When it comes to knowing the difference between the definition of a Series 66 agent vs IAR (investment advisor representative), there are some clear lines. Some are less clear. In today’s post, we outline some simple tips and tricks.
Series 66 Agent vs IAR: Transacting vs Advice
On the Series 66 exam, we see confusion a lot around who is an agent and who is an IAR. This exam has very specific definitions that are set by the Uniform Securities Act (USA).
The USA helps clarify the higher level function of the agent and the IAR.
Let’s start with the agent. The agent’s primary job function is to effect transactions. The broker-dealer is the employer for which the agent works. Thus, you should keep in mind that the “agent” is always an individual (or, human being) and the broker-dealer is a firm.
Though agents are in the business of transacting, this does not preclude them for giving advice. However, if they are not being paid for the advice, then it is incidental and they are simply agents (and not ALSO IARs).
IARs
On the other hand, an investment advisor representative is an individual (meaning, a human being) that works for an investment advisor (a firm!), and gets paid for giving advice. They do not transact.
If an IAR recommends to a client for example, to purchase Apple stock, then they may also point them towards a broker dealer in order to make the actual trade. The IAR does not make the trade themselves. The investment advisor representative gets paid for providing the advice to buy Apple, but not actually executing on that advice.
Overall, deciphering the basics between the agent and the IAR is a good starting point. You will often find exceptions to the rule in this exam. However, if you can remember that agents transact and IARs give advice then you are off to a great start. For more clarity, we always recommend a Series 66 tutor. You can reach out here! Good luck!