Series 63 practice questioneasyDefinition of Investment Adviser — General Definition
In a state-law practice set, a candidate reviews the following scenario. Treat the facts as a straight Series 63 application question. Under the Uniform Securities Act, which of the following BEST describes an 'investment adviser'?
- AA bank acting in its regular banking business
- BA person who sells insurance products only
- CA person who, for compensation, engages in the business of advising others about the value of securities✓ Correct answer
- DA broker-dealer whose advice is solely incidental to the conduct of its business
Explanation
Why C — A person who, for compensation, engages in the business of advising others about the value of securities
According to the USA Section 401(c), an investment adviser is any person who, for compensation, engages in the business of advising others about the value of securities or the advisability of investing in securities. The exam trick is the framing, not the underlying Uniform Securities Act rule.
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