Frequently Asked Question
Under what circumstances can an IA choose to sell a security for a client without first receiving written discretionary authority?
A. When the transaction is less than $5,000
B. When the IA decides only how many shares to sell
C. When the client tells the IA which stock he or she wants to sell
D. When the IA decides only the time and/or price to complete the sale
The correct answer is "d": time and price only. If the IA were to decide which security to sell or the number of shares to sell before receiving written discretionary authority, it would be considered an unethical business practice.
B. When the IA decides only how many shares to sell
C. When the client tells the IA which stock he or she wants to sell
D. When the IA decides only the time and/or price to complete the sale
The correct answer is "d": time and price only. If the IA were to decide which security to sell or the number of shares to sell before receiving written discretionary authority, it would be considered an unethical business practice.
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