Series 7 practice questioneasyReferral Programs — Definition
What is the primary purpose of a broker-dealer referral program?
- ATo underwrite new securities offerings
- BTo offer legal services to clients
- CTo encourage individuals to refer potential clients to the firm✓ Correct answer
- DTo provide investment advice to current clients
Explanation
Why C — To encourage individuals to refer potential clients to the firm
A referral program is designed to incentivize individuals or entities to refer new clients to the broker-dealer, thereby increasing the firm's client base.
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