Under the "Brochure" rule of the Investment Advisers Act of 1940, which of these statements is true?

a. The ADV Part II or similar brochure must be offered to existing clients annually.
b. The ADV Part II or similar brochure must be given to existing clients annually.
c. The ADV Part II or similar brochure must be given to existing clients quarterly.
d. The ADV Part II or similar brochure must be given to existing clients semi-annually.

The correct answer is "a" – the brochure must be offered to existing clients once a year, but the IA is not required to send it to clients who decline a copy.

  1. In your initial meeting with an investment advisor representative (IAR) ...

    The correct answer is b): The investment advisor representative (IAR) can tell the prospective client all of the following ... Read Answer >>
  2. An advisor has all client advisory fees automatically deducted from their accounts ...

    The correct answer is c) An advisor is not deemed to have custody of client funds when debiting management fees from the ... Read Answer >>
  3. Which of the following signatures are required on a client’s new account form ... ...

    The correct answer is B. While local practices of a broker-dealer might require the client to sign the form, even when opening ... Read Answer >>
  4. Under the Uniform Securities Act, which of the following advisers is NOT defined ...

    The correct answer is b). Federal covered advisers include those who manage client assets of $25,000,000 or more or who advises ... Read Answer >>
  5. What is the difference between fee-based advisors and commission-based advisors?

    Understand the difference between fee-based advisers and commission-based advisers. Learn what types of duties each type ... Read Answer >>
  6. Under the Uniform Securities Act, client information may not be disclosed to a third ...

    The correct answer is c. No authorization is needed from the client’s wife since it is a joint account. Also none is needed ... Read Answer >>
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