SIE practice questionhardBest Interest Standard
A registered representative makes a recommendation primarily to generate commissions regardless of client benefit. This violates which standard?
- AHypothecation
- BBest interest✓ Correct answer
- CGood delivery
- DRehypothecation
Explanation
Why B — Best interest
Best interest means recommendations must benefit clients, not just produce commissions. Other answers relate to margin or securities delivery.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Customer Accounts & Suitability questions
- A registered representative who recommends a product solely because it pays the highest commission is violating:
- An investment adviser owes fiduciary duty to their client. What does this require?
- According to the SEC's Regulation Best Interest, a registered rep must:
- A trustee for a pension plan invests in speculative stocks hoping to boost returns. The plan later suffers large…
- If a registered rep makes recommendations involving securities for which the firm is a market maker, what must be…
- A registered investment adviser managing client portfolios has which of the following primary obligations?
- Which of the following is required BEFORE a registered representative can exercise discretion over a customer's account?
- A registered rep recommends an investment that pays a higher commission but is less suitable for the client. Which…