Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Under the Uniform Securities Act (USA), the term “investment adviser” does not apply to
I. an investment advisory firm owned and operated by a sole proprietor.
II. a bank or savings institution.
III. an investment adviser representative.
IV. a broker-dealer or its agents if the advice is incidental to the business although there is a nominal charge for any specific investment advice given.
  1. I, II, III, or IV.
  2. I, II, and III only.
  3. II and III only.
  4. II, III and IV only.
Explanation
Answer: C - The term “investment adviser” does not apply to Selections II or III. The term “investment adviser” does not apply to a bank or savings institution or to an investment adviser representative. Those persons are specifically excluded from the definition provided by the USA. Any investment advisory firm, regardless of whether it is owned and operated by a sole proprietor, is considered to be an investment adviser. A broker-dealer that charges for its investment advice, even if it claims that the advice is incidental to its business, would be considered an investment adviser due to the special remuneration the firm receives for its advisory services.
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