Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Which of the following describes an investment adviser that is not required to register with the state Administrator?
  1. MoeMoney Investment Advisers, LLC has an office in the state with a client base of fifty individuals.
  2. Financial Freedom Investment Advisers has no offices in the state although it does advise six wealthy individuals who are residents of the state.
  3. CanDo Broker-Dealers is a state-registered broker-dealer. It has begun to offer asset management services to a few of its wealthier clients for a small management fee equal to 0.1% of the assets under management.
  4. Buckeye Investment Advisers has no offices in the state, but it provides portfolio management services to an insurance company located in the state.
Explanation
Answer: D - Buckeye Investment Advisers is not required to register with the state Administrator since it has no offices in the state and provides portfolio management services to an institutional investor within the state. Both MoeMoney and Financial Freedom must register since they advise more than 5 individual clients. It doesn’t matter in that case whether they have offices within the state or not. CanDo is registered only as a broker-dealer, but it has begun offering investment advice for a fee, so it must also register with the state as an investment adviser.
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