Series 7 practice questionmediumReferral Fees — Registered vs. Unregistered Persons
A brokerage firm wants to implement a referral program. Which individual may legally receive a referral fee under FINRA rules?
- AAn unregistered administrative assistant at the firm, for referring friends.
- BA registered representative of another FINRA member firm.
- CA non-employee who occasionally refers prospective clients.
- DA registered employee of the firm, for referring a new customer.✓ Correct answer
Explanation
Why D — A registered employee of the firm, for referring a new customer.
Only registered persons of the broker-dealer can receive referral fees for bringing in new business. Unregistered personnel and non-employees cannot be compensated for referrals.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 755+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Seeks Business for the Broker-Dealer questions
- A broker-dealer rents space in a credit union to offer investment services. What must the broker-dealer do at its…
- A broker-dealer conducts business on the premises of a bank through a networking arrangement. What must be disclosed to…
- A broker-dealer wants to reward an unregistered bank employee for referring clients. What is the maximum value of a…
- A registered representative wishes to compensate a non-registered individual for referring a high-net-worth client to…