Series 7 practice questionmediumMarketing and Prospecting — Referral Fees
A registered representative receives a $100 gift card from a client for referring a friend who opens a new account. Which statement best reflects regulatory requirements?
- ARegistered representatives may never accept compensation from clients.
- BReceiving compensation is permitted if disclosed to the firm and approved.✓ Correct answer
- CReferral fees are allowed only if under $25 in value.
- DOnly cash gifts are prohibited; gift cards are allowed.
Explanation
Why B — Receiving compensation is permitted if disclosed to the firm and approved.
Registered reps may not accept compensation from clients unless it's disclosed to and approved by the member firm to avoid conflicts of interest.
Turn it into reps
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