CFP Fundamentals Flashcards
When must a RIA register with the state?
If the RIA has AUM <$100M
When must a RIA register with the SEC?
If the RIA has AUM >$110M
Can you use the letters RIA after your name?
No, SEC does not permit. Only may use the words “Registered Investment Advisor”
Investment advisor is defined for purposes of the Investment Advisors Act of 1940 as some who is: (1) (2) (3)
(1) in the business
(2) of providing advice about securities
(3) for compensation
ABC
Advice
Business
Compensation
For an advisor to register with the SEC they must file form
ADV
For an advisor to withdraw registration with the SEC an advisor must file form
ADV-W
TABLEs are incidental, and are EXCEPTIONS from registering with the SEC? Define TABLE
Teachers
Accountants
Brokers
Lawyers
Engineers
VIPs are SaFE from EXEMPTIONS from registering with the SEC. What does this stand for?
Venture capital
Insurance companies
Private funds < $150M
homeState
a
Foreign advisors
Exchange (not on national exchange)
Who are the five gatekeepers that perform critical roles for advisors and the private funds they manage?
Auditors
Prime Brokers
Custodians
Administrators
Marketers
What is considered a mid-sized advisor?
$25M-$100M AUM
What is the Brochure Rule?
Requires written disclosures to every client:
-advisory services provided and fees
-type of securities that are part of investments
-education background of advisor
-participation/interest in securities transactions
-summary of material changes must be provided annually
How does a person register with FINRA?
Form U-4
What does FINRA stand for?
Financial Industry Regulatory Authority
Series 6 authorizes
Mutual Funds, UITs, variable life insurance and variable annuities
Series 7 authorizes
A person may sell everything except commodities and futures
Dodd-Frank Wall Street Reform and Consumer Protection Act summary
-Lenders must verify income, credit history
-Lenders prohibited from refinancing unless the new mortgage provides a benefit to the borrower
-Homeowners unable to pay may qualify for $50k assistance
-Banks must retain at least 5% of risk loan exposure on their books
-FDIC $250k
-Definition of an accredited investor
What is the definition of an Accredited Investor?
$1M of net worth exclusive of personal residence
OR
-Make a minimum of $200,000 (single)
OR
-Make a minimum of $300,000 joint
TIP: Remember 1 , 2, 3
What is Reflective Listening?
Repeating the perceived message back to the speaker to get their confirmation of the message, feelings, and next steps
What is Motivational Interviewing?
Developed to support changes in behavior. Avoids giving advice but instead conveys empathy and acceptance while guiding the client to discover their own motivations to change.
-Partnership
-Evocation
-Accepance
-Compassion
What does a Visual learner like?
Pictures, Charts, Graphs
What does an Auditory learner like?
Explanations, repeating key information
What does a Kinesthetic learner like?
Hands on activities, offer online and technology driven exercises
Pre-Contemplation Phase
No intent to change
Contemplation Phase
Aware that change is needed, considering change, not ready to take action
