Q:

Under the Uniform Securities Act, registration with the Administrator as an investment adviser is required in which of the following situations?

I. A broker-dealer that makes investment recommendations to clients.
II. A broker-dealer that charges a fee for securities advice.
III. A financial planner that charges a fee for investment recommendations.
IV. A general circulation investment newsletter.

a) II, III & IV
b) I & III
c) II & III
d) I & II

A:

The correct answer is c.
I is incorrect, since broker-dealers or their agents who don’t receive a fee for making investment recommendations are not required to register, since the advice is considered incidental to their services. IV is incorrect, since investment newsletter publishers only need to register if they give recommendations based on specific client situations. However, broker-dealers and financial planners that provide investment recommendations for a fee do need to register as in investment adviser with the Administrator.


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