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← Series 63: Regulation of Investment Advisers
Series 63 practice questionmediumEdge Case—Solicitors and Finders

A solicitor refers clients to a third-party investment adviser and receives a flat referral fee for each client. The solicitor gives no investment advice. Under the USA, the solicitor is:

  1. AAn investment adviser because they receive a fee.
  2. BNot an investment adviser, as they do not provide investment advice.✓ Correct answer
  3. CAn investment adviser only if the referral fee is ongoing.
  4. DAn investment adviser if they are affiliated with a registered adviser.
Explanation

Why B — Not an investment adviser, as they do not provide investment advice.

Solicitors who do not provide advice are not advisers under the USA (USA §401(c)), regardless of compensation method. A is incorrect—the fee is for solicitation, not advice. C and D add conditions not present in the statute.

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