Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Which of the following does not necessarily have to be included in the contract between an investment adviser and an individual client, according to the Uniform Securities Act (USA)?
  1. the compensation agreement, which cannot be a percentage of the capital gains or capital appreciation earned on the portfolio for all but the wealthiest of individual clients.
  2. a statement stipulating that the contract cannot be assigned to another party without the client’s consent
  3. if the investment adviser is a partnership, a statement indicating that the client will be notified if there is any change in the partners within a reasonable time period
  4. a statement of the investment policy that has been agreed upon between the adviser and the client
Explanation
Answer: D - A statement of the investment policy does not have to be included in the contract between an investment adviser and an individual client. The statement of investment policy is generally developed after the contract is signed.
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