Study asset allocation, active and passive styles, diversification, sector rotation, leveraging, and related strategy techniques on Series 66.
On this page
This section asks whether the candidate can translate client information into a portfolio approach. Strategic and tactical allocation, active and passive management, diversification, volatility management, and other techniques all appear because they affect how the advice is implemented and defended.
The strongest approach is to ask what problem the strategy solves for the client. If a tactic adds complexity without a clear client need, it is often the wrong answer.
Key Takeaways
Strategy choices should be matched to the client profile and objective.
Active versus passive and strategic versus tactical are practical recommendation decisions.
Series 66 often rewards the simpler, better-justified strategy over the flashier one.
Sample Exam Question
Why might a simple diversified allocation beat a more aggressive tactical strategy on a Series 66 question?
A. Because tactical strategies are always prohibited B. Because the diversified approach may fit the client’s objective, risk tolerance, and complexity tolerance better C. Because diversification eliminates all losses D. Because passive strategies are legally required for retail clients
Answer: B. Series 66 is an advice exam, so the best strategy is the one that fits the client rather than the one that sounds most sophisticated.