NASAA Series 66 content outline

The four scored sections

NASAA's Series 66 study guide sets the scored blueprint at 100 questions divided among four subject areas. This is an actual specification, not an estimate. A separate 10 questions are included for pretesting and can be drawn from any one or more of the same areas. The candidate cannot identify them, so every item matters during the test.

The percentages use only the 100 scored items as their denominator. Do not add the 10 pretest questions to a topic count or conclude that the law area will always have 49.5 questions. The pretest items can come from any one or more content areas, and they do not count toward the final result.

1. Economic Factors and Business Information: 8 questions

This section centers on analytical methods. Topics include time value of money, present and future value, internal rate of return and net present value; descriptive statistics such as mean, median, range, and standard deviation; portfolio measures such as alpha, beta, Sharpe ratio, and correlation; financial ratios such as current and quick ratio and debt-to-equity; and valuation ratios such as price-to-earnings and price-to-book.

Understand both the calculation and its interpretation. A current ratio compares current assets with current liabilities. A high ratio may suggest short-term coverage, but it does not by itself prove that assets are liquid or that a company is financially strong. Debt-to-equity compares financing sources. Price-to-earnings compares market price with earnings per share, but the ratio is only meaningful in context, including growth expectations and industry.

Example: an investor compares two portfolios. Portfolio A returns 8% with a standard deviation of 10%; Portfolio B returns 10% with a standard deviation of 20%. B has the higher raw return, but comparing risk-adjusted results requires the risk-free rate and an appropriate measure such as Sharpe ratio. Without that information, a candidate should not claim B delivered better risk-adjusted performance. Standard deviation is not the same thing as beta, and neither statistic guarantees what future results will be.

For NPV, discount each future cash flow to present value using the required rate, then subtract the current investment. A project requiring $5,000 now and paying $2,700 in each of the next two years has present value of approximately $2,571 + $2,449 at a 5% discount rate, or about $5,020. NPV is roughly positive $20 under these assumptions. A positive NPV indicates the modeled return exceeds the discount-rate hurdle slightly; a small change in cash flows or discount rate could change the conclusion.

2. Investment Vehicle Characteristics: 17 questions

This section covers 12 groups of product features. The official outline includes cash and cash equivalents; fixed-income securities and valuation; equity types and characteristics; equity valuation and offerings; pooled investments; futures and options; alternative investments; insurance-based products; and other assets such as commodities, precious metals, and digital assets.

• Cash and cash equivalents: insured deposits, certificates of deposit, commercial paper, and Treasury bills. Distinguish a bank deposit from a money-market mutual fund and examine liquidity, issuer, and insurance status.
• Fixed income: coupon and zero-coupon structures, maturity, duration, ratings, credit spread, call features, liquidity, tax treatment, yield to maturity, yield to call, conversion value, and discounted-cash-flow valuation.
• Equities: common, preferred, and convertible preferred shares; voting and liquidation rights; dividends; restricted stock; employee options; and public offerings such as IPOs, secondary offerings, and SPAC or blank-check vehicles.
• Pooled investments: open-end and closed-end funds, private funds, UITs, ETFs, and listed or nontraded REITs. Understand NAV, market premiums and discounts, share classes, sales loads, deferred charges, ongoing fees, liquidity, taxes, and benchmarks.
• Derivatives and alternatives: futures, calls, puts, ETNs, leveraged or inverse funds, structured products, and their costs, benefits, risks, and application.
• Insurance and other assets: fixed, variable, and equity-indexed annuities; term, whole, universal, and variable life; commodities, precious metals, and digital assets.

Product questions often hinge on distinguishing a stated return from the investor's actual return. A bond coupon is based on par; current yield divides coupon dollars by market price; yield to maturity includes all promised cash flows and assumptions about reinvestment and holding to maturity. A pooled fund's expense ratio can reduce return even if the fund has no front-end load. A private fund's infrequent valuation does not remove economic risk or create daily liquidity.

Original comparison: A client wants intraday access to an equity index. An ETF trades on an exchange during the day at a price that can differ from NAV. An open-end index mutual fund typically redeems at the next calculated NAV after a properly submitted order. Both offer pooled exposure, but trading mechanism, cost, liquidity, and price certainty differ. The right answer depends on which feature the question asks about.

3. Client recommendations and strategies: 30 questions

This is a large applied section, with 11 components. Begin with the type of client and profile: individuals, sole proprietors, business entities, trusts, estates, foundations, and charities; goals, cash flow, assets and liabilities, taxes, risk tolerance, nonfinancial preferences, time horizon, and information-gathering methods.

The outline then covers capital-market theory, including modern portfolio theory, CAPM, and the efficient market hypothesis; allocation and portfolio management strategies; active and passive styles; growth, value, income, and capital appreciation approaches; diversification, sector rotation, dollar-cost averaging, options, leverage, and volatility management. Questions can ask how a strategy works or whether it fits the client's purpose.

Tax and planning content includes individual, business, trust, and pass-through taxation; capital gains, qualified dividends, basis, marginal tax rates and AMT; retirement plans such as traditional and Roth IRAs, solo 401(k)s, qualified plans and nonqualified plans; ERISA fiduciary issues and prohibited transactions; 529 and Coverdell education accounts; UTMA/UGMA; HSAs and FSAs; ownership transfer, trusts, wills, beneficiaries, TOD/POD and donor-advised funds.

Trading and portfolio-performance content connects terminology with client outcomes. Understand bids, offers, quotes, market, limit and stop orders, short sales, cash and margin accounts, principal and agency trades, payment for order flow, the roles of broker-dealers, custodians, market makers, and exchanges, plus commissions, markups, spreads and best execution. Performance measures include time- and dollar-weighted return, annualized and holding-period return, IRR, expected and inflation-adjusted return, after-tax return, current yield and relevant benchmarks.

A client recommendation should integrate, not isolate, these topics. A 62-year-old with a pension, a five-year tuition obligation for a grandchild, a concentrated employer-stock position, and a high tax bracket has several goals and constraints. Ask which assets are available for each time horizon, how concentrated risk affects the household, whether the education account offers tax advantages, and how a sale of employer shares affects taxes. Age alone or a single account balance cannot determine a complete recommendation.

4. Laws and unethical practices: 45 questions

The law section accounts for nearly half the scored test and has eight components. It addresses regulation of state-registered and federal covered investment advisers; regulation and registration of IARs; broker-dealers and their agents; securities and issuers; client communications and business practices; ethical and fiduciary obligations; and other conduct and regulatory matters specified in the study guide.

The guide draws from federal statutes including the Investment Advisers Act of 1940, Securities Act of 1933, and Securities Exchange Act of 1934; SEC and FINRA rules; the Uniform Securities Act of 1956 as amended by NASAA; NASAA Model Rules, Statements of Policy, and Model Acts; and the Uniform Prudent Investor Act. NASAA's amended 1956 Uniform Securities Act is the state act identified for Series 66 testing, not the later 2002 version.

A common trap is to memorize the name of a rule but not the tested relationship. For each legal fact pattern identify the actor, capacity, conduct, jurisdiction, client or counterparty, registration status, and any exception. A question may describe an undisclosed referral fee without naming the relevant conduct rule. The candidate must recognize that compensation creates a conflict and assess disclosure and client-interest obligations.

Example: a federal covered adviser operates in State A and has a representative with a place of business in State B. The state-level analysis may distinguish adviser registration from notice filing and IAR registration. Do not assume that federal covered status eliminates all state requirements or that the representative automatically shares the adviser's exemption. Identify each entity and the exact registration issue being asked before applying the rule.

Use weights without leaving gaps

The largest return from study time generally comes from the 45-item law section and 30-item client-recommendation section. That does not mean an unprepared candidate should ignore products or economics. The product area feeds many recommendation scenarios, and basic analytical errors can cost points in more than one section.

A 10-hour review block might allocate roughly 4.5 hours to law, 3 hours to recommendations, 1.7 hours to investments, and 0.8 hours to economics if the candidate is equally strong everywhere. In practice, a candidate should adjust based on diagnostics. If law is weak, move more time there; if the legal score is stable but current yield and portfolio statistics are confused, shift some time to quantitative review while retaining law recall practice.

Separate initial learning from spaced retrieval. Read or watch one topic, close the material, and explain it in your own words. The next day solve mixed questions from that subject and another one. A week later revisit the error log. This rotation makes it harder to answer from a clue in the chapter heading and better tests recognition of an issue in a realistic prompt.

A one-page outline-to-study map

1. Create four columns for the blueprint areas and write the number of scored questions at the top: 8, 17, 30, and 45.
2. Under economics, list formulas and interpretations: NPV/FV/IRR, ratios, alpha/beta, Sharpe, correlation, P/E and P/B.
3. Under investments, group products by return, risk, liquidity, cost, tax and investor rights. Include the 12 official components so specialized assets do not disappear.
4. Under recommendations, organize client profiles, portfolio theory, tax and retirement, ERISA, special accounts, ownership, trading and performance.
5. Under law, build a matrix for adviser, IAR, broker-dealer, agent, securities/issuer, registration, communication, custody, records, conflicts and prohibited conduct.
6. Use practice results to mark green, amber or red topics, then spend the next session on a specific red concept rather than rereading the entire outline.

Keep one source map for legal rules. Record the actor, law or model rule, trigger, filing or registration consequence, exception, and one example. For investments, make a parallel comparison grid. These two tools prevent long outline lists from becoming disconnected flashcard facts.

What the outline does not imply

The outline does not disclose the exact questions, item order, which pretest items appear, or the precise allocation of every subtopic within a domain. It does not mean each listed bullet receives equal attention on each examination. Nor does it endorse a particular provider or textbook. Treat the named sections and their weights as the map, then use sound review methods to learn the concepts.

The outline is also not a substitute for state law after licensing. NASAA model provisions are model documents; jurisdictions decide whether and how to adopt them. Series 66 assesses defined knowledge for qualification, while a registered professional remains responsible for the actual laws and regulator requirements that apply in each state where business is conducted.

Sources

NASAA Series 66 Exam Study Guide and Test Specifications effective June 12, 2023; NASAA Series 66 Exam Content Outline; FINRA Series 66 exam page.