Series 63 practice questionhardBroker-Dealer Special Compensation
A broker-dealer in State Z offers a fee-based advisory program and charges clients based solely on assets under management. Under the USA, the broker-dealer:
- AIs excluded from the investment adviser definition
- BMust register as an investment adviser because of special compensation✓ Correct answer
- CIs an investment adviser representative
- DIs a federal covered adviser
Explanation
Why B — Must register as an investment adviser because of special compensation
Charging asset-based fees is special compensation and removes the broker-dealer exclusion (Section 401(c)).
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