Publishers	Must be bona fide, general, regular, and not tailored to individual needs
Banks and certain financial institutions	Treatment depends on the law being tested and facts
Federal covered advisers	Not state-registered as advisers, but states may require notice filings and IAR registration where applicable

Securities Registration and Exemptions

Three Registration Concepts

Method	Used for	Key idea
Notice filing / federal covered notice	Federal covered securities, such as many exchange-listed securities, investment company securities, and certain private offerings	State cannot require full registration but may require filings/fees and retains anti-fraud power
Coordination	Securities also registered with the SEC	State effectiveness coordinates with federal registration
Qualification	Securities registered directly with the state when no simpler method fits	Most detailed state review

Notes and examples

Federal Covered Securities

Category	Exam significance
Exchange-listed securities and securities equal/senior to listed securities	State registration preempted
Investment company securities, including mutual funds	State registration preempted; notice filing may apply
Certain exempt offerings, including common private placement structures	State registration preempted; notice filing and anti-fraud remain
Securities sold to qualified purchasers under federal law	State registration preempted

Exempt Securities vs Exempt Transactions

Concept	What is exempt?	What still applies?	Example
Exempt security	The security itself is exempt from state registration	Anti-fraud, agent/adviser rules where applicable	U.S. government bond
Exempt transaction	Only that specific transaction is exempt	Anti-fraud; later transactions may need registration/exemption	Isolated nonissuer sale
Federal covered security	State registration is preempted by federal law	Anti-fraud and possible notice filing	Mutual fund shares

Common Exempt Securities

Security	Why it is tested	Trap
U.S. government and agency securities	High-quality government issuer	Government exempt does not permit fraud
Municipal securities	Governmental issuer	Agents and broker-dealers may still need registration
Canadian government/provincial securities	Common USA-style exemption	Do not overextend to every foreign corporate issuer
Bank, savings institution, trust company securities	Regulated financial institution	Bank-issued security may be exempt; bank as broker-dealer is separate issue
Insurance company securities	Regulated insurer	Variable insurance products are securities even if issued by insurer
Public utility/common carrier securities	Heavily regulated issuer	Know only if question gives regulated status
Nonprofit/religious/charitable/educational securities	Policy-based exemption	Compensation or resale facts can change analysis
Commercial paper	Short-term, high-quality corporate debt	Long maturity or speculative use may defeat exemption
Federal covered securities	Federal preemption	Notice filing may still be required

Common Exempt Transactions

Transaction	Exam cue	Trap
Isolated nonissuer transaction	One-off sale by holder, not issuer distribution	Frequent sales may look like distribution
Unsolicited brokerage transaction	Customer initiates order	Broker cannot create exemption by calling solicitation “education”
Institutional transaction	Sale to bank, insurance company, investment company, pension, or other institution	Institutional status often removes need for state registration
Issuer-to-underwriter transaction	Part of distribution chain	Public resale may still require registration
Private placement	Limited offerees/purchasers, investment intent, no general solicitation under USA-style facts	Resale to public destroys private character
Fiduciary transaction	Executor, administrator, sheriff, trustee in bankruptcy, guardian	Must be bona fide fiduciary role
Preorganization subscription	Organizing corporation, no commission, limited subscribers, no payment	Receiving funds too early is a red flag
Existing security holder transaction	Rights, warrants, or conversion to existing holders	Commission for soliciting can change treatment
Pledgee sale	Sale by bona fide pledgee	Sham pledge is not exempt
Court-supervised sale	Judicial or regulatory supervision	Still no fraud

Exempt Securities: Quick Recognition

Exempt Security Pattern	Why It Is Tested
U.S. government securities	Government backing and federal framework
Municipal securities	Governmental issuer status
Certain foreign government securities	Often tested by issuer type
Bank and savings institution securities	Financial institution regulation
Insurance company securities	Insurance regulatory framework
Public utility and common carrier securities	Regulated issuer status
Federal covered securities	Preemption from state registration
Certain nonprofit or charitable securities	Issuer purpose may matter
Commercial paper meeting statutory conditions	Short-term, high-quality business financing

Exam trap: municipal bonds are exempt securities, but municipal bond fraud is still fraud.

Exempt Transactions: Quick Recognition

Exempt Transaction Pattern	Key Clue
Isolated nonissuer transaction	Occasional trade by a holder, not issuer distribution
Unsolicited customer order	Customer initiated the trade
Institutional transaction	Banks, insurers, investment companies, pension plans, or other institutions
Fiduciary transaction	Executor, administrator, sheriff, trustee in bankruptcy
Private placement / limited offering	Limited offerees, investment intent, restricted solicitation
Preorganization subscription	Before entity formation, limited subscribers, no commission/payment conditions
Existing security holder transaction	No commission for soliciting may be relevant
Nonissuer transaction in outstanding securities	Publicly available information may matter

Exemption Trap

If a question says the transaction is exempt, do not assume:

The agent is exempt from registration,
Misstatements are allowed,
The next resale is exempt,
The security is automatically exempt.

Federal Covered Securities and Notice Filing

Federal covered securities are generally exempt from state registration requirements, but state authority is not eliminated.

State Role May Still Include

Notice filings where permitted
Filing fees where permitted
Consent to service of process
Antifraud enforcement
Investigation of fraudulent conduct

Common Federal Covered Security Patterns

Pattern	Review Point
Exchange-listed securities	Listed on major national exchanges and certain related securities
Investment company securities	Mutual funds are common exam examples
Securities sold to qualified purchasers	Federal preemption concept
Certain exempt federal transactions	Analyze carefully; do not overgeneralize

Federal Covered Advisers

A federal covered adviser is generally regulated at the SEC registration level rather than registered as an investment adviser in each state.

Key Exam Points

Point	Review
State registration	States generally do not register federal covered advisers as IAs
Notice filing	States may require notice filing, fee, and consent to service where permitted
IAR registration	IARs may still need state registration depending on place of business and activity
Antifraud	State antifraud authority remains important
Custody, brochure, advertising	Federal and state concepts can appear; read the fact pattern

Administrator Powers and Process

Administrator Authority

Power	What it means	Limit
Investigate	Can investigate suspected violations inside or outside the state	Must relate to securities/advisory law authority
Subpoena	Can compel testimony and records	Court assistance may be needed for enforcement
Issue cease-and-desist orders	Can order a person to stop violations	Subject to hearing/procedural rights
Deny/suspend/revoke registration	Applies to firms and individuals	Usually requires public interest plus statutory cause
Require filings and records	Applications, amendments, advertising, financials, books	Federal preemption limits state demands for covered firms
Seek injunction	Goes to court to restrain violations	Administrator does not personally imprison violators
Make rules and forms	Implements statute	Cannot contradict the statute

Notes and examples

Registration Procedure Traps

Rule area	Quick reference
Effective date	Under the Uniform Securities Act model, registration often becomes effective after a set review period unless accelerated or delayed by the Administrator
Consent to service of process	Filed so legal papers can be served through the Administrator
Amendments	Material changes require prompt amendment
Expiration/renewal	Registrations are not permanent; renewal is required
Transferability	Registration is generally not transferable
Dual registration	Agents representing more than one broker-dealer usually need affiliation/approval facts; IAR roles must match adviser relationships
Termination	Firm and individual notification duties can apply when employment ends or changes

Enforcement and Liability

Issue	Exam focus
Public interest standard	Administrator discipline usually requires that action be in the public interest
Statutory cause	Examples include willful violations, material misstatements, insolvency, injunctions, certain convictions, dishonest practices, or lack of qualification
Summary order	Temporary order may be entered quickly, followed by opportunity for hearing
Civil liability	Buyer remedy commonly resembles rescission: consideration paid plus interest, less income received, plus costs/fees where allowed
Criminal liability	Willful violations can be referred for prosecution
No waiver	Customer cannot validly waive protections of securities law through contract boilerplate

State Administrator Powers

The state securities Administrator is a recurring character on the Series 66.

What the Administrator Can Generally Do

Power	Review Point
Require filings	Applications, consents to service, financials, records
Investigate	Public or private investigations, subpoenas, testimony
Issue orders	Stop orders, cease-and-desist orders, suspensions, revocations
Deny or revoke registrations	Usually requires proper grounds and process
Make rules	Rules must be within statutory authority
Cooperate	Can coordinate with other regulators
Enforce antifraud provisions	Even when securities or transactions are exempt

What the Administrator Cannot Do

Cannot	Why It Matters
Approve the merits of a security	Registration is not a recommendation
Waive antifraud liability	Fraud rules remain central
Change federal law	State authority has limits
Punish without required process	Exam answers often turn on notice/opportunity for hearing
Require state registration of federal covered securities as if not covered	Federal preemption matters

Common Liability Patterns

Pattern	Result
Selling unregistered nonexempt securities	Potential rescission/civil liability
Acting while unregistered	Regulatory and civil consequences
Material misstatement or omission	Antifraud liability
Unsuitable or conflicted recommendation	Ethical/regulatory liability
Failure to supervise	Firm and supervisor exposure

Rescission Concept

Rescission generally aims to put the investor back in the position before the unlawful sale, often involving return of consideration plus interest, less income received, depending on the applicable rule and facts.

Exam trap: civil liability and criminal liability are not the same. Criminal penalties usually require appropriate prosecution and proof standards.

Investment Adviser and Broker-Dealer Conduct

Fiduciary vs Transactional Standards

Standard	Applies to	Core duty
Fiduciary duty	Investment advisers and IARs	Put client interests first; duty of care and loyalty
Best interest / fair dealing	Broker-dealers and agents	Recommendations must be in customer’s best interest under applicable standards; disclose and manage conflicts
Suitability	Recommendations by financial professionals	Reasonable basis, customer-specific fit, and no excessive trading
Anti-fraud	Everyone	No material misstatements, omissions, schemes, or deceptive practices

Notes and examples

Adviser Fiduciary Duties

Duty	Practical exam meaning	Red flag
Duty of care	Reasonable investigation and basis for advice	Recommending complex product without understanding it
Duty of loyalty	Full and fair disclosure of material conflicts	Hidden compensation, undisclosed referral fee
Best execution	Seek favorable overall execution, not just lowest commission	Routing trades for adviser benefit
Conflict management	Disclose, mitigate, and obtain consent where required	“Disclosed in fine print” but misleading overall
Ongoing monitoring	Required if adviser agrees to ongoing service	One-time plan does not automatically require continuous monitoring
Fair allocation	Allocate trades fairly among clients	Cherry-picking profitable trades
Confidentiality	Protect client nonpublic information	Sharing holdings with outside marketer without consent

Advisory Contracts

Required or tested item	Quick reference
Services	Contract should describe services to be provided
Fees	Fee formula and billing terms must be clear
Prepaid fees	Refund method for unearned prepaid fees should be disclosed
Assignment	Assignment generally requires client consent
Partnership change	Adviser organized as partnership must notify clients of material membership changes
Performance fees	Generally prohibited unless client qualifies under applicable rule
Hedge clause	Cannot imply client waived nonwaivable legal rights
Oral promises	Do not override required written disclosures

Brochure and Disclosure

Item	Exam treatment
Form ADV Part 2/brochure	Primary adviser disclosure document
Initial delivery	Must be provided before or at contract time under applicable rules
Annual update	Material updates must be provided or offered/delivered as required
Material changes	Must be disclosed promptly
Wrap fee brochure	Required when client pays a bundled advisory/transaction fee
Conflict disclosures	Must be specific enough for informed consent

Custody, Discretion, and Authority

Concept	Meaning	Trap
Custody	Holding client funds/securities or having authority to obtain them	Fee deduction authority, trustee role, or possession of checks can create custody issues
Qualified custodian	Bank, broker-dealer, or other permitted custodian	Adviser should not casually hold client assets
Discretion	Authority to decide asset, amount, or action without prior client approval	Time/price discretion for same-day execution is not full investment discretion
Written discretionary authority	Usually required for discretionary accounts, subject to rule-specific timing	Oral permission is not a permanent substitute
Trading authorization	Limited power to trade differs from authority to withdraw funds	Trading discretion alone is not always custody
Third-party checks	Payable to adviser can create custody concern	Payable to custodian is different

Fees, Compensation, and Conflicts

Practice	Acceptable if	Unethical if
Asset-based advisory fee	Reasonable and disclosed	Excessive or calculated on undisclosed basis
Commissions	Disclosed and suitable/best interest	Churning or recommending to generate compensation
Referral/solicitor fee	Written arrangement and required disclosures	Hidden cash payment for client referral
Soft dollars	Benefits clients and are properly disclosed	Used for adviser overhead or undisclosed benefit
Principal transaction	Required disclosure and consent obtained before completion	Adviser sells from own inventory without consent
Agency cross transaction	Required disclosure, consent, and confirmations	Adviser places itself on both sides without safeguards
Performance fee	Client meets qualification and rule permits	Charged to ordinary retail client when prohibited

Core Definitions

Role	What They Do	Compensation Trigger?	Typical Exam Clue
Broker-dealer	Effects securities transactions for customers or its own account as a business	Transaction compensation often appears	“Executes trades,” “solicits securities transactions”
Agent	Individual representing a broker-dealer or certain issuers in securities transactions	Usually tied to securities transaction activity	“Registered representative,” “salesperson”
Investment adviser	Provides advice, reports, or analysis about securities as a business for compensation	Yes	“Financial planner charging a fee,” “portfolio advice”
Investment adviser representative	Individual associated with an investment adviser who gives advice, manages accounts, solicits advisory services, or supervises	Usually compensated through adviser relationship	“Advisory representative,” “portfolio manager”

Broker-Dealer vs Investment Adviser Decision Rule

If the person primarily…	Think…
Executes securities transactions	Broker-dealer/agent rules
Gives securities advice for a fee	Investment adviser/IAR rules
Gives incidental advice with no special advisory compensation	May remain broker-dealer activity
Charges a financial planning fee and recommends securities	Investment adviser analysis
Publishes impersonal general market commentary	Publisher exclusion may be relevant
Gives advice only about nonsecurities	IA status may not apply unless securities advice is involved

Agent vs IAR

Question	Agent	IAR
Associated with whom?	Broker-dealer or issuer	Investment adviser or federal covered adviser
Main function	Securities transactions	Securities advice, account management, advisory solicitation
Exam clue	Commission, trade execution, securities sale	Advisory fee, portfolio recommendation, financial planning
Can one person be both?	Yes, if properly registered/qualified where required	Yes, dual capacity creates conflict-disclosure issues

Advisory Contract Items to Recognize

Topic	Exam Review
Services	What the adviser will provide
Fees	How fees are calculated and billed
Discretion	Whether adviser may trade without prior client approval
Assignment	Assignment generally requires client consent
Partnership changes	Clients may need notification
Custody	Must be disclosed and controlled
Termination	Refunds and prepaid fees may matter
Conflicts	Material conflicts must be disclosed

Brochure / Form ADV Concepts

Know what the disclosure document is meant to communicate:

Advisory services
Fees and compensation
Methods of analysis
Disciplinary history
Conflicts of interest
Brokerage practices
Custody
Review of accounts
Financial information when relevant

Exam trap: disclosure must be clear and meaningful, not buried in vague language.

Custody

Custody means holding client funds/securities or having authority that gives access to them.

Custody Clue	Why It Matters
Adviser can withdraw fees directly	May create custody issues
Adviser holds client checks or securities	Safeguards required
Adviser has power of attorney to move funds	Authority may equal custody
Adviser is trustee for client assets	Custody analysis likely

Discretion

Discretion is the authority to decide:

What security to buy or sell,
How much to buy or sell,
Whether to buy or sell.

Time and price discretion alone is often treated differently and may be more limited.

Client Authorization

Activity	Usually Requires
Discretionary trading	Written client authorization and firm/adviser acceptance
Custody	Disclosure and safeguards
Principal transaction by adviser	Disclosure and client consent before completion
Assignment of advisory contract	Client consent
Margin trading	Margin agreement and suitability analysis

Unethical and Prohibited Practices

Practice	Description	Exam cue
Misrepresentation	False statement of material fact	“Guaranteed,” “risk-free,” “approved by NASAA/SEC”
Omission	Leaving out material fact	Fails to disclose surrender charge or conflict
Churning	Excessive trading for compensation	High turnover inconsistent with client objective
Unauthorized trading	Trade without authority	“Client would have approved anyway” is not a defense
Unsuitable recommendation	Product does not fit client profile	Illiquid DPP for emergency-fund investor
Front running	Trading ahead of client/order knowledge	Representative buys before large client purchase
Insider trading	Trading on material nonpublic information	Tippee/tipper liability
Market manipulation	Artificial price/activity	Wash trades, matched orders, pump-and-dump
Selling away	Private securities transaction outside firm approval	Rep sells startup notes off platform
Borrowing from customer	Generally prohibited unless narrow permitted relationship/procedure	Customer is elderly client, not lending institution
Lending to customer	Generally prohibited unless firm rules and relationship permit	Rep personally loans trading money
Commingling	Mixing customer and firm/rep assets	Customer checks deposited into rep account
Conversion	Taking customer property	Unauthorized withdrawal
Guaranteeing performance	Promise against loss or profit	“You cannot lose”
Sharing in profits/losses	Only allowed under strict firm/customer proportional arrangements	Rep covers customer losses
False advertising	Misleading testimonials, charts, ratings, or selective performance	Cherry-picked winners
Breakpoint sale	Mutual fund sale just below discount level	Splitting purchases to avoid breakpoint
Switching	Moving products mainly for compensation	Variable annuity replacement with no benefit
Backdating/altering forms	False books and records	“Fixing” risk tolerance after complaint
Failing to supervise	Firm does not monitor representatives	Repeated red flags ignored

Product and Account Selection

Security or Not?

Product	Security?	Exam note
Common stock	Yes	Equity ownership
Preferred stock	Yes	Hybrid equity/income features
Corporate bond	Yes	Debt security
Municipal bond	Yes	Exempt security, but still a security
Mutual fund	Yes	Investment company security
ETF	Yes	Exchange-traded pooled product
UIT	Yes	Fixed portfolio investment company
REIT	Yes	Real estate security; can be traded or nontraded
Limited partnership/DPP	Yes	Passive investment contract/partnership interest
Variable annuity	Yes	Insurance plus separate account market risk
Variable life insurance	Yes	Insurance plus securities component
Fixed annuity	Generally no	Insurance product
Fixed life insurance	Generally no	Insurance product
Commodity futures contract	Generally no for Series 66 securities classification	Regulated separately
Collectibles	No	Not a security by themselves

Notes and examples

Equity Products

Product	Investor profile	Main risks	Tax/other notes
Common stock	Growth, voting rights, inflation hedge potential	Market, business, dividend uncertainty	Dividends and capital gains taxable unless in tax-advantaged account
Preferred stock	Income-focused investor wanting priority over common	Interest-rate risk, call risk, limited growth	Dividends may be fixed; may be cumulative/convertible/callable
Convertible preferred/bond	Income plus upside participation	Call risk, equity downside, dilution	Conversion value matters
Rights	Existing shareholders; short-term purchase privilege	Expiration risk	Usually below market subscription price
Warrants	Long-term purchase option	Speculative, expiration risk	Often attached to debt/preferred

Fixed Income Products

Product	Best fit	Main risks	Trap
Treasury securities	Safety of principal/interest; liquidity	Interest-rate and inflation risk	Interest federally taxable, generally state/local exempt
Agency securities	Income, high credit quality	Credit varies by agency; prepayment for mortgage-backed	Not all are direct U.S. government obligations
Corporate bonds	Income	Credit/default, interest-rate, call, liquidity	Higher yield usually means higher risk
Municipal GO bonds	Tax-sensitive income	Tax revenue/issuer credit risk	Backed by taxing power
Municipal revenue bonds	Tax-sensitive income tied to project	Project revenue risk	Not backed by general taxing power
Zero-coupon bonds	Known future value, long horizon	High duration, phantom income in taxable account	No periodic interest
Callable bonds	Higher coupon for issuer call option	Reinvestment risk	Likely called when rates fall
Put bonds	Investor can put back to issuer	Lower yield	Useful when rates rise
Convertible bonds	Income plus equity upside	Credit and equity risk	Lower coupon than straight debt
TIPS	Inflation protection	Real-rate risk, tax on inflation adjustment	Principal adjusts with inflation

Bond Yield Relationships

Bond price	Yield order	Meaning
Discount bond	Coupon rate < current yield < yield to maturity	Pull to par increases return
Premium bond	Yield to maturity < current yield < coupon rate	Pull to par reduces return
Par bond	Coupon rate = current yield = yield to maturity	Price equals face value
Callable premium bond	Yield to call may be lower than yield to maturity	Early call hurts premium buyer

Investment Companies and Pooled Products

Product	Structure	Best fit	Trap
Open-end mutual fund	Redeemable at NAV; priced forward once per day	Diversification and professional management	Sales charge affects return
Closed-end fund	Exchange-traded; fixed shares	Intraday trading, possible discounts/premiums	Market price may differ from NAV
ETF	Exchange-traded basket	Low cost, tax efficiency, intraday liquidity	Leveraged/inverse ETFs are not simple long-term products
UIT	Fixed unmanaged portfolio, termination date	Defined portfolio exposure	Limited active management
Money market fund	Short-term instruments	Liquidity and stability objective	Not guaranteed like bank deposit
Hedge/private fund	Private pooled strategy	Sophisticated/high-net-worth investors	Illiquidity, leverage, valuation risk
REIT	Real estate portfolio	Real estate exposure/income	Nontraded REITs can be illiquid and costly
DPP/limited partnership	Flow-through tax and business exposure	Sophisticated investors with long horizon	Passive losses, illiquidity, suitability issues

Share class	Cost pattern	Better fit	Trap
Class A	Front-end sales charge; breakpoints; lower ongoing expenses	Larger or longer-term purchases	Breakpoint sales are unethical
Class B	Contingent deferred sales charge; higher ongoing expenses; may convert	Smaller purchases with medium horizon	Often poor for large/long-term investors
Class C	Level load/higher ongoing expenses	Shorter holding periods	Expensive if held long term
No-load	No sales load	Cost-sensitive investors	May still have operating expenses
Institutional	Low expenses, eligibility minimums	Qualified large investors/plans	Not available to all clients

Annuities and Insurance

Product	Security?	Main use	Key risks/traps
Fixed annuity	Generally no	Tax-deferred fixed income from insurer	Inflation, surrender charges, insurer credit risk
Variable annuity	Yes	Tax-deferred market participation with annuity features	Market risk, fees, surrender charges, ordinary income taxation on gains
Immediate annuity	Depends on fixed/variable	Current income	Irrevocability/liquidity limits
Deferred annuity	Depends on fixed/variable	Accumulation before payout	Surrender period and tax penalties may apply
Term life	No	Pure death benefit for period	No cash value
Whole life	No	Permanent insurance with cash value	Higher premiums, lower flexibility
Universal life	No, unless variable	Flexible premium/death benefit	Policy lapse if underfunded
Variable life	Yes	Insurance plus investment subaccounts	Securities registration and prospectus issues

Options Cheat Sheet

Position	Market view	Max gain	Max loss	Breakeven
Long call	Bullish	Unlimited	Premium	Strike + premium
Short call	Neutral/bearish	Premium	Unlimited	Strike + premium
Long put	Bearish	Strike minus premium, if stock goes to zero	Premium	Strike - premium
Short put	Neutral/bullish	Premium	Strike minus premium, if stock goes to zero	Strike - premium
Covered call	Neutral/moderately bullish	Limited	Stock downside reduced by premium	Stock cost - premium
Protective put	Bullish but wants floor	Upside minus premium	Limited	Stock cost + premium

Portfolio, Risk, and Economics

Risk Types

Risk	Meaning	Reduced by diversification?	Most affected products
Market/systematic risk	Overall market movement	No	Stocks, equity funds
Business/unsystematic risk	Company-specific risk	Yes	Individual stocks/bonds
Interest-rate risk	Bond prices fall when rates rise	Partly	Long-term bonds, preferred stock
Reinvestment risk	Income reinvested at lower rates	Partly	Callable bonds, high-coupon bonds
Call risk	Issuer redeems when rates fall	No for that bond	Callable bonds/preferred
Credit/default risk	Issuer cannot pay	Partly	Corporate, revenue, high-yield bonds
Inflation/purchasing power risk	Returns fail to keep up with prices	Partly	Cash, fixed income
Liquidity risk	Cannot sell quickly at fair price	Partly	DPPs, nontraded REITs, thin bonds
Political/regulatory risk	Law or policy change hurts value	Partly	Munis, regulated industries
Currency risk	Exchange-rate movement	Partly	Foreign investments
Prepayment risk	Principal returned early	No for that security	Mortgage-backed securities
Extension risk	Principal returned slower than expected	No for that security	Mortgage-backed securities

Notes and examples

Modern Portfolio Theory Terms

Term	Meaning	Exam use
Expected return	Probability-weighted average return	Compare uncertain outcomes
Standard deviation	Total volatility	Higher means wider return dispersion
Beta	Sensitivity to market movement	Beta 1 equals market; above 1 more volatile than market
Alpha	Return above/below risk-adjusted expected return	Positive alpha means outperformance after risk adjustment
Correlation	Degree assets move together	Low/negative correlation improves diversification
Covariance	Directional co-movement measure	Basis for correlation
Efficient frontier	Portfolios with best expected return for given risk	Rational investor chooses on frontier
Capital market line	Efficient portfolios using risk-free asset and market portfolio	Sharpe ratio concept
Sharpe ratio	Excess return per unit of total risk	Uses standard deviation
Treynor ratio	Excess return per unit of market risk	Uses beta
R-squared	Percent of portfolio movement explained by benchmark	Low R-squared makes beta less meaningful
Dollar-cost averaging	Invest fixed dollars at intervals	Does not assure profit or prevent loss
Rebalancing	Restore target allocation	Controls drift; may trigger taxes

Economic Indicators and Policy

Indicator or policy	Meaning	Investment effect
GDP	Total economic output	Growth supports earnings; contraction signals recession
CPI	Consumer inflation measure	Higher inflation pressures rates and purchasing power
PPI	Producer/input inflation	Can lead consumer prices
Unemployment	Labor market condition	Often lagging indicator
Yield curve	Short vs long rates	Inversion can signal recession concern
Leading indicators	Tend to move before economy	New orders, permits, market expectations
Coincident indicators	Move with economy	Production, employment
Lagging indicators	Confirm after trend	Unemployment, corporate profits in some contexts
Fed buys securities	Adds liquidity; tends to lower rates	Stimulative
Fed sells securities	Removes liquidity; tends to raise rates	Restrictive
Higher interest rates	Slows borrowing/spending	Bond prices generally fall
Lower interest rates	Encourages borrowing/spending	Bond prices generally rise
Defensive stocks	Less sensitive to cycle	Utilities, consumer staples, healthcare
Cyclical stocks	More sensitive to cycle	Industrials, discretionary, materials

Client Profile, Suitability, and Planning

Know-Your-Client Data

Data point	Why it matters
Age and time horizon	Determines ability to accept volatility and illiquidity
Income and net worth	Determines capacity for risk and need for income
Tax status	Affects muni bonds, retirement accounts, harvesting, product placement
Investment objective	Growth, income, preservation, speculation, liquidity
Risk tolerance	Emotional willingness to accept loss
Risk capacity	Financial ability to absorb loss
Liquidity needs	Emergency reserves, upcoming purchases, distributions
Experience and sophistication	Complexity suitability
Existing holdings	Concentration and correlation
Legal constraints	Trust, entity, retirement plan, custodial rules
Ethical/social constraints	ESG or restricted securities
Beneficiaries/estate needs	Account titling, TOD, trusts, insurance

Notes and examples

Suitability Decision Rules

Client fact	Usually points toward	Usually avoid
Short time horizon and emergency need	Cash equivalents, short-term high-quality debt	DPPs, nontraded REITs, long-term volatile products
High tax bracket seeking income	Municipal bonds/funds, tax-efficient strategies	High-turnover taxable funds without reason
Retired, needs stable income	Diversified income portfolio, laddered bonds, appropriate annuity analysis	Concentrated small-cap speculation
Young, long horizon, stable income	Growth allocation, diversified equity exposure	Excess idle cash if objective is growth
Low risk tolerance	Conservative allocation, high-quality debt	Leveraged/inverse products, options speculation
High risk capacity but low risk tolerance	Respect tolerance; educate but do not force risk	“Can afford it” as sole rationale
Concentrated employer stock	Diversification plan	More employer stock without strong reason
Needs tax deferral and has maxed retirement plans	Consider annuity only after cost/liquidity review	Variable annuity in IRA solely for tax deferral
Sophisticated accredited investor	Alternatives may be considered	Assuming accreditation alone equals suitability
Elderly client with cognitive red flags	Escalate, document, protect client	Taking suspicious instructions without review

Account Ownership and Estate Concepts

Concept	Meaning	Exam trap
Individual account	One owner controls assets	Probate may apply unless beneficiary/TOD
Joint tenants with rights of survivorship	Survivor owns automatically	Not controlled by will at first death
Tenants in common	Each owner has divisible interest	Deceased owner’s share goes through estate
Tenancy by entirety	Spousal ownership in some states	State-specific; do not assume for all
TOD/POD	Transfer/payable on death beneficiary	Avoids probate for that asset
UGMA/UTMA	Custodial account for minor	Irrevocable gift to minor; custodian controls until termination age
Trust	Legal arrangement with grantor, trustee, beneficiary	Trustee must follow trust and fiduciary duties
Revocable trust	Grantor can amend/revoke	Usually included in grantor estate
Irrevocable trust	Generally cannot be changed easily	May remove control/ownership
Durable power of attorney	Agent can act if principal incapacitated	Authority must be valid and within scope
Will	Directs probate estate	Does not override beneficiary designations

Retirement and Education Accounts

Account	Core tax treatment	Best exam cue
Traditional IRA	Potential pretax/deductible contributions; tax-deferred growth; distributions generally ordinary income	Current deduction or tax deferral
Roth IRA	After-tax contributions; qualified distributions generally tax-free	Long horizon and future tax-free withdrawals
401(k)	Employer plan; salary deferral; may include match	Workplace retirement savings
Roth 401(k)	After-tax salary deferral; qualified tax-free withdrawals	Employer plan plus Roth tax profile
403(b)	Tax-favored plan for certain schools/nonprofits	Similar retirement role to 401(k)
457	Deferred compensation plan for governmental/certain nonprofit employees	Public-sector/nonprofit cue
SEP IRA	Employer-funded plan often for small business/self-employed	Simple employer contribution structure
SIMPLE IRA	Small employer plan with employee salary deferral	Small business retirement plan
529 plan	Education savings, tax-advantaged if used for qualified education	College planning; investment risk remains
Coverdell ESA	Education savings with broader education expense use	Contribution/eligibility details may be tested by courses
HSA	Tax-advantaged medical savings when eligible	Medical expenses and high-deductible health plan context

Tax Cheat Sheet

Investment Tax Treatment

Item	Federal tax treatment, exam level	Trap
Corporate bond interest	Taxable as ordinary income	Higher nominal yield may lose after tax
Treasury interest	Federally taxable, generally exempt from state/local tax	Not federal tax-free
Municipal bond interest	Generally federally tax-exempt; may be state/local exempt for in-state residents	Private activity bonds can have AMT issues
Capital gains	Taxed when realized	Unrealized gain is not currently taxed
Short-term capital gain	Generally ordinary income rate treatment	Holding period matters
Long-term capital gain	Preferential rate treatment may apply	Do not treat all gains the same
Qualified dividends	May receive preferential treatment	Not every dividend is qualified
REIT dividends	Often ordinary income character	Not automatically qualified dividends
Mutual fund distributions	Taxable to shareholder if in taxable account	Reinvested distributions still taxable
Tax-loss harvesting	Realize losses to offset gains	Wash sale rules can disallow loss
Zero-coupon bond accretion	Taxable phantom income may occur	No cash received despite tax income
Annuity nonqualified gain	Generally ordinary income when withdrawn	Not capital gain treatment
Retirement account distribution	Depends on account type	Tax deferral is not tax elimination

Notes and examples

Tax-Equivalent Yield

Use when comparing tax-free municipal yield with taxable yield.

\[ \text{Taxable-equivalent yield} = \frac{\text{Tax-free yield}}{1 - \text{Marginal tax rate}} \]\[ \text{Tax-free equivalent yield} = \text{Taxable yield} \times (1 - \text{Marginal tax rate}) \]

Example: a 3.6% municipal yield for a 32% bracket investor has taxable-equivalent yield of 3.6% / 0.68 = 5.29%.

Tax Treatment Quick Table

Item	General Review
Interest income	Often taxed as ordinary income unless tax-exempt
Qualified dividends	May receive favorable tax rates if conditions are met
Short-term capital gains	Generally taxed less favorably than long-term gains
Long-term capital gains	Often receive favorable tax treatment
Municipal interest	May be federally tax exempt; state treatment depends on facts
Retirement account distributions	Tax treatment depends on account type and contribution basis
Tax-deferred growth	Tax delayed, not eliminated
Tax-loss harvesting	Realized losses may offset gains subject to rules

Retirement Account Concepts

Account Type	Review Point
Traditional IRA	Possible deductible contributions; taxable distributions
Roth IRA	After-tax contributions; qualified distributions may be tax free
401(k) / qualified plan	Employer plan rules; salary deferral and fiduciary concepts
SEP / SIMPLE	Small business retirement plan patterns
529 plan	Education funding; tax benefits depend on use and state rules
Coverdell ESA	Education savings; contribution limits are not usually the core concept

Avoid relying on stale annual dollar limits unless your current exam materials require them. Focus on tax treatment, suitability, access, penalties, and objective.

Formula Sheet

Return and Valuation

Formula	Plain-text formula	Use
Holding-period return	(Ending value - Beginning value + Income) / Beginning value	Total return over period
Current yield	Annual income / Current market price	Bond or income security income rate
Total return	Income + price change, divided by beginning value	Includes income and appreciation/depreciation
Expected return	Sum of each probability x return	Probability scenarios
Future value	PV x (1 + r)^n	Compound growth
Present value	FV / (1 + r)^n	Discount future cash flow
Rule of 72	72 / annual return percent	Approximate years to double
Real return approximation	Nominal return - inflation rate	Purchasing power estimate

Notes and examples

\[ \text{Holding-period return} = \frac{\text{Ending value} - \text{Beginning value} + \text{Income}} {\text{Beginning value}} \]\[ \text{Expected return} = \sum(\text{Probability} \times \text{Return}) \]

Risk-Adjusted Performance

Measure	Plain-text formula	Interprets
Sharpe ratio	(Portfolio return - Risk-free return) / Standard deviation	Excess return per unit of total risk
Treynor ratio	(Portfolio return - Risk-free return) / Beta	Excess return per unit of market risk
Jensen alpha	Actual return - CAPM required return	Risk-adjusted outperformance
CAPM expected return	Risk-free rate + Beta x (Market return - Risk-free rate)	Required return for systematic risk

\[ \text{CAPM required return} = R_f + \beta(R_m - R_f) \]

Bond and Fund Math

Formula	Plain-text formula	Use
Bond current yield	Annual coupon dollars / Market price	Income yield
Conversion ratio	Par value / Conversion price	Convertible bonds/preferred
Parity price of convertible	Market price of common x Conversion ratio	Conversion value
Mutual fund NAV	(Assets - Liabilities) / Shares outstanding	Fund share value
Public offering price	NAV / (1 - Sales charge percentage)	Front-end load fund price
Sales charge percentage	(POP - NAV) / POP	Load as percent of offering price

Financial Statement Ratios

Ratio	Plain-text formula	What it shows
Balance sheet equation	Assets = Liabilities + Equity	Accounting foundation
Working capital	Current assets - Current liabilities	Short-term liquidity dollars
Current ratio	Current assets / Current liabilities	Short-term liquidity
Quick ratio	(Cash + Marketable securities + Receivables) / Current liabilities	Stricter liquidity
Debt-to-equity	Total debt / Shareholders’ equity	Leverage
Earnings per share	Earnings available to common / Common shares outstanding	Profit per share
P/E ratio	Market price per share / EPS	Valuation multiple
Dividend payout ratio	Annual dividends per share / EPS	Earnings paid as dividends
Dividend yield	Annual dividends per share / Market price	Income return
Book value per share	Common equity / Common shares outstanding	Accounting value per share

Scenario Decision Checklists

Is It a Security?

Is there an investment of money or value?
Is there expectation of profit, income, appreciation, or participation?
Are returns primarily dependent on issuer, manager, promoter, or third-party efforts?
Is it specifically listed as a security, such as stock, bond, note, option, investment contract, variable annuity, or limited partnership?
Is there a specific exclusion, such as fixed insurance, commodity futures, or collectibles?

Does the State Require Securities Registration?

Step	Ask	If yes
1	Is it a security?	Continue
2	Is there an offer or sale in the state?	Continue
3	Is it a federal covered security?	State registration preempted; notice filing may apply
4	Is the security exempt?	No state securities registration, but anti-fraud applies
5	Is the transaction exempt?	That transaction exempt; later transactions still analyze
6	No exemption?	State registration required before lawful offer/sale

Notes and examples

Does the Person Need Registration?

Step	Ask	Likely result
1	Is the person an individual or firm/entity?	Individuals are agents/IARs; entities are BDs/IAs/issuers
2	Are they effecting securities transactions?	BD/agent analysis
3	Are they giving securities advice for compensation as a business?	IA/IAR analysis
4	Is there a place of business in the state?	Strong registration trigger
5	Are clients retail state residents?	Strong registration trigger
6	Is there an exclusion or exemption?	May avoid registration, not anti-fraud
7	Is the adviser SEC registered?	Federal covered; state notice/IAR rules remain

Is the Recommendation Suitable?

Identify client objective, risk tolerance, risk capacity, time horizon, liquidity need, tax status, and experience.
Identify product risks, costs, liquidity, tax treatment, complexity, and compensation.
Compare product time horizon with client time horizon.
Compare downside risk with client risk tolerance and capacity.
Check concentration in issuer, sector, product type, and tax wrapper.
Check whether a lower-cost or simpler product would meet the same objective.
Document rationale and disclosures.
Avoid treating client consent as a cure for an unsuitable recommendation.

Final Review Traps

If the question says…	Think…
“Guaranteed no loss”	Misrepresentation unless specific valid guarantee is fully disclosed; securities returns are not guaranteed
“Exempt security”	Registration exemption, not anti-fraud exemption
“Unsolicited order”	Transaction may be exempt; agent/BD conduct rules still apply
“Federal covered”	State registration preempted; notice filing and anti-fraud remain
“No separate advisory fee”	Adviser exclusion may apply only if advice is incidental to brokerage and no special compensation
“Financial planner”	If securities advice for compensation, adviser analysis
“Variable” insurance product	Security
“Fixed” insurance product	Usually not a security
“Agent of issuer”	May or may not need registration depending on security, transaction, and compensation
“Customer approved after the fact”	Does not fix unauthorized trading
“High return needed”	Need does not equal suitability for high risk
“Accredited investor”	Eligibility does not automatically equal suitability
“Tax-free”	Usually means federal tax-free muni interest; check state, AMT, capital gains
“Discretion over time and price only”	Usually not full discretionary authority
“Custody”	Look for possession or ability to withdraw, not merely ability to trade
“Past performance chart”	Must be fair, balanced, and not misleading
“Administrator approved”	Regulators do not approve securities as good investments

Series 66 Cheat Sheet

The NASAA Series 66 — Uniform Combined State Law Examination, exam code Series 66, tests whether you can apply state securities law concepts, ethical standards, investment adviser and broker-dealer rules, product knowledge, and client recommendation principles in realistic exam scenarios.

Use this page as a fast final review before moving into topic drills, mock exams, and detailed explanations. It is independent exam-prep support, not an official NASAA document and not affiliated with NASAA.

Notes and examples

Legal Concept Mistakes

Confusing agent and IAR registration.
Treating federal covered securities as completely outside state authority.
Forgetting antifraud applies to exempt securities and transactions.
Assuming an issuer employee is always an agent.
Assuming a financial planner is not an adviser because they do not trade.
Missing that compensation can be indirect.
Believing registration equals regulatory approval.
Ignoring consent to service of process and notice filing concepts.

Recommendation Mistakes

Choosing the highest-yield product without considering risk.
Ignoring the client’s liquidity need.
Forgetting time horizon.
Matching tax-exempt bonds to low-bracket or tax-deferred accounts without analysis.
Recommending variable annuities for short-term needs.
Ignoring surrender charges and expenses.
Treating all retirees as identical.
Treating risk tolerance and risk capacity as the same.

Calculation Mistakes

Using par value instead of market price for current yield.
Forgetting tax-equivalent yield only matters for comparing tax-free and taxable yields.
Confusing nominal return with real return.
Misreading basis points.
Treating bond price and yield as moving in the same direction.
Ignoring beta direction in CAPM-style questions.

How to Think on Series 66 Questions

Series 66 questions often test the same facts from different angles. Slow down enough to identify the role, the product, the customer, and the legal trigger.

The Four Questions to Ask First

Question	Why It Matters	Common Trap
Is the item a security?	Determines whether securities laws and antifraud rules apply	Assuming all financial products are securities
Who is acting?	Broker-dealer, agent, investment adviser, or IAR rules differ	Treating an agent like an investment adviser representative
What activity is occurring?	Advice, solicitation, execution, custody, discretion, advertising, or offering	Missing compensation or “business” activity
Is it registered, exempt, or federal covered?	Registration analysis is separate from antifraud liability	Thinking “exempt” means “no rules apply”

Notes and examples

Core Exam Mindset

Registration does not mean approval. A regulator allowing registration to become effective is not a merit endorsement.
Exempt from registration does not mean exempt from antifraud.
Client consent matters. Assignment, discretionary trading, custody, principal transactions, and conflicts often require disclosure and/or consent.
Compensation changes classification. A person giving securities advice “for compensation” may become an investment adviser.
Fiduciary language is powerful. Investment advisers and IARs are generally tested through loyalty, care, disclosure, conflicts, and best-interest principles.
Suitability/recommendation facts matter. Age, liquidity needs, time horizon, tax status, objectives, risk tolerance, and investment experience can change the best answer.

High-Yield Topic Map

Area	Know Cold	Exam Traps to Drill
Uniform Securities Act concepts	Administrator authority, registrations, exemptions, antifraud	Confusing exempt securities with exempt transactions
Broker-dealers and agents	Definitions, registration, exclusions, unethical practices	Assuming issuer representatives are always agents
Investment advisers and IARs	Compensation, business of advice, fiduciary duty, contracts, custody	Missing that financial planning can be securities advice
Federal covered securities/advisers	State notice filing vs state registration	Believing states lose all antifraud authority
Investment vehicles	Stocks, bonds, funds, ETFs, annuities, options, alternatives	Matching product risk to the wrong client profile
Portfolio theory	Diversification, correlation, beta, alpha, Sharpe, CAPM basics	Treating diversification as eliminating systematic risk
Client recommendations	Suitability, best interest, constraints, taxes, retirement goals	Ignoring liquidity, time horizon, or tax bracket
Ethics	Misrepresentation, guarantees, churning, unauthorized trading, conflicts	“Everyone does it” is never a defense

Fast Legal Classification Workflow

    flowchart TD
	    A[Start with the facts] --> B{Is it a security?}
	    B -- No --> C[Series 66 securities rules may not be the main issue]
	    B -- Yes --> D{Is someone effecting transactions?}
	    D -- Yes --> E[Analyze broker-dealer or agent status]
	    D -- No --> F{Is someone giving securities advice for compensation?}
	    F -- Yes --> G[Analyze investment adviser or IAR status]
	    F -- No --> H[Analyze issuer, investor, or exempt activity]
	    E --> I{Registration or exclusion?}
	    G --> I
	    H --> J{Security or transaction registered, exempt, or federal covered?}
	    I --> K[Apply antifraud and ethical rules regardless]
	    J --> K

Securities Law Foundations

“Security” — High-Yield Recognition

A security is broader than common stock. Series 66 questions commonly use examples that look ordinary but are legally securities.

Usually Treated as Securities	Often Not Treated as Securities
Common stock and preferred stock	Fixed insurance policies
Corporate bonds and debentures	Traditional bank certificates of deposit
Municipal bonds	Collectibles bought for personal use
Mutual fund shares	Commodities themselves, when not structured as securities
ETFs and closed-end fund shares	Real estate purchased for personal occupancy
Options on securities	Some retirement or insurance arrangements depending on structure
Limited partnership interests	General partnership interests in many cases
Investment contracts	Pure service contracts without investment expectation

Notes and examples

Investment Contract Test — Quick Memory

An investment contract generally involves:

An investment of money,
In a common enterprise,
With an expectation of profit,
Primarily from the efforts of others.

Exam trap: if the investor is truly controlling the business, the “efforts of others” element may be weaker. If the investor is passive and relies on a promoter or manager, securities treatment is more likely.

Registration vs Exemption: Do Not Mix the Buckets

Three Separate Registration Questions

Question	Examples	Key Point
Is the person registered or excluded?	Broker-dealer, agent, investment adviser, IAR	Person registration is separate from product registration
Is the security registered, exempt, or federal covered?	Stock offering, municipal bond, mutual fund	A security can avoid state registration but still be subject to antifraud rules
Is the transaction exempt?	Isolated nonissuer trade, unsolicited order, institutional transaction	Transaction exemption does not necessarily exempt future trades

Exempt Security vs Exempt Transaction

Concept	Focus	Example Pattern	Trap
Exempt security	The type of security	Government or municipal security	Still subject to antifraud rules
Exempt transaction	The circumstances of the trade	Unsolicited customer order	Security itself may not be exempt
Federal covered security	Preemption from state registration	Exchange-listed securities, mutual fund shares	States may still require notice filings in some cases and enforce antifraud rules

Security Registration Methods

Method	Used When	Cheat Sheet
Filing / notification	Often for established issuers meeting conditions	Less intensive state review
Coordination	Coordinated with federal Securities Act registration	State effectiveness often follows federal effectiveness if conditions are met
Qualification	Used when other methods are unavailable	Most direct state review; effective by Administrator order

Stop Order Triggers

A stop order may appear when:

Filing is incomplete or misleading
Required fees are unpaid
Offering would work a fraud
Issuer or key persons have disqualifying history
Offering terms are unfair or inequitable under applicable standards
Securities are subject to other regulatory issues

Exam trap: a stop order is not automatically permanent; facts about notice, hearing, correction, and timing can matter.

Ethical Practices: High-Yield Prohibited Conduct

Fraud and Misrepresentation

Never choose an answer that permits:

Omitting material facts
Guaranteeing returns
Predicting performance as certain
Saying registration means approval
Misstating risks, fees, liquidity, or tax consequences
Hiding conflicts of interest
Using testimonials or performance claims in a misleading way
Borrowing from or lending to clients outside permitted arrangements
Falsifying records or signatures

Notes and examples

Brokerage Practice Traps

Conduct	Why It Is a Problem
Churning	Excessive trading for compensation
Unauthorized trading	Trading without customer authorization
Discretion without written authorization	Discretion requires proper authority and approval
Front-running	Trading ahead of customer orders
Selling away	Private securities transaction outside firm procedures
Breakpoint sale	Recommending mutual fund purchases to avoid discount thresholds
Unsuitable switching	Moving products without client benefit
Markup/markdown abuse	Unfair pricing
Sharing in customer accounts improperly	Requires strict conditions if allowed

Advisory Practice Traps

Conduct	Why It Is a Problem
Failing to disclose conflicts	Breaches duty of loyalty
Custody without safeguards	Client asset protection issue
Assignment without client consent	Advisory contracts restrict assignment
Misleading performance advertising	Past performance, cherry-picking, and hypothetical results are high risk
Improper performance fees	Generally restricted except for eligible clients/arrangements
Principal transaction without disclosure/consent	Adviser acting on both sides creates conflict
Agency cross transaction abuse	Requires disclosure and procedural safeguards
Charging unreasonable fees	Fee level and disclosure matter

Fiduciary Duty for Investment Advisers

Investment advisers and IARs are usually tested under fiduciary principles.

Duty of Care

Duty	Practical Meaning
Reasonable basis	Understand the product and strategy
Client-specific advice	Match recommendation to client profile
Best execution	Seek favorable execution under the circumstances
Ongoing advice	Monitor if the relationship or agreement requires monitoring
Competence	Do not recommend products you do not understand

Duty of Loyalty

Duty	Practical Meaning
Full and fair disclosure	Explain material conflicts clearly
Informed consent	Client must understand important conflicts
Avoid misleading statements	Half-truths can be fraudulent
Put client interests first	Compensation cannot drive the recommendation
Manage conflicts	Disclosure alone may not fix every conflict

Client Profile and Recommendation Analysis

Know the Investor Profile Factors

Factor	Why It Changes the Recommendation
Age	Affects time horizon, risk capacity, income needs
Income	Determines ability to absorb loss and fund goals
Net worth	Indicates financial strength and concentration risk
Liquidity needs	Illiquid products may be unsuitable
Tax status	Municipal bonds, retirement accounts, gains/losses
Investment objectives	Growth, income, preservation, speculation
Risk tolerance	Emotional willingness to accept volatility
Risk capacity	Financial ability to absorb loss
Time horizon	Short horizon generally reduces equity/speculative suitability
Investment experience	Complexity must match understanding
Constraints	Legal, ethical, religious, family, estate, or employer restrictions

Notes and examples

Recommendation Decision Table

Client Fact	Usually Points Toward	Usually Points Away From
Needs emergency liquidity	Cash equivalents, money market funds, short-term instruments	Limited partnerships, nontraded REITs, long lockups
High tax bracket seeking income	Municipal bonds, tax-managed strategies	High-turnover taxable strategies
Long horizon, growth objective	Diversified equities, growth funds	Excessive cash allocation
Retired, needs stable income	Quality bonds, dividend income, balanced income strategy	Speculative options, highly volatile concentration
Low risk tolerance	Diversification, high-quality fixed income	Leverage, penny stocks, aggressive sector funds
Inflation concern	Equities, TIPS-like exposure, real assets	Long-duration nominal bonds only
Concentrated employer stock	Diversification plan	More exposure to same employer/sector
Short-term goal	Capital preservation	Volatile growth portfolio

Investment Vehicles Cheat Sheet

Common Stock

Feature	Review
Ownership	Equity ownership in corporation
Return	Dividends and capital appreciation
Risk	Business risk, market risk, lower priority in liquidation
Voting	Usually voting rights
Best for	Long-term growth and inflation protection potential

Notes and examples

Preferred Stock

Feature	Review
Income	Fixed dividend tendency
Priority	Above common, below debt
Voting	Usually limited
Interest-rate sensitivity	Often behaves partly like a bond
Trap	Not as safe as bonds; dividends can be missed unless cumulative feature helps

Bonds

Bond Concept	Exam Review
Coupon	Stated interest rate on par value
Current yield	Annual income divided by current price
Yield to maturity	Total return if held to maturity, considering price discount/premium
Yield to call	Return if called before maturity
Duration	Interest-rate sensitivity
Credit risk	Issuer may default
Reinvestment risk	Coupons reinvested at lower rates
Call risk	Bond redeemed when rates fall
Inflation risk	Fixed payments lose purchasing power

Bond Price/Yield Rules

If Interest Rates…	Existing Bond Prices…	Long Duration Bonds…
Rise	Fall	Fall more
Fall	Rise	Rise more

Premium and Discount Bond Logic

Bond Status	Coupon vs Market Rate	Pull to Par
Premium	Coupon above current market yield	Price tends to decline toward par as maturity approaches
Discount	Coupon below current market yield	Price tends to rise toward par as maturity approaches
Par	Coupon near market yield	Price near face value

Municipal Bonds

Type	Backed By	Key Risk
General obligation bond	Taxing power of issuer	Tax base and fiscal condition
Revenue bond	Project or revenue stream	Project revenues and feasibility
Industrial development revenue bond	Corporate user payments	Corporate credit risk may dominate

Municipal bond interest may receive favorable tax treatment, but suitability still depends on the client’s tax bracket, credit risk, maturity, and liquidity needs.

Mutual Funds

Feature	Review
Pricing	Forward-priced at NAV after order received
Redeemability	Redeemed with fund
Diversification	Depends on fund strategy
Loads and fees	Sales charges and operating expenses matter
Breakpoints	Larger purchases may reduce sales charge
Tax	Distributions may be taxable even if reinvested

ETFs

Feature	Review
Trading	Intraday on exchanges
Pricing	Market price can vary from NAV
Costs	Brokerage costs/spreads plus expense ratio
Tax efficiency	Often relatively tax efficient, not tax free
Trap	ETF liquidity depends on underlying holdings and market conditions

Closed-End Funds

Feature	Review
Shares	Fixed pool after offering
Trading	Exchange-traded
Pricing	Can trade at premium or discount to NAV
Liquidity	Investor sells in secondary market
Trap	Not redeemed at NAV like open-end mutual funds

UITs

Feature	Review
Portfolio	Generally fixed
Management	Little active management
Term	Often has termination date
Use	Bond ladders or defined portfolios
Trap	Not the same as an actively managed mutual fund

REITs

REIT Concept	Review
Equity REIT	Owns properties; income from rents and appreciation
Mortgage REIT	Owns mortgages or mortgage-backed assets
Public traded REIT	Exchange liquidity but market volatility
Nontraded REIT	Illiquidity and valuation issues
Suitability	Income objective may fit, but concentration and liquidity matter

Variable Annuities

Variable annuities are securities because investment performance depends on separate account investments.

Feature	Review
Tax deferral	Earnings grow tax deferred
Investment risk	Contract owner bears separate account risk
Expenses	Mortality, expense, administrative, fund expenses, riders
Surrender charges	Liquidity issue
Suitability	Long-term tax-deferred goal, not short-term liquidity
Trap	Tax-deferred product inside a tax-deferred account needs a strong non-tax reason

Fixed Annuities

Fixed annuities generally emphasize insurer guarantees rather than securities market performance. For Series 66, read carefully: variable products trigger securities analysis more directly.

Options

Position	Market View	Right / Obligation
Long call	Bullish	Right to buy
Short call	Neutral to bearish	Obligation to sell if exercised
Long put	Bearish or protective	Right to sell
Short put	Neutral to bullish	Obligation to buy if exercised

Options Strategy Recognition

Strategy	Purpose	Main Trap
Covered call	Income on owned stock	Upside capped
Protective put	Downside protection	Premium cost reduces return
Long straddle	Profit from volatility	Needs big move to overcome premiums
Spreads	Limit risk/reward	Must identify max gain/loss directionally
Naked option writing	Premium income	High risk; suitability issue

Portfolio Theory and Risk Measures

Risk Types

Risk	Meaning	Example
Systematic risk	Market-wide risk	Recession, interest rates
Unsystematic risk	Company/industry-specific risk	Product failure, strike
Interest-rate risk	Bond prices fall when rates rise	Long-term bonds
Credit risk	Issuer default or downgrade	Lower-rated bonds
Liquidity risk	Cannot sell quickly at fair price	Thinly traded securities
Inflation risk	Purchasing power erosion	Long-term fixed income
Reinvestment risk	Reinvest at lower rates	Callable bonds after rate decline
Currency risk	Exchange-rate movement	Foreign securities
Political risk	Government instability/action	Emerging markets
Concentration risk	Too much in one issuer/sector	Employer stock

Notes and examples

Diversification and Correlation

Correlation	Meaning	Diversification Benefit
+1.00	Move together perfectly	Low
0	No consistent relationship	Moderate
-1.00	Move exactly opposite	Highest theoretical benefit

Exam trap: diversification can reduce unsystematic risk, but it does not eliminate systematic market risk.

Key Performance Measures

Measure	What It Shows	Higher Usually Means
Standard deviation	Total volatility	More volatility
Beta	Market sensitivity	More systematic risk
Alpha	Return above/below expected return	Better risk-adjusted manager performance
Sharpe ratio	Excess return per unit of total risk	Better total risk-adjusted return
Treynor ratio	Excess return per unit of beta risk	Better systematic risk-adjusted return
R-squared	Relationship to benchmark	Benchmark explains more of returns

Formulas to Know

Use formulas when a question gives numbers. Otherwise, the exam often tests interpretation.

Current Yield

\[ \text{Current Yield} = \frac{\text{Annual Income}}{\text{Current Market Price}} \]

Tax-Equivalent Yield

\[ \text{Tax-Equivalent Yield} = \frac{\text{Tax-Free Yield}}{1 - \text{Marginal Tax Rate}} \]

After-Tax Yield

\[ \text{After-Tax Yield} = \text{Taxable Yield} \times (1 - \text{Marginal Tax Rate}) \]

Real Return Approximation

\[ \text{Approximate Real Return} = \text{Nominal Return} - \text{Inflation Rate} \]

CAPM Expected Return

\[ \text{Expected Return} = \text{Risk-Free Rate} + \beta(\text{Market Return} - \text{Risk-Free Rate}) \]

Economic Concepts

Business Cycle

Phase	Typical Features	Product/Strategy Implications
Expansion	Rising output, employment, confidence	Equities may benefit
Peak	Capacity pressure, inflation concerns	Risk of tightening
Contraction	Falling output, weaker earnings	Defensive assets may appeal
Trough	Low activity, early recovery signs	Cyclical opportunities may emerge

Notes and examples

Monetary and Fiscal Policy

Policy Tool	Actor	Effect
Monetary policy	Central bank	Influences money supply and interest rates
Fiscal policy	Government	Uses spending and taxation
Tight money	Central bank	Often raises rates, slows borrowing
Easy money	Central bank	Often lowers rates, encourages borrowing
Deficit spending	Government	Can stimulate demand but may affect rates/inflation

Yield Curve

Curve Shape	Common Interpretation
Normal upward slope	Higher yields for longer maturities; growth/inflation expectations
Flat	Uncertainty or transition
Inverted	Short rates above long rates; recession concern
Steep	Growth and/or inflation expectations may be rising

Fundamental Analysis

Financial Statements

Statement	Shows	Exam Clue
Balance sheet	Assets, liabilities, equity at a point in time	Financial position
Income statement	Revenue, expenses, profit over a period	Profitability
Cash flow statement	Operating, investing, financing cash flows	Quality of earnings and liquidity
Statement of retained earnings	Changes in retained earnings	Dividend and reinvestment policy

Notes and examples

Common Ratios

Ratio	Interpretation
Current ratio	Short-term liquidity
Quick ratio	More conservative liquidity
Debt-to-equity	Leverage
Gross margin	Production profitability
Operating margin	Operating efficiency
Net profit margin	Overall profitability
P/E ratio	Market price relative to earnings
Dividend payout ratio	Earnings paid as dividends
Dividend yield	Dividend income relative to price
Inventory turnover	Inventory efficiency

Valuation Traps

High P/E can mean growth expectations or overvaluation.
Low P/E can mean value opportunity or deteriorating business.
Book value is accounting-based, not necessarily liquidation value.
Dividend yield rises when price falls; high yield can signal distress.
EPS growth without cash flow support may be lower quality.

Technical Analysis

Series 66 candidates should recognize technical analysis but not confuse it with fundamental analysis.

Technical Concept	Meaning
Support	Price level where buying has historically emerged
Resistance	Price level where selling has historically emerged
Moving average	Smooths price trend
Relative strength	Compares performance to market or peers
Volume	Confirms or questions price movement
Head and shoulders	Reversal pattern concept

Trap: technical analysis focuses on market data and price behavior, not issuer financial statement value.

Account Types and Ownership

Account	Key Feature	Exam Trap
Individual	One owner controls account	Death/estate handling differs from joint
Joint tenants with rights of survivorship	Survivor receives ownership	Not the same as tenancy in common
Tenants in common	Decedent’s share passes through estate	No automatic full survivorship
TOD / transfer on death	Beneficiary receives assets at death	Does not give beneficiary lifetime trading authority
Trust account	Trustee controls for beneficiaries	Must follow trust document
Custodial account	Custodian acts for minor	Assets belong to minor
Corporate account	Entity authorization required	Need corporate resolutions/authority
Partnership account	Partnership agreement matters	Authority must be verified
Discretionary account	Adviser/rep can make specified decisions	Requires proper written authority

Unethical Communications and Advertising

Red-Flag Words

Be skeptical of answer choices using:

Guaranteed
Risk-free
Approved by regulator
Insider opportunity
No downside
Certain profit
Secret strategy
Tax-free for everyone
Suitable for all investors
Limited risk when risk is not actually limited

Performance Advertising Traps

Claim	Problem
“Past performance guarantees future results”	Misleading
Cherry-picked profitable accounts	Misleading sample
Gross returns without fee context	May mislead
Hypothetical results without assumptions/limitations	Misleading
Testimonials without required disclosures	Conflict and compensation concerns
Backtested strategy shown as real performance	Misrepresentation risk

Books, Records, and Supervision

Records Commonly Tested

Record Type	Why It Matters
Customer account information	Suitability and supervision
Orders and trade confirmations	Transaction evidence
Written communications	Advertising and correspondence review
Complaints	Supervisory and regulatory issue
Financial records	Solvency and net capital concepts
Advisory contracts	Fee, discretion, assignment, and disclosure terms
Personal securities transactions	Conflicts and insider trading monitoring
Policies and procedures	Supervision and compliance

Supervision Principles

Firms must supervise associated persons.
Written procedures matter.
Branch offices and remote activities can create supervision issues.
Customer complaints cannot be ignored.
A supervisor may be liable for failing to supervise when red flags are missed.
“I did not know” is weak if proper supervision would have detected the issue.

Client Strategy Scenarios

Growth Investor

Likely appropriate:

Diversified equities
Equity mutual funds or ETFs
Long-term allocation strategy
Dollar-cost averaging when suitable
Rebalancing plan

Watch for:

Time horizon
Risk tolerance vs risk capacity
Concentration in one stock or sector
Taxable gains from frequent switching

Income Investor

Bonds
Bond funds
Dividend-paying stocks
Preferred stock
Income-oriented balanced funds
Credit quality
Interest-rate risk
Inflation risk
Tax bracket
Liquidity needs

Capital Preservation Investor

Cash equivalents
Money market funds
Treasury securities
Short-term high-quality fixed income
Inflation risk
Overreaching for yield
Illiquid products
Long-duration bonds

Speculative Investor

Possible products:

Options
Small-cap or emerging-market exposure
Sector funds
Limited partnerships
High-yield bonds
Net worth and income
Experience
Loss capacity
Documentation
Whether speculation conflicts with stated objective

Mini Drill: Best Answer Patterns

If the Question Says “Most Appropriate”

Look for the answer that best matches:

Objective
Risk tolerance
Time horizon
Liquidity
Tax status
Experience
Cost
Conflicts

If the Question Says “Prohibited”

Favor answers involving:

Fraud
Guarantees
Unauthorized activity
Undisclosed conflicts
Misleading advertising
Improper custody
Unregistered activity
Selling unregistered nonexempt securities

If the Question Says “Exempt”

Ask:

Is it the security that is exempt?
Is it the transaction that is exempt?
Is it federal covered?
Does antifraud still apply? Yes.

If the Question Says “Administrator”

Is the Administrator acting within state authority?
Is federal preemption limiting the action?
Is due process required?
Is the issue registration, investigation, records, or fraud?

Last-Day Review Checklist

Law and Registration

Security vs nonsecurity
Broker-dealer vs agent
Investment adviser vs IAR
Federal covered adviser vs state adviser
Federal covered security vs exempt security
Exempt transaction vs exempt security
Administrator powers and limits
Registration methods: filing, coordination, qualification
Stop orders, denial, suspension, revocation
Antifraud applies broadly

Notes and examples

Ethics

Fiduciary duty
Disclosure of conflicts
Custody safeguards
Discretionary authority
Advisory contract assignment
Misleading advertising
Churning and unauthorized trading
Selling away and outside business activity
Insider trading concepts
Customer complaints and supervision

Products and Recommendations

Stocks, bonds, preferred stock
Mutual funds, ETFs, closed-end funds, UITs
Municipal bonds
Options basics
Variable annuities
REITs and alternatives
Retirement accounts
Taxable vs tax-exempt yield
Risk measures
Portfolio construction and diversification

Put the review into practice

Finance Prep

Start Series 66 \u2014 Uniform Combined State Law Examination on Web

Use the web app to preview question style, then practise the topics you need to revisit.

Original Finance Prep practice, independent from NASAA: not official NASAA questions, copied live-exam content, or exam dumps.

Current alignment Aligned to the relevant syllabus, exam elements, competency areas, and topic weights where they are available.

Practice modes Use topic drills, timed mocks, scenario questions, and focused review before deeper mixed practice.

Teaching explanations Explanations show the client, product, compliance, or calculation rule that makes the best answer defensible.

Stable bank Questions are prebuilt and reviewed before publication, so practice is stable and inspectable, not improvised during a quiz.

Study Plan

Series 66 — Uniform Combined State Law Examination Cheat Sheet

High-Yield Map

Persons, Registration, and Jurisdiction

Core State Law Definitions

Three-Part Investment Adviser Test

Broker-Dealer vs Investment Adviser Capacity

Registration Decision Table

Federal vs State Adviser Registration

Jurisdiction: When a State Can Act

“Sale” and “Offer” Traps

Investment Adviser Status: Three-Part Test

Compensation Is Broad

Common IA Exclusions Tested

Securities Registration and Exemptions

Three Registration Concepts

Federal Covered Securities

Exempt Securities vs Exempt Transactions

Common Exempt Securities

Common Exempt Transactions

Exempt Securities: Quick Recognition

Exempt Transactions: Quick Recognition

Exemption Trap

Federal Covered Securities and Notice Filing

State Role May Still Include

Common Federal Covered Security Patterns

Federal Covered Advisers

Key Exam Points

Administrator Powers and Process

Administrator Authority

Registration Procedure Traps

Enforcement and Liability

State Administrator Powers

What the Administrator Can Generally Do

What the Administrator Cannot Do

Common Liability Patterns

Rescission Concept

Investment Adviser and Broker-Dealer Conduct

Fiduciary vs Transactional Standards

Adviser Fiduciary Duties

Advisory Contracts

Brochure and Disclosure

Custody, Discretion, and Authority

Fees, Compensation, and Conflicts

Core Definitions

Broker-Dealer vs Investment Adviser Decision Rule

Agent vs IAR

Advisory Contract Items to Recognize

Brochure / Form ADV Concepts

Custody

Discretion

Client Authorization

Unethical and Prohibited Practices

Product and Account Selection

Security or Not?

Equity Products

Fixed Income Products

Bond Yield Relationships

Investment Companies and Pooled Products

Mutual Fund Share Classes

Annuities and Insurance

Options Cheat Sheet

Portfolio, Risk, and Economics

Risk Types

Modern Portfolio Theory Terms

Economic Indicators and Policy

Client Profile, Suitability, and Planning

Know-Your-Client Data

Suitability Decision Rules

Account Ownership and Estate Concepts

Retirement and Education Accounts

Tax Cheat Sheet

Investment Tax Treatment

Tax-Equivalent Yield

Tax Treatment Quick Table

Retirement Account Concepts

Formula Sheet

Return and Valuation

Risk-Adjusted Performance

Bond and Fund Math

Financial Statement Ratios