Series 7 practice questionmediumFiduciary Accounts — Characteristics
Which of the following is an example of a fiduciary account?
- AAn individual cash account opened by a retail customer
- BA margin account opened for day trading
- CAn account managed by a guardian appointed by the court for an incapacitated adult✓ Correct answer
- DA joint account opened by two business partners
Explanation
Why C — An account managed by a guardian appointed by the court for an incapacitated adult
A fiduciary account is one in which a person or institution has the legal authority to manage assets on behalf of another party. Examples include accounts managed by guardians for incapacitated adults, custodians for minors (UGMA/UTMA), trustees for trust beneficiaries, and executors for estate beneficiaries. The fiduciary has a legal duty to act in the best interest of the beneficiary.
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