Series 63 practice questionmediumBroker-Dealer vs. Investment Adviser
A registered broker-dealer charges a client an annual fee for a comprehensive financial plan and receives commissions from recommended securities. Under the USA, the broker-dealer is:
- AExcluded, as all broker-dealers are exempt
- BNot excluded, as special compensation is received for advice✓ Correct answer
- CActing as an investment adviser representative
- DAutomatically a federal covered adviser
Explanation
Why B — Not excluded, as special compensation is received for advice
Receipt of special compensation (separate fee) for advice removes the broker-dealer exclusion (Section 401(c)).
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