Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

Start a Study Session Sign up for Question of the Day
A-2-Z Associates is a full service brokerage and is also in the investment advisory industry, charging its clients for investment advice for additional remuneration. Which of the following statements is true?
  1. A-2-Z can charge an individual client an advisory fee for its advice or a commission when it executes a trade that the client makes based on that advice, but not both.
  2. A-2-Z can charge the client both an advisory fee for its advice and a commission on any trade the client makes based on the advice. This is all laid out in the advertising brochures full service brokerage firms like A-2-Z provide their prospective clients.
  3. A-2-Z can charge the client both an advisory fee for its advice and a commission for the execution of a trade based on that advice, but it must inform the client of its potential conflict of interest in doing so and get the client’s written consent.
  4. A-2-Z can charge the client only an advisory fee when it is serving as an investment adviser; no commissions may be collected.
Explanation
Answer: C - A-2-Z can charge a client it advises an advisory fee for its advice and a commission for the execution of a trade based on that advice, but it must inform the client of the potential conflict of interest and get the client’s written consent. It must also provide an itemized statement of all such agency cross transactions performed for the client at least annually.
Was this helpful? Upvote!
Login to contribute your own answer or details
Start a Study Session Sign up for Question of the Day

Top questions

Related questions

Most popular on PracticeQuiz