CH 6/7 Random 30 questions
Broker-dealers are required to furnish clients with a fee disclosure document. All of the following are true statements about that document except
- changes to fee schedule may be disclosed on website - changes must be upto date - changes must be announced in advance (usually 30 days) - does NOT NEED TO FILE W ADMIN
Under NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, the contract between an investment adviser and its clients shall
MUST BE IN WRITING (all contracts initial and renewal must be in writing_; renewal does not hv a fixed day
Strategic Capital Asset Managers (SCAM) is an investment adviser registered in five states. In lieu of preparing a fancy brochure, SCAM is permitted to provide its clients with a copy of its
Form ADV Part 2 (both of its parts) is acceptable for use as the firm's brochure - part 1 is just for registration purposes, 1b is just for state-reg advsiers like this firm - part 2 appendix 1 is used for IAs with wrap fee programs -part 2a is the brochure with info for consumers and part 2b is info on anyone who has discretion (even if no direct contyact) or direct contact with investors --> form adv part 2 both parts are acceptable to use as the brochure
In an effort to combat money-laundering, financial institutions are required to file reports with FinCEN for each cash transaction
IN EXCESS OF 10,000$$$$$$
Which of the following clients of a registered investment adviser is exempt from the requirement to receive annual delivery of the adviser's brochure?
There are 2 exemptions from requirement to receive the annual delivery of the adviser's brochure: 1. Service rendered meets the definition of impersonal advisory services and the annual fee is less than $500 2. Advisory contract is with a registered investment company such as a mutual fund or a UIT
Your friend is a licensed life insurance agent whose client wants to purchase a variable annuity. You are a licensed securities and insurance agent, and your friend wants you to sell the policy and split commissions with him. Splitting commissions
You must be licensed in both insurance and securities to sell variable annuities or to split commissions. Commissions on securities transactions may only be split with registered agents of the same or affiliated broker-dealers.
Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, it would be considered a prohibited practice for a broker-dealer to
have history of repeatedly delayiong delivery of securities to its customers (failing to meet net capital reqs or registering w admin is not prohibited - its against the law)
A client of an investment adviser representative of a federal covered investment adviser wishes to place a favorable comment on the investment adviser's website. This action
would be considered a testimonial and require that disclosure be made of any comp received by the client *testimonials for investment advisers and their representatives posted by clients are a permitted practice as long as proper disclosures are made. One of the most important of those is if the person supplying the testimonial was compensated.
