Uniform Investment Adviser Law Flashcards

Which of the following best describes the 'investment adviser' exemption available to publishers of general circulation newspapers?

Answer: Publishers of bona fide newspapers of general circulation are excluded from the definition of investment adviser

The Uniform Securities Act excludes publishers of bona fide newspapers, magazines, and financial publications of general and regular circulation from the definition of investment adviser.

An investment adviser representative registered in State A moves to State B but continues to serve only clients in State A. The IAR must:

Answer: Register in State B because that is now their state of residence and place of business

An IAR must register in the state where they maintain a place of business, so relocating to State B requires registration there regardless of where clients are located.

A state administrator issues a subpoena to an investment adviser as part of an investigation. The adviser must:

Answer: Comply with the subpoena or face civil and criminal penalties

State administrators have broad investigative powers, and failure to comply with a lawful subpoena subjects the investment adviser to civil and criminal penalties.

Under the Uniform Securities Act, an investment adviser that takes custody of client funds must:

Answer: Have an independent CPA perform a surprise examination of client assets annually

Investment advisers with custody of client assets are required under NASAA model rules to undergo an annual surprise examination by an independent CPA to verify the assets.

When an investment adviser provides a wrap fee program to a client, the adviser must disclose:

Answer: The services covered by the wrap fee and the additional charges, if any, beyond the wrap fee

Advisers offering wrap fee programs must disclose the services included in the program and any costs not covered by the wrap fee, such as certain transaction costs or third-party fees.

Which of the following is a correct statement about the fiduciary duty of a state-registered investment adviser?

Answer: The adviser must act in the client's best interest and disclose all material conflicts of interest

Investment advisers owe a fiduciary duty to clients, requiring them to act in the client's best interest and to fully disclose all material conflicts of interest that could affect the advice given.

A state-registered investment adviser wishes to change its name. It must:

Answer: File an amendment to its Form ADV within 30 days of the change

Material changes to Form ADV, including a firm name change, must be reported by filing an amendment within 30 days of the change occurring.