Challenge Your Exam Readiness With Our Free Series 66 License Practice Questions

Suitability questions form a significant portion of the Series 66 exam. Advisors must balance an investor’s risk tolerance, time horizon, and objectives. For a client approaching retirement, preservation of capital is paramount, and income becomes more important than growth. A conservative allocation of 20% equities and 80% bonds minimizes volatility while generating steady interest income. Equity exposure is still included to provide growth potential and inflation protection. An 80/20 or 100% equity allocation is too aggressive and exposes the investor to high volatility. A 60/40 allocation is moderate, more suited for mid-career investors with longer horizons. The exam stresses the fiduciary duty of advisers to recommend allocations tailored to the client’s needs, not the adviser’s preferences. Misallocation may constitute unsuitability, a regulatory violation under NASAA rules.