Series 63 practice questionmediumDefinition of Investment Adviser — Compensation Requirement
A training manager asks you to analyze the following USA issue. Prioritize the registration trigger and ignore irrelevant noise. Samantha regularly provides detailed securities analysis to her coworkers for free. She has never charged for her advice, nor does she receive any indirect compensation. According to the USA, is Samantha an investment adviser?
- ANo, because she is not registered as an investment adviser
- BYes, because she provides analysis on securities
- CYes, because her advice is regular and specific
- DNo, because she does not receive compensation✓ Correct answer
Explanation
Why D — No, because she does not receive compensation
The USA defines an investment adviser as someone who provides advice about securities as part of a regular business and receives compensation. Without compensation, Samantha does not meet the definition (Section 401(c)). The exam trick is the framing, not the underlying Uniform Securities Act rule.
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