SERIES 65 CHAPTER 13 PART 2 || Already Graded A+.
In their advertising campaigns, state-registered investment advisers are prohibited from doing all
of the following except correct answers offering free services.
If an investment adviser has engaged a website designer, what may the designer include on the
website? correct answers A general description of the types of investment advisory programs
offered by the firm
As a general matter, the regulators do not treat posts by customers or other third parties as the
firm's communication with the public. Under certain circumstances, however, third-party posts
may become attributable to the firm. Whether third-party content is attributable to a firm depends
on whether the firm has (1) involved itself in the preparation of the content or (2) explicitly or
implicitly endorsed or approved the content. Where the firm endorses or approves of the material
but has no part in its creation, it is known as correct answers adoption.
ABC Securities, a registered broker-dealer, has a wholly owned subsidiary, ABC Real Estate
Ventures. ABC Real Estate Ventures is in the business of structuring limited partnership
offerings designed to afford qualified investors an opportunity to earn income from commercial
property. If an agent representing ABC Securities were to recommend one of these programs to a
qualified client, correct answers disclosure of the potential conflict of interest must be made.
Clark, a partner with a minority interest in ABC Investment Partners, a registered investment
adviser, withdraws from the partnership to form his own separate partnership, Clark Advisers.
ABC Investment Partners correct answers must notify its clients of Clark's departure within a
reasonable period.
Strategic Capital Asset Managers (SCAM) is preparing its Form ADV, Part 2B relating to certain
individuals. On this form, SCAM must disclose all of the following information except correct
answers compensation earned on dealings with clients.
NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment
Adviser Representatives, and Federal Covered Advisers states that it would be considered an
unethical business practice for an investment adviser to charge an unreasonable advisory fee. In
which of the following cases would it be likely that the Administrator would find the adviser's
compensation to be unreasonable?
I. An adviser's fee schedule is not competitive with other advisers in the same general area
offering essentially the same services.
II. In addition to charging a fee based on assets under management, the adviser also charges
commissions on any securities transactions he effects.
III. The adviser charges the same hourly fee, regardless of the amount of the specific client's
assets under management.
IV. The fee is projected to consistently be more than the expected return in the portfolio. correct
answers I and IV
, Which of the following statements may not be made by an agent in regard to a security registered
with the SEC under the Act of 1933? correct answers "The SEC has approved of this issue, and
that's why I'm so glad to be able to offer it to you."
In designing a client's portfolio, a registered investment adviser representative of Greater Wealth
Advisory Services recommends the purchase of several stocks from the inventory of Greater
Wealth's wholly owned broker-dealer. Under the Investment Advisers Act of 1940 this activity
requires written: correct answers disclosure to the client and consent prior to completion of the
transaction.
An agent with a nationally known broker-dealer has been opening new accounts with middle-
income clients. When asked for the reason for the success, the agent replies that prospects are
offered a money-back guarantee. That is, if any security the agent recommends fails to increase
in value by at least 25% in six months, the agent will make up the difference. This type of
guarantee correct answers is an unethical and prohibited practice.
In designing a client's portfolio, a registered investment adviser representative of Greater Wealth
Advisory Services recommends the purchase of several stocks from the inventory of Greater
Wealth's wholly owned broker-dealer. Under the Investment Advisers Act of 1940, this activity
requires written correct answers disclosure to the client and consent prior to completion of the
transaction.
Matt, a registered investment adviser, operates an office down the hall from Jane, a CPA.
Because Jane has no interest in portfolio management, she frequently refers her clients to Matt
for investment advice. When one of Jane's clients signs a letter of engagement with Matt, Matt
sends Jane a $200 referral fee. This occurred five times in the previous year. This situation is
correct answers permitted if the referral fee is disclosed to the appropriate clients.
If John Good, a properly registered investment adviser, opens his own office and hires several
representatives to work for him, his business card may not read correct answers Good
Performance Advisers, Inc.
Content published on social media that allows for others to comment on, reuse, or "like" it is
considered to be correct answers interactive content.
An investment adviser holds a small position in the common stock of ABC Corporation, with a
current market value of approximately $5,000. ABC Corporation will offer additional stock in a
subsequent primary offering, and the adviser recommends the stock to several clients. Which of
the following reflects the most appropriate behavior on the part of the adviser? correct answers
The adviser may recommend the stock, provided she discloses to clients receiving the
recommendation that she holds a small position in the stock.
Associated Wealth Managers (AWM) is registered with the SEC as a registered investment
adviser. As a consequence, if there have been any material changes, AWM must send a copy of
its brochure, or a summary of the changes, to correct answers all clients within 120 days of the
end of its fiscal year.
