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← Series 63: Regulation of Investment Advisers
Series 63 practice questionmediumDistinction—Investment Adviser vs. Agent

Which statement BEST describes the distinction between an agent of a broker-dealer and an investment adviser under the USA?

  1. AAn agent may give investment advice for a commission and not be an adviser, but becomes an adviser if they charge a separate fee for advice.✓ Correct answer
  2. BAn agent is always considered an investment adviser if they give any investment advice.
  3. CInvestment advisers only exist as individuals, whereas agents can be firms.
  4. DAn agent can never be an investment adviser, regardless of compensation.
Explanation

Why A — An agent may give investment advice for a commission and not be an adviser, but becomes an adviser if they charge a separate fee for advice.

Agents are excluded only when advice is incidental and no separate fee is charged (USA §401(b), §401(c)). Charging a separate fee for advice meets the adviser definition. Options B and D are too broad; C misstates the definitions.

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