Accredited Investor Status & the Series 65
For investors that don't meet traditional accreditation requirements, the Series 65 is the side door.🚪
Below is a sample question from the exam.
Could you pass the Series 65? (Answer at bottom of thread)
For investors that don't meet traditional accreditation requirements, the Series 65 is the side door.🚪
Below is a sample question from the exam.
Could you pass the Series 65? (Answer at bottom of thread)
First, let's define the traditional accredited investor.
Meeting one or all of the following gets you through the front door: ⬇️
- Income of $200,000 annually ($300,000 if married)
- Net worth of $1,000,000 or greater (excluding the value of your primary residence)
Meeting one or all of the following gets you through the front door: ⬇️
- Income of $200,000 annually ($300,000 if married)
- Net worth of $1,000,000 or greater (excluding the value of your primary residence)
This is all well and good but many investors don't meet these criteria. You might understand angel investing and have great deal flow, but legally you're unable to invest in startups.
In August 2020, the SEC updated the accredited investor regulations and added a few side doors. The most notable and accessible of these doors is the Series 65.
https://twitter.com/andrew__rea/status/1392259977608314880
The Series 65 is an exam & securities license taken by Registered Investment Advisors (RIAs).
These are the people that give broad portfolio management advice at companies like Edward Jones, Charles Schwab, most large banks, and thousands of local practices.
These are the people that give broad portfolio management advice at companies like Edward Jones, Charles Schwab, most large banks, and thousands of local practices.
To achieve accreditation, you'll need to pass the exam and ensure you're in "good standing" in your state.
For the Series 65, that means being registered in your state. Each state has different regulations and fees governing this. Most average between $125-300.
For the Series 65, that means being registered in your state. Each state has different regulations and fees governing this. Most average between $125-300.
I'd check with your state's specific securities regulator and/or legal counsel to ensure compliance. The paperwork is more complex for some states than others.
I'll do a separate miny-thread on this for non-US-based investors later.
nasaa.org/contact-your-r…
I'll do a separate miny-thread on this for non-US-based investors later.
nasaa.org/contact-your-r…
Once you've established "good standing" with your state, you can set up accredited investor authentication for free on Accredited.Am by North Capital.
accredited.am
accredited.am
Back to the exam.
The Series 65 costs $175-187 in fees and can be taken IRL at a local testing center or virtually through an online test-proctor.
The Series 65 costs $175-187 in fees and can be taken IRL at a local testing center or virtually through an online test-proctor.
The exam is comprised of 130 multiple-choice questions. You get 3 hours to complete them. To pass, you need a 72% or 94/130 questions. ✅
Hitting 72%+ comes down to a combination of two things.
1. Studying
2. Smart Test-taking.
1. Studying
2. Smart Test-taking.
1. Studying
It's widely recommended that you study for 60 hours to pass the test. If you have a background in finance or law, you can probably cut that by at least 50%. I studied for about 10 hours. 📑
It's widely recommended that you study for 60 hours to pass the test. If you have a background in finance or law, you can probably cut that by at least 50%. I studied for about 10 hours. 📑
Your options for Series 65 studying are as follows:
- Buy a textbook 📔
- Buy a study guide 👨🦯
- Google tons of sh*t 👩💻
- Wing it 🕊
- Combination of all the above
- Buy a textbook 📔
- Buy a study guide 👨🦯
- Google tons of sh*t 👩💻
- Wing it 🕊
- Combination of all the above
My recommendation:
Skip the textbook and buy a study guide instead. Make sure the guide includes practice questions. Google anything that doesn't make sense in the study guide.
I used the Test Geek Study Guide ($99). 👇
testgeekexamprep.teachable.com
Skip the textbook and buy a study guide instead. Make sure the guide includes practice questions. Google anything that doesn't make sense in the study guide.
I used the Test Geek Study Guide ($99). 👇
testgeekexamprep.teachable.com
Investopedia is going to be your best friend for any information that doesn't make sense in the study guide.
investopedia.com
investopedia.com
2. Test-taking
Here's a breakdown of the test questions.👇
- Economic Factors = 20 Qs (15%)
- Investment Vehicles = 32 Qs (24%)
- Client & Investment Strategies = 39 Qs (30%)
- Risk = 39 Qs (30%)
Let's do some practice questions. (answers bottom of thread)
Here's a breakdown of the test questions.👇
- Economic Factors = 20 Qs (15%)
- Investment Vehicles = 32 Qs (24%)
- Client & Investment Strategies = 39 Qs (30%)
- Risk = 39 Qs (30%)
Let's do some practice questions. (answers bottom of thread)
Economic Factors Practice Question 📝
Investment Vehicles Practice Question 📝
Client & Investment Strategies Practice Question 📝
Risk Practice Question 📝
Think you crushed the questions? I hope so. The answers are at the bottom of this thread.
Tip:
Series 65 questions often give you info in the choices that you've never seen while studying. Stick with what you know, don't overthink.
Series 65 questions often give you info in the choices that you've never seen while studying. Stick with what you know, don't overthink.
For example, in the following question, you would likely not have read anything about NASDAQ subscribers in your study materials. Don't let those tricks derail you. (The answer is C)
If you take enough practice tests, these questions get easier and easier.
If you take enough practice tests, these questions get easier and easier.
Exam Summary:
To pass the Series 65, prep with a study guide and google searches. Then, take multiple practice tests so you don't get tripped up on exam day.
To pass the Series 65, prep with a study guide and google searches. Then, take multiple practice tests so you don't get tripped up on exam day.
💥 If all went well, you've passed the exam and are on your way to accredited investor status. If not, you can retake the test in 30 days. There's no limit on how many times you can re-take it.
Assuming you have the access and knowledge, becoming an accredited investor to angel invest is empowering.
That said, it isn't for everyone. The thread below by @julianweisser is a great primer on the trade-offs.
That said, it isn't for everyone. The thread below by @julianweisser is a great primer on the trade-offs.
https://twitter.com/julianweisser/status/1377002668011315206
For tactics, strategies, and anecdotes on getting started as a tiny-check angel investor, this thread by @dunkhippo33 is one of my all-time favorites.
https://twitter.com/dunkhippo33/status/1351270052801048577
If you found this thread helpful, please like & retweet. If you have questions about this exam, my DM's are open.
Appendix: Answers to the Practice Questions 👇
Thread Opener = C. In hedge strategies, the option always follows the risk direction of the stock, to generate a profit (income), you would then sell the option
Thread Opener = C. In hedge strategies, the option always follows the risk direction of the stock, to generate a profit (income), you would then sell the option
Economic Factors Practice Question = B (If we knew information known to insiders it would be strong)
Investment Vehicles Practice Question = B (Loans taken from an insurance policy reduce the death benefit unless paid back)
Client & Investment Strategies Practice Question = D (The time horizon for retirement is life expectancy)
Risk Practice Question = C (An agent must be registered in the state in which they have an office and any state in which their clients are residents. It is not the obligation of the agent to know where their clients may forward their mail)
Get a question or two wrong?
On Deck Investing (ODI) can help with that. Check out the thread and video below by ODI Program Director @TomJWhiteIV for more on how.
On Deck Investing (ODI) can help with that. Check out the thread and video below by ODI Program Director @TomJWhiteIV for more on how.
https://twitter.com/TomJWhiteIV/status/1392852745183449090
Are you an active angel investor looking to take your craft to the next level?
On Deck Angels will surround you with differentiated early-stage deal flow, a community of world-class operator angels, and programming to get you to the next level.
beondeck.com/angels
On Deck Angels will surround you with differentiated early-stage deal flow, a community of world-class operator angels, and programming to get you to the next level.
beondeck.com/angels
Also, to clarify, the questions I shared are just practice questions, NOT ACTUAL LIVE TEST QUESTIONS.
Just wanted to make sure that's clear. Sharing live test questions would not be appropriate 🙂
Just wanted to make sure that's clear. Sharing live test questions would not be appropriate 🙂
My notes from studying for the Series 65 are below. ⬇️
https://twitter.com/andrew__rea/status/1393611068946145284
• • •
Missing some Tweet in this thread? You can try to
force a refresh
