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Series 65 Investment Adviser Registration Practice Questions

Official outline
NASAA Series 65 Test Specifications (June 2023)
Questions on this page
8
Updated
Nov 3, 2026

  1. Question 1, easy

    Meridian Advisory has its only office in State A, manages $72 million in client assets, and has 40 retail clients, all residing in State A. With which regulator must Meridian register as an investment adviser?

    • A.The SEC, because its AUM exceeds the $50 million federal threshold and SEC registration pre-empts state registration
    • B.State A's securities Administrator, because its AUM is below the $100 million federal threshold and it maintains a place of business there
    • C.Both the SEC and State A concurrently, because an adviser with a place of business in a state must register at both levels, with the SEC reviewing filings first
    • D.No registration is required, because all of its clients reside in State A and the adviser has no clients in other states
    Show answer and explanationHide answer

    Correct answer: B. State A's securities Administrator, because its AUM is below the $100 million federal threshold and it maintains a place of business there

    Advisers with AUM under $100 million (absent an SEC-mandated exception) register at the state level where they maintain a place of business. Meridian is well under $100M, so State A registration governs; SEC registration only becomes mandatory generally at $100M+ (with a buffer to $110M). Choice A wrongly imports a $50M number that isn't a real registration threshold; C ignores that dual registration isn't how the demarcation works; D ignores that having clients and a place of business in-state triggers registration.

    • A. The federal registration threshold is generally around $100 million, not $50 million, so this AUM does not trigger SEC registration.
    • B. With AUM below the roughly $100 million federal threshold and a place of business in State A, Meridian is a state-regulated adviser and registers with State A's Administrator.
    • C. Concurrent SEC and state registration, with the SEC reviewing first, isn't required for an adviser below the federal AUM threshold; it registers with the state alone.
    • D. Having all clients in-state does not exempt an adviser with a place of business there from state registration.

  2. Question 2, medium

    A growing advisory firm approaches the state-to-SEC registration transition range. What compliance decision is required?

    • A.Choose either regulator at will based on fee levels, since eligibility is not tied to assets
    • B.Apply the relevant eligibility thresholds, buffer rules and exceptions rather than assuming one universal switch point
    • C.Decide by headcount, since the number of employees drives the transition to federal registration
    • D.Delay the assets calculation until the firm changes its name or ownership, when eligibility is reassessed
    Show answer and explanationHide answer

    Correct answer: B. Apply the relevant eligibility thresholds, buffer rules and exceptions rather than assuming one universal switch point

    Eligibility turns on regulatory assets under management measured against the statutory thresholds, including the buffer range and applicable exemptions. There is no single switch point to assume.

    • A. Registration authority depends on regulatory assets under management, not on a free choice or fees.
    • B. The firm must apply the thresholds, buffer rules and exceptions to its regulatory assets under management.
    • C. Employee count does not determine state versus SEC registration.
    • D. Assets under management are evaluated on the required annual basis, not when the firm changes its name or ownership.

  3. Question 3, medium

    Absent an order of denial, suspension, or postponement by the Administrator, when does a securities registration filed under the Uniform Securities Act generally become effective?

    • A.Immediately upon filing
    • B.Noon of the 30th day after filing
    • C.Noon of the 45th day after filing
    • D.Noon of the 60th day after filing
    Show answer and explanationHide answer

    Correct answer: C. Noon of the 45th day after filing

    Under Section 303 of the Uniform Securities Act, absent a denial, suspension, or postponement order, a registration becomes effective at noon of the 45th day after a complete application is filed with the Administrator. This default effective date applies to broker-dealers, agents, investment advisers, and IARs alike.

    • A. Registration is not effective immediately upon filing; it becomes effective only after the statutory waiting period runs (absent a stop order).
    • B. 30 days is not the standard effective period under the Uniform Securities Act's registration provisions.
    • C. Under the Uniform Securities Act, absent a denial, suspension, or postponement order, registration generally becomes effective at noon of the 45th day after filing. The correct answer.
    • D. 60 days overstates the standard waiting period specified under the Act.

  4. Question 4, medium

    A brokerage representative gives occasional asset-allocation comments as part of executing securities transactions, but the brokerage firm starts charging a separate ongoing advisory fee for individualized portfolio recommendations. What is the key issue?

    • A.Advice given by a registered broker-dealer is excluded from investment-adviser law as long as the firm is registered as a broker-dealer, even when it charges a separate advisory fee.
    • B.A securities firm that charges a separate advisory fee must first surrender its broker-dealer registration and cannot continue executing client trades.
    • C.Advice delivered by email is outside investment-adviser regulation because the rules apply to in-person advice rather than electronic communications.
    • D.Special compensation and advisory business can remove the broker-dealer's solely-incidental exclusion, requiring investment-adviser analysis.
    Show answer and explanationHide answer

    Correct answer: D. Special compensation and advisory business can remove the broker-dealer's solely-incidental exclusion, requiring investment-adviser analysis.

    The broker-dealer exclusion applies only when advice is solely incidental to brokerage and no special compensation is received for it. A separate ongoing advisory fee can take the firm outside the exclusion.

    • A. The exclusion is conditional, and special compensation for advice can defeat it regardless of registration status.
    • B. A firm can be dually registered and offer both brokerage and advisory services; it need not give up its broker-dealer registration.
    • C. Advice is regulated by its content and compensation, not the delivery medium.
    • D. Correct: special compensation and a distinct advisory business remove the incidental-advice exclusion.

  5. Question 5, hard

    An investment adviser has $120 million in regulatory assets under management and no exclusion applies. Under the Investment Advisers Act's registration framework, this adviser is:

    • A.Required to register with the SEC and generally prohibited from registering with the states
    • B.Required to register with the states in which it has clients, with no SEC registration needed at this level of assets
    • C.Permitted to freely choose either SEC or state registration
    • D.Exempt from registration because it manages individual accounts rather than pooled vehicles
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    Correct answer: A. Required to register with the SEC and generally prohibited from registering with the states

    Advisers with regulatory assets under management at or above the $100 million federal registration threshold (generally required to register with the SEC once above roughly $110 million, with a buffer zone in between) become SEC-registered 'federal covered advisers.' Under the National Securities Markets Improvement Act (NSMIA), states are preempted from also requiring full registration of federal covered advisers, though states may still require notice filings and fees.

    • A. Correct. SEC registration is required, and state full registration is preempted by NSMIA for federal covered advisers.
    • B. Incorrect. At this AUM level the adviser registers with the SEC, not with individual states.
    • C. Incorrect. Registration is not a free choice once the SEC threshold is met.
    • D. Incorrect. There is no exemption for advisers that manage individual accounts at this AUM level.

  6. Question 6, easy

    While preparing a client's tax return, a CPA makes a passing recommendation about the tax efficiency of the client's investment portfolio as part of the engagement, charging no separate or additional fee for the advice. Must she register as an investment adviser under the Uniform Securities Act?

    • A.Yes, because any recommendation involving securities triggers registration
    • B.No, because the advice is solely incidental to her accounting practice and she receives no special compensation for it
    • C.Yes, unless she limits her advice to fewer than 6 clients per year
    • D.No, because accountants are always excluded from the definition of investment adviser regardless of the nature of their compensation
    Show answer and explanationHide answer

    Correct answer: B. No, because the advice is solely incidental to her accounting practice and she receives no special compensation for it

    The Uniform Securities Act excludes lawyers, accountants, teachers, and engineers ('LATE') from the definition of investment adviser when their investment-related advice is solely incidental to their professional practice and they receive no special or separate compensation for it. Here, the advice is incidental to the tax engagement and she is not separately compensated, so the exclusion applies. Choice D overstates the exclusion. It is conditional, not absolute; a LATE professional who charges a separate advisory fee or holds out as an adviser loses the exclusion.

    • A. This overstates the trigger. Under the Uniform Securities Act's exclusion for professionals like accountants, an incidental recommendation without special compensation does not by itself require IA registration.
    • B. Correct. Advice that is solely incidental to the CPA's accounting practice, given without any special or separate compensation for the investment advice itself, falls within the professional exclusion from the definition of investment adviser.
    • C. The exclusion doesn't hinge on a client-count cap like 6 clients per year; it turns on whether the advice is incidental to the primary professional service and uncompensated separately.
    • D. The exclusion for accountants is not unconditional. It applies specifically when the advice is incidental and uncompensated; if she received special compensation for investment advice, the exclusion would not apply regardless of her profession.

  7. Question 7, medium

    Within how many days after the end of its fiscal year must an investment adviser file an annual updating amendment to Form ADV?

    • A.30 days
    • B.45 days
    • C.60 days
    • D.90 days
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    Correct answer: D. 90 days

    SEC and NASAA rules require investment advisers to file an annual updating amendment to Form ADV within 90 days after the end of their fiscal year, updating financial and business information (with more prompt other-than-annual amendments required for certain material changes during the year).

    • A. Incorrect. Thirty days is not the annual updating deadline. A 30-day period appears in other registration contexts, such as updating an individual's Form U4, but the annual ADV amendment is due 90 days after fiscal year-end. Other ADV changes between annual updates are generally filed promptly.
    • B. Incorrect. Forty-five days is the period the SEC has to act on a new adviser registration application, not a deadline for the annual updating amendment. The annual amendment is due 90 days after fiscal year-end.
    • C. Incorrect. Sixty days is associated with a Form ADV-W withdrawal becoming effective after filing, not with the annual updating amendment. The annual amendment is due 90 days after fiscal year-end.
    • D. Correct. An adviser must file its annual updating amendment within 90 days after the end of its fiscal year, reflecting any material changes to Form ADV. Other changes between annual updates are generally filed promptly.

  8. Question 8, hard

    An investment adviser organized as an LLC converts to a corporation, with no material change in its advisory business, personnel, or clients. Under NASAA's Model Rules, what must the successor corporation do regarding its investment adviser registration?

    • A.The successor corporation must submit an entirely new Form ADV, re-qualify all supervised persons from scratch, and undergo the full initial-registration review process as if it were a brand-new adviser with no prior history, including a fresh background review of each control person
    • B.The successor corporation may file a Form ADV as a 'successor' filing, generally succeeding to the predecessor's registration status without needing to re-demonstrate that it meets registration standards, since there is no material change in the business
    • C.No filing is required, because a change in legal form of organization has no effect on registration so long as the adviser's name, principals, and clients remain the same
    • D.The predecessor's registration must be withdrawn and the successor must wait out a mandatory 6-month blackout period before it may register, during which it may not conduct advisory business
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    Correct answer: B. The successor corporation may file a Form ADV as a 'successor' filing, generally succeeding to the predecessor's registration status without needing to re-demonstrate that it meets registration standards, since there is no material change in the business

    NASAA's successor-registration approach lets an adviser that changes its legal form (for example, LLC to corporation) with no material change in its advisory operations file a Form ADV identifying itself as the successor. It then generally steps into the predecessor's registration status instead of starting over. A full initial-registration review of the business, its personnel and its control persons is not required. Some filing is still necessary, because registration does not carry over automatically with no paperwork. No mandatory waiting or blackout period applies to a successor continuing the same advisory business.

    • A. NASAA's successor-registration provisions avoid forcing a full initial-registration redo, including fresh reviews of supervised and control persons, when there's no material change in the business.
    • B. Under NASAA's Model Rules, a successor organization with no material change in the business, personnel, or clients may file a successor Form ADV and generally succeed to the predecessor's registration status without re-demonstrating eligibility.
    • C. A change in legal form does trigger a filing obligation (the successor filing); it is not a non-event requiring no paperwork.
    • D. There is no mandatory blackout period for a successor entity continuing the same advisory business.

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