Client Communication & Advocacy Flashcards
7 cards from real Series 66 – Uniform Combined 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 7 Client Communication & Advocacy flashcards as text
Under the NASAA model rule, when must a state-registered investment adviser deliver its Form ADV Part 2 brochure if the client is NOT given a right to cancel?
Answer: At least 48 hours before entering into the advisory contract
Without a 5-business-day penalty-free cancellation right, the brochure must be delivered at least 48 hours before the contract is entered into.
An adviser delivers the brochure at the moment the client signs the advisory contract. What must the contract allow for this delivery to be acceptable?
Answer: The client may terminate within 5 business days without penalty
Delivery at signing is permitted if the client can cancel within 5 business days without penalty.
An agent tells a nervous retiree, "This bond fund can't lose money — I'll personally make up any loss." Which violation has occurred?
Answer: Guaranteeing a client against loss
Promising to guarantee a client against loss is a prohibited unethical practice under the Uniform Securities Act.
An investment adviser representative adds the initials "RIA" after his name on business cards. How would regulators view this?
Answer: Misleading, because it implies a professional designation or government approval
Using "RIA" after one's name is considered misleading because registration is not a credential or endorsement.
A client calls asking why her account fell 8% last quarter. What is the most appropriate response by her IAR?
Answer: Explain the performance factors candidly, relate them to her goals, and review whether her allocation remains suitable
Fiduciary duty calls for honest, balanced explanations and a suitability review rather than promises or evasion.
Which statement in an adviser's advertisement would most likely be considered misleading?
Answer: "Our strategy has been approved by the state securities administrator."
Implying that the administrator has approved or passed on the merits of a firm or strategy is prohibited.
A client asks her agent to keep her account details private from her adult son, who calls asking for her balance. What should the agent do?
Answer: Refuse to disclose information without the client's authorization
Client information may be disclosed only with client consent or when required by law or regulators.
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