SIE practice questionmediumFiduciary Duty
A registered investment adviser makes a series of trades to generate commissions without regard for the client’s objectives. This is:
- AA breach of fiduciary duty and is prohibited✓ Correct answer
- BRequired for active accounts
- CPermissible if disclosed
- DA margin call violation
Explanation
Why A — A breach of fiduciary duty and is prohibited
Fiduciary duty requires acting in the client’s best interest. Trading solely for commissions (churning) breaches this obligation and is never allowed.
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