Investment Advisers and Investment Adviser Representatives Flashcards
6 cards from real Series 63 – Uniform Securities Agent State Law Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Investment Advisers and Investment Adviser Representatives flashcards as text
Under the USA, which of the following persons is excluded from the definition of 'investment adviser representative'?
Answer: An employee who performs only clerical or administrative functions
Persons who perform purely clerical or ministerial functions are excluded from the definition of investment adviser representative.
Under the USA, what is a 'wrap fee' program offered by investment advisers?
Answer: A fee program that bundles investment advice, brokerage, and administration services for a single all-inclusive fee
A wrap fee program bundles investment management, brokerage execution, and administrative services into a single comprehensive fee, typically charged as a percentage of assets.
Under the USA, the 'pay-to-play' rule generally prohibits investment advisers from doing what?
Answer: Making political contributions to government officials who influence the selection of investment advisers for public pension funds
Pay-to-play rules prohibit investment advisers from making political contributions to government officials who have influence over the selection of advisers for public pension plans.
Under the USA, which type of fee arrangement for investment advisers is generally prohibited without meeting specific conditions?
Answer: Performance-based fees that give the adviser a share of capital gains
Performance-based fees (sharing in client gains) are generally prohibited unless the client is a 'qualified client' meeting specific net worth or AUM thresholds.
Under the USA, what must an investment adviser disclose regarding compensation received from third parties for recommending securities?
Answer: Full disclosure of the compensation arrangement to clients before or at the time of the recommendation
Investment advisers must fully disclose any compensation received from third parties for recommending securities to clients, as this creates a material conflict of interest.
Under the USA, which of the following is a requirement for investment adviser contracts?
Answer: They must not contain a provision allowing the adviser to be assigned without client consent
Investment adviser contracts under the USA must not include any provision that allows assignment of the contract without client consent, protecting clients from unwanted changes in adviser.
How this page was made: written with AI tools and published by Nathan Beja, founder of Practice Test Geeks, who is responsible for its content. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy
Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy