A broker-dealer in State Y charges an annual wrap fee for providing investment advice and trade execution to retail clients. Which best describes the broker-dealer's registration requirement under the USA?

1. AThe broker-dealer must register as an investment adviser due to special compensation.✓ Correct answer
2. BNo IA registration is required if the broker-dealer is registered with FINRA.
3. CThe broker-dealer is exempt if advice is only given to institutional clients.
4. DNo registration is needed if the wrap fee is under $1,000.

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