What is the difference between Series 65 and PFS exam?

The Series 65 exam and the (Personal Finance Specialist) PFS exam are two challenging exams required to receive the specialized designation in the personal finance and investment advising space. While both tests cover different certifications and are in various fields of finance, alot of similarities exist between the two designations, with plenty of overlap in the study material needed to pass both exams.

Designed by the North American Securities Administrators Association (NASAA) and administered by the Financial Industry Regulatory Authority (FINRA), the Series 65 exam is a certification required for investment advisers and other financial professionals providing investment advising services to clients. This Series 65 exam covers influential information investment advisers should know when working in the industry. These include economics, ethics, financial regulations, laws, analysis, and investment vehicles and strategies. This guided information is essential for all financial advisors and investment advising professionals to understand.

At its most basic level, the Series 65 exam was created to test financial professionals on their ability to advise clients with specialized investment strategies as well as their personal financial investment knowledge. With this financial designation, individuals can develop investment plans and strategies for fiduciary clients as well as understand a client’s overall financial portfolio and situation to formulate a plan of action around it. This helps Series 65 holders and investment advisers gain additional, industry-specialized, applied knowledge to assist them in their overall goal of improving a client’s portfolio or financial position for retirement.

On the other hand, a Personal Financial Specialist (PFS) is a specialized designation allowing certified public accountants (CPAs) to gain the knowledge, understanding, and ability to expand their knowledge, expertise, and service offerings in the wealth management and financial planning space. Only accountants who are certified with a CPA are eligible to sit for the PFS exam and receive a PFS certification. PFS holders and certified public accountants can enjoy numerous expanded employment opportunities from obtaining a PFS certification. These opportunities include various facets of the personal finance industry, such as employment within wealth management firms, financial corporations, consulting firms, and other financial advisory service firms. The PFS certification also allows an individual to start their own financial planning or wealth management practice with the credibility and backing of a PFS designation.

Series 65 exam Overview

To succeed on the Series 65 exam, it is essential to understand all test-taking components and strategies. With the completion of the Series 65 exam, individuals are qualified to charge fiduciary fees for securities and investment advice and sell full-fledged advisory services. This also includes the ability to advise clients as investment adviser representatives (IARs) in their home state in which they took the exam.

In order to become an IAR, one must pass the Series 65 exam, or formally known as the Uniform Investment Advisor Law Exam. With no other prerequisites required for the position, candidates are not required to be sponsored by a FINRA member investment firm and can sit for the exam individually. However, it is essential to note that a U10 form for non-firm registered test takers or a U4 form for brokers and other firm-registered professionals is required to be filled out alongside the exam fee of $187.

In total, the Series 65 exam contains 130 questions covering various topics deemed essential for an investment adviser representative to understand and know to adequately address and assist their clients in all financial and investment matters. The four financial and investment topics include economic factors and business information (15%, 20 questions), investment vehicle characteristics (25%, 32 questions), client investment recommendations and strategies (30%, 39 questions), and laws, regulations, and guidelines, including prohibition on unethical business practices (30%, 39 questions). Candidates are given around 180 minutes to complete the exam, with only 94 of 130 total questions required and needed to pass the exam. This means a score of 72.3% is the minimum necessary to pass the exam. The test is offered at qualified, state-registered testing centers, and exam test-takers are given a basic four-function electronic calculator with no graphing capabilities. Markers and dry-erase boards are provided to test-taking candidates; however, reference material of any kind is prohibited from the exam room, with severe cheating penalties administered to those attempting to cheat on the exam.

Individuals have 120 days to take the exam, once registered, before needing to re-register. If a candidate fails the exam during the administered exam window, they are allowed to retake the exam after a 30-day waiting period. However, after failing the exam three times, the candidate is required to wait another 180 days before re-registering for the exam. No limit is enforced on the number of exams a candidate can take in their lifetime.

Personal Financial Specialist (PFS) Exam Overview

The PFS exam is an exam administered by The American Institute of Certified Public Accountants (AICPA). This exam is multiple-choice and covers all areas of the financial planning process. This includes essential professional responsibilities and disciplines of personal financial planning, estate planning, investments, tax planning, retirement, and insurance planning, as well as specific specializations of personal finance such as employee benefits, financial education, and elder planning. This exam can be taken online via a laptop with a proctored program and webcam, or the exam can be administered at a local state-sponsored testing center.

No outside study material, reference material, or exam material is allowed to be brought into the testing center or removed from the testing site. The exam lasts a total of five hours, with a 30-minute break provided in between sections. A reference sheet of appropriate tax rates and limits will be provided for all test-taking candidates to use during the exam. An approved financial calculator is also required for the exam with models such as Hewlett Packard 12C 10B, 10B II+, 17B II+; Texas Instruments TI BAII Plus, TI BAII Plus Professional; Victor V12, and Victor 10 permitted for the exam.

With a total of 160 questions per exam module, half of the test is split into stand-alone multiple-choice questions, while the other half of the exam is made up of short and extended case studies with accompanying multiple-choice questions. Case studies vary in length, with brief case studies containing 2 – 5 multiple-choice questions and more extended comprehensive case studies containing upwards of 12 – 18 related multiple-choice questions. The multiple choice questions are meant to test an individual’s general personal financial planning knowledge on all related topics, while case studies are intended to test a candidate’s analytical reasoning skills and ability to apply financial planning methodology and theories to real-world mock advice scenarios in a comprehensive manner.

FAQs

How can I get PFS?

For individuals to be eligible to receive a PFS designation, they must be registered members within the AICPA organization and have a registered CPA license issued by a legal and qualified state authority. Candidates need to have at least two years of full-time teaching related to personal finance or business experience, equivalent to 3000 hours in personal financial planning, within five years of the application.

What's the difference between PFS and CFP?

The PFS is the abbreviation used for a Personal Financial Specialist and is a unique certification designated for tax planners, retirement planners, and personal financial planners. In contrast, the CFP is the abbreviation used for a certified financial planner. A CFP license allows an individual to offer investment planning and financial planning advice to fiduciary clients.

Is a Personal Financial Specialist a fiduciary?

All registered investment advisors (RIAs), including other personal financial specialists, are required by a legal and qualified state authority to provide the fiduciary standard of care for their clients. This includes Certified Financial Planners (CFPs) who are also automatically held to a fiduciary standard.

What does a PFS designation cover?

The PFS designation covers financial planning at higher levels than that of other certifications in Financial Services like a CPA. This makes PFS advisers more qualified to offer clients sophisticated and comprehensive planning to financial management services which can help to ensure a higher level of service and grade of advice.

Is there a lot of math on the Series 65 exam?

Candidates often report having to use a calculator between 5 to 8 times on their exam. The financial math was reported not to be complicated, with candidates finding the biggest challenge was remembering numbers and formulas to use in the calculations.

What does a Series 65 allow me to do?

The Series 65 license does not grant the right for individuals to sell securities or investments. A Series 6 or Series 7 FINRA license is required to market and sell securities. On its most basic level, a Series 65 does allow financial professionals to give clients registered fiduciary advice and investment analysis. Candidates who have received their Series 65 license are licensed and qualified to provide their services as Investment Advisor Representatives (IAR) and are also financial fiduciaries in most states.

How do you pass Series 65 on the first try?

To do well and pass on the Series 65 exam, candidates must achieve a minimum score of 72.3%. This means answering 94 of 130 multiple-choice questions correctly within the 180-minute time frame. Series 65 exam prep courses found online can help make this possible for a candidate.