Series 63 practice questionmediumReferral Fees
Which is true under the USA about an agent receiving a referral fee from another broker-dealer?
- AThe agent must disclose the referral fee to the client if it could influence recommendations✓ Correct answer
- BThe agent may never receive referral fees
- CDisclosure is required only to the employing broker-dealer
- DReferral fees are only allowed if the client is an accredited investor
Explanation
Why A — The agent must disclose the referral fee to the client if it could influence recommendations
Referral fees that could influence recommendations are conflicts of interest and must be disclosed to clients (USA Section 402). The other options are either too restrictive or miss the disclosure requirement.
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