By expanding its current broker-dealer
business to include financial planning and portfolio
management, TransPlanet Transactions has estimated
that it will increase annual revenues by 20%. In
addition to the commissions it receives on brokerage
transactions, TransPlanet will charge a separate
fee to individual investors who require financial
planning and portfolio management. By adding to company
profits, will TransPlanet be required to register
as an investment adviser?
a) Yes, because the company is receiving a separate fee for dispensing advice
b) Yes, it would be required to register as an investment advisor even prior to adding the new services
c) No, it is exempt as a broker-dealer
d) None of the above
Typically, TransPlanet would not be required to register as an investment advisor under the broker-dealer exemption, provided the company is only compensated through its brokerage commissions. Once TransPlanet adds fees for additional services, it no longer qualifies for the exemption and must register as an investment advisor. The requirement has nothing to do with the company’s desire to add to its profits.
The correct answer is b. Under these circumstances, the broker-dealer is not required to register with the state and the ...
Learn about whether a financial advisor may be required to be approved by FINRA, and what exams a financial advisor needs ...
The correct answer is d). A sales representative may not make trades in a state unless both the sales representative and ...
The correct answer is c. I is incorrect, since broker-dealers or their agents who don’t receive a fee for making investment ...
The correct answer is D). When an agent moves from one broker-dealer's employ to another, all parties are responsible for ...
Learn the conditions that require hedge fund advisors to register with the U.S. Securities and Exchange Commission.
A person or firm in the business of buying and selling securities, ...
The act of selling undesirable securities from the broker-dealer's ...
An advisor or firm engaged in the investment advisory business ...
A professional who helps individuals manage their finances by ...
Certain types or amounts of income not subject to federal income ...
A rule that can be used by a company to raise funds without actually ...