Use a Decision Tree to Decide if You Should Become Series 65 licensed

By: Roccy DeFrancesco, JD, CAPP, CMP

I recently read a book titled How to Decide by Annie Duke and it is terrific. I really learned the benefits of using a decision tree to make better decisions in life.

DOWNLOAD a “Should You Get a 65 License” Decision Tree

Annie’s book motivated me to create a decision tree for advisors who are deciding whether to become 65 licensed. To download a decision tree that you can fill out, click on the following (I have one for insurance agents and one for Series 7 licensed advisors):

For years I’ve been telling insurance agents and Series 7 licensed advisors to get a 65 license.

Why? Increased revenue (reoccurring) and giving better advice to clients.

Unique RIA for advisors to use

I recently created an RIA for advisors who are looking for a unique AUM platform to use. The RIA has rock star Joe Maas as the CIO and used 3rd party multi-manager portfolios (mostly tactical portfolios).  To learn about the Peace of Mind Wealth Management, click on the following link:

Unfortunately, many advisors have not pulled the trigger and this newsletter is for them.

Common ways advisors decide to get (or not) a 65 license (the first two are worthless):

  1. Gut decision—it seems like too much work and I don’t really need it.
  2. First instinct—I never wanted to get securities licensed so I’m not going to.
  3. Pros and Cons list—this is at least an attempt to make a more informed decision.

A pros and cons list is a poor person’s decision tree and it has some flaws. Let’s exam the flaws in the context of deciding to get a 65 license for an insurance agent (the pros/cons list would be different for someone who is Series 7 licensed).

Should I sit for the 65 Securities Licenses Exam?


  1. Generate more annual revenue
  2. Create reoccurring revenue
  3. Provide more comprehensive advice
  4. Insulate myself from compliance problems


  1. Studying for the exam (I don’t have time and I’m afraid I’ll fail)
  2. I don’t need it to make a good living
  3. I don’t want to be regulated by the SEC
  4. I don’t really want to manage a client’s money
  5. I’m afraid of losing clients when the stock market crashes

How helpful is this pros/cons list to make the best decision?

It’s helpful, but not that helpful.

Let’s redo the list by adding a branch to it to make it a “DECISION TREE.” Keep the same list, but add a weight to each one (high, medium, or low importance).


  1. High
  2. High
  3. Moderate
  4. High


  1. Moderate (I could make time but haven’t chosen to yet)
  2. Moderate (I make decent money but more would be better)
  3. Moderate (this should be low because a 65 helps insulate from compliance problems)
  4. Moderate (this would be low if the advisor used a platform where this wasn’t a concern)
  5. Moderate (this would be low if the advisor used a platform where this wasn’t a concern)

When expanding the decision tree only one level, it becomes clear that what’s most important is higher income and reoccurring revenue. Since a 65 license can help with both goals, this exercise helps the advisor determine that it IS a good idea to move forward and sit for the 65 exam.

Expanded trees—decision trees can be 3, 4, 5 levels. Added to the tree could have been the list of potential outcomes after getting a 65:

  1. I brought on board $2.5 million in AUM the first year
  2. I sold 10% more FIAs and/or IULs because of my new clients
  3. I gave better/more comprehensive advice to clients
  4. I got more client referrals because of my expanded services
  5. I gave more suitable advice (I didn’t try to shove too much money into fixed products)
  6. I picked up zero AUM because I wasn’t comfortable
  7. I couldn’t find an RIA with a platform I liked (so no new AUM)

You can also add percentage weights to the above as your guess for what might happen (which I’m not going to do because of space issues).

Decision trees can help in all your decisions

While my example is about getting a 65 license, you can use a decision tree on  any important decision you need to make (next time you have one, give it a try and I think you’ll be pleased with the outcome).