Series 7 practice questionhardSeminars and Public Appearances — Use of Testimonials
During a seminar, a registered representative asks a satisfied client to give a testimonial about the firm’s services. According to FINRA regulations, which of the following statements is TRUE regarding the use of testimonials in public appearances?
- ATestimonials can only be used if the client is not compensated, and no disclosure is necessary.
- BTestimonials are permitted if the client is compensated and this fact is disclosed, along with whether the testimonial reflects the typical experience.✓ Correct answer
- CTestimonials may be used without restriction as long as they are accurate.
- DTestimonials are prohibited in any seminar setting due to the risk of misleading statements.
Explanation
Why B — Testimonials are permitted if the client is compensated and this fact is disclosed, along with whether the testimonial reflects the typical experience.
FINRA permits testimonials in public appearances if any compensation is disclosed and the communication clarifies if the testimonial is unique or typical.
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 representative uses a hypothetical illustration at a seminar to demonstrate the potential growth of a $100,000…
- A representative conducts a public seminar and makes unscripted comments about specific mutual funds. Which of the…
- Before distributing retail communications, what must a registered representative generally obtain?
- A registered representative is planning to host a seminar where options strategies will be discussed in detail and…