Business Practices Flashcards
NAS AAA requires that advisory contract with customers must have what?
Be in writing
have a fixed life detail the advisory fee to be paid
detail of the refund of any prepaid advisory fee to be made if the contract is terminated early
and provide that no assignment can be made unless the customer approves
NASAA requires that advisory contracts with customers be in writing or verbal?
Correct answer is in writing
Can an investment advisor be compensated on the basis of capital gains or capital appreciation?
No
Canon investment advisor be compensated based on the total value of assets being managed?
Yes
When can an agent, a broker-dealer, and investment advisor Rep., or an investment advisor borrow money from a customer personally?
An agent of a broker dealer has a customer that is a relative NASAA does not allow the agent to borrow from the relative who is a customer.
The same rule goes for an investment advisor Rep., a broker-dealer, and an investment advisor
The only time lending from a customer is allowed is if the customer is in the business of lending money such as a bank or Savings and Loan institution
Is an agent or investment advisor Rep. allowed to open a joint account with a customer to share in the gains and losses?
An agent is allowed to open a joint account with a customer to share in gains and losses as long as the sharing is proportionate to capital contributed and manager approval is obtained
Investment advisor representatives are not allowed to open joint accounts with customers
When must a broker-dealer disclose commission?
Only on confirmation
What does AML program stand for
Anti-money laundering
Who do you file a suspicious activities report with? When would you file a suspicious activities report?
It is filed with FinCen
Any suspicious activities inclined accounts involving more than $5000 the report must be filed within 30 days the client cannot be told the report is being filed
When must a currency transaction report to be filed with FinCen?
Any cash deposits or withdrawals of the loans over $10,000. report must be filed within 15 days
